The Podcast for Agency Leaders

Join Kelly Campbell twice a month as she goes deep into what it means to lead a creative agency, with interviews discussing leadership, culture, mindset, and more.


EP 37: Applied Empathy for Agencies, Michael Ventura


On this episode of THRIVE—sponsored by Workamajig—Kelly talks with Michael Ventura of Sub Rosa about his new book, Applied Empathy, and its extension of Q&E Cards to foster deeper conversation. They discuss how an empathetic approach to problem-solving creates the most effective outcomes for clients, as well as how his agency’s culture is rooted in understanding human behavior at every level. 




EP 37: Applied Empathy for Agencies, with Michael Ventura

Duration: 00:22:00



Kelly: Welcome to another year of Thrive, your agency resource. So to kick things off for 2019, we've got a great discussion for you today, all about applied empathy for agencies and my guest is Michael Ventura, CEO and Founder of Sub Rosa, probably one of the most sought-after strategy and design firms in the country and Michael who's actually recently authored his first book called Applied Empathy, and so that’s what we're gonna dive into today. Welcome Michael. I'm really, really grateful to have you.


Michael: Yeah, happy to be here.


Kelly: So, let's dive into this a little bit. I really like that you start out with a book saying, "Let's be transparent about this. People think of empathy as this squishy word." And it's the perfect word for exactly what people have the stigma around empathy for. So just to kind of set some context, what is empathy really in terms of life and business?


Michael: Yeah, it's a great question to start with because I think empathy is often very misconstrued. Some people hear it and it triggers, "sympathy," or "compassion," or "being nice to people." And what I often tell people is that those are all side effects of empathy, but they aren't empathy unto itself. And really what empathy is for me is a self-aware perspective taking of someone else in order to gain richer and deeper understanding.

And I say self-aware because we have to have some awareness for our own biases and our own ways of thinking and being and doing. Otherwise when we go try to take perspective of someone else we’re clouding it with some of our own baggage. So it does require a little bit of some interior evaluation in order to be a good empath because you have to know, "no, that's just me talking." As opposed to, "I'm aware that's me talking. I'm stepping outside of that and now I can really see it from your vantage."


Kelly: Yeah and that's probably the hardest thing for human beings to do, is to have that self-awareness.


Michael: Absolutely, yeah, and it's not something that is like you get it and then it's good forever. It's something, it's practiced, and I often say it's like a like a muscle you train. The more you work it out, the more you use empathy, the more depth you get with it, but if you don't use empathy often, it starts to atrophy just like anything else.


Kelly: Right. So let's talk a little bit about the applied empathy origin story. How did you really come to develop these like empathetic archetypes and the whole self within the whole applied empathy methodology for your agency?


Michael: Yeah, so I've been running Sub Rosa or a version of under different banner for fifteen years. So this has been a long process in the making. About six years ago, our team came together and we said, is there really any special sauce? Like are we just a good shop who can do good work or is there something actually under the hood that makes us different, or that makes us differentiated, or unique, or what have you? And so, we made a commitment to become our own best client and so we actually built a project team around this and we said let's go investigate this like we would any other problem for a client, and let's see if there's something really there.

And what we came to find as we start to look at the work that we flagged as some of our best projects as well as some of the work that we flagged that some of our less successful work. We said well what was happening in the in the successful stuff and what wasn't happening in the unsuccessful stuff? And as we started to look at that, we realized, it was when empathy was being employed, when we were really making an effort to understand whoever it was we were solving the problem for. The work was great and when we got a little on our high horse and we're like we invest and that's a tendency of every design.


Kelly: Absolutely.


Michael: Yeah. Like they don't know anything. We have the answer. That work never did as well and so we came around to this idea of empathy and we asked ourselves well what about that is meaningful or helping us and what we realized was it isn't just empathy unto itself because empathy unto itself is inherently passive. I could have a lot of empathy for you. I can understand you deeply but do nothing different with the way I engage with you or the way we work together. And so, what’s the point? So it was in the application of empathy that things really started to switch on.

So we created a talk, like a 45 minute talk and I went out and started giving it in different industry events and I got invited to go down to Princeton University and give it there and came off the stage, and the Dean of the engineering school was there and she said, "I think that this is exactly what we've been looking for, for our entrepreneurship, computer science, mechanical engineering track and that we think empathy would be a really valuable skill to teach in that program. Would you create a twelve week curriculum and teach it down here?"

And so, we said yes, because we didn't know any better, and we didn't know what it entailed. And we started to teach a class and in doing that, because you've got twelve weeks and because you've got IV league undergrads who are going to kick the tires on everything you say, we had to start really thinking about methodologically, what are some of the things we could develop that but you sink your teeth into it a little bit more? Because if it stays up at ten-thousand feet, it's hard to really embody it. So we created first these seven archetypes, and the archetypes were designed to help people realize that there are a lot of ways of the listening, understanding. There's not just like this you hear empathy, and say oh, be more empathic.

Okay. Well if you don't understand empathy, how are you going to do that? So we gave them these different archetypes to play with. So an example is they're all have sort of different names. So one is the convener. A convener’s behavior, the way they get understanding, the way they get information is by creating the circumstances that people will convene around in order to share so they know how to set the room, how to set the tone, how to host, how to be a good facilitator, how to kind of create all the soft science around interaction so that people can drop in and feel comfortable and be willing to talk to you in a way that maybe they otherwise wouldn't.


Kelly: So just open up.


Michael: Exactly. Like a good convener knows how to do that, and that's the way they get at empathy. A confidante is a great listener. And inquirer is a great question asker. There's all these, we have seven of them. And what we tell people is you are all seven in in-equally distributed ways so it's not like a Myers Briggs where you're any ENFP and I’m something else. We are actually all all seven but we have to learn our strengths and weaknesses and when we start to do that and I learned, I'm really good at these two but I'm actually pretty shitty at these two, then I can focus on my strengths but also improving my weaknesses a bit.


Kelly: Sure. So one of the things that I thought about when I was reading through all of that was I'm curious, like so you take your own agency on as a client. You develop this whole system. How influential do you think your own work in mindfulness and self-development and just inner self work, how influential do you think that that was in creating this whole methodology?


Michael: It played a role for sure. I mean since my twenties been very wrapped up in self-work and I went on the buffet line and tried literally everything you could. And, like any good buffet you go back for seconds for the things you like. And so there were certain things that I tried and I was like, "Cool, get it, not my thing," and then there were others that were more meaningful for me. And so, as we sat down to build applied empathy, a lot of that ancestral wisdom came into that process, and I am pretty candid about it when people say like oh it's amazing you guys created this whole thing, and I would say, we didn’t actually create anything. We just kind of re packaged a lot of stuff that is already in the world into a format that is now in a systems-thinking, design-thinking mode.


Kelly: Just kind of like took Sub Rosa and did what you did for other clients and just basically repackaged it in a way that people could understand and could really digest. And that's right meaningful so it makes sense.


Michael: Yeah, I mean like a quick example of that is so the other thing you asked about a moment ago was the whole self and so yeah we have seven aspects of the self. Those are based on in Chinese medicine there are three dantians or places that we store our life force and we sort of work with energy. And so, we looked at those. We looked at chakras. We looked at how Kant talked about the self and how Jung talked about the self and we looked at all of that sort of stuff and we said okay there's nuggets in all of this that makes sense. But we talk about it like I just did in the past thirty seconds. It's gonna scare a lot of people off because it is gonna sound woowoo and it's gonna sound new age, or it's gonna sound too academic, and we didn't need more of that. What we needed was practicality and so we kind took what worked for that and we re-applied it in a way that would make a strategy and design practice find its utility.


Kelly: Right and I think that's probably why I personally resonated with the books like beyond anything you can imagine because that has sort of been my path as well, kind of exploring eastern medicine and then getting into mindfulness, so I understood that but what you said is really important, because if people don't resonate with that, if that's not been in their journey or their history, they're not gonna get it, so taking the spin on it, and I just thought it was really, really brilliant. And one of the things that came out of that was this whole deck of Q&E cards. Can you talk a little bit about that and maybe share one of your favorite applications or stories about how that was implemented?


Michael: Yeah, for sure. So Q&E, Questions and Empathy, is a deck of 49 cards that we developed, and the initial thinking for it was how do we create a gateway drug for empathy?


Kelly: Right. That’s my sound bite.


Michael: How do we create this thing that will let people trial it and feel safe playing with it. And so, 49 questions in the deck. There are seven archetypes and there are seven aspects of the whole self. Seven times seven is forty nine. So what you get is for each archetype, let's say the convener, there's a convener question that corresponds to the physical self. There's a convener question that corresponds to the mindful self and so on and so forth. And so, what we wanted to do was create a way to kind of poke at all of those different overlaps between the interior empathy and the exterior empathy and give someone an opportunity to really play in that space.

So the cards are a permission granting tool in many ways. If someone walks up to you at a bar and sits down next to you and looks at you and says tell me about one time you failed. You’re like "Who's this creep, and like why we are going so deep so fast?" But if the card asks the questions, there's a third party at play. It's like okay like if you're not being creepy, the card is just probing deeper than I would ordinarily let social graces allow for it. So let us go and do it. And so, we've used the cards in a couple contexts.

I will tell you two quick anecdotes. One is I got this one, this is like the warm and fuzzy one. So I get a note from a friend of mine who lives in San Francisco, had been dating a woman for a while. They were driving down LA, down highway one. They were on like a long road trip for the weekend and they took the deck of cards with them.

 And I get a text message with a photo of both of them and she's got mascara running down her face and his eyes are like bright red puffy and they're pulled off in like Big Sur, somewhere on highway one. And he's like we just like level jumped our relationship in the past three hours riding the car with these cards, because these are kinds of questions that social graces often don't let us ask or they don't feel always appropriate to poke and prod into. Even with someone you're close with like a significant other. And just like that, that made me feel like there was some alchemy at work in these cards that was doing a good thing.

Another example that is in a different context is that actually next week I'll be going to run a workshop in Downtown Manhattan here with the 9/11 memorial. All of the staff who had been working there since it opened, because one of the things that their team has learned and they reached out after having read the book was they said, "we have a bit of a like sort of empathy challenge here because there's so much emotion that runs through this place every day that we have some people who are like burned out on empathy. We have others that have as a counterpoint to empathy built such a suit of armor that they're not prospective-taking at all anymore because it was too much for them. And there are people who kind of calibrated the right way.

So we'd like to run an hour long session with you in the cards to help people remember that there's multiple ways of being empathic, and that if this is uncomfortable for you, you can try it this way and if you want to play with empathy in a different context, here's a way to do it. And also a way to bring them all together in one moment where they can share some of the things they've been going through over the past few years running the memorial. So I'm excited to see how like it plays out like Big Sur's Highway 1 as much as in a context like this as much as in a board room with other execs and it kind of resonates in the right way.


Kelly: Right. And I think one of the, to add sort of like a third anecdote from the book, one day you get, you see on your caller ID the U. S. government, and it's a captain from West Point which is not that far from where I am in Rockland and he wants you to train the army coaches and the cadets. I'm curious to know what do you think like recalling that experience, what do you think was your "aha" moment between seeing that answering that phone and kind of getting that challenge coin from General Jeb. What was that moment for you where you're like oh my God, this is this is amazing.


Michael: Yeah, I mean it was amazing from the first phone call to be honest because I never imagined the military wanting more empathy.


Kelly: Yeah. I was blown away when I read that. I was like what?


Michael: Yeah, it seems super incongruent, but then I get there, and I'm walking around the base and the thing that was the most abundantly clear the fastest to me was that these cadets and the administration there are genuinely wired as lifelong learners, and they want to scale up in everything. They want to be really as capable in as many ways as possible, more so than, way more so frankly than the interactions we had at Princeton. And no knock against them, but those students were in in their path, in their track, very vertical, at the sacrifice of some widths, some real horizontal exploration. They knew what they wanted to be and they dove deep into it.

And at West Point, they're a leadership development academy when you really think about it, they're breeding leaders. And so width is critical and just as critical as depth and so I got to sit down with the coaches. The coaches actually were first because of just timing and scheduling so I had something like fifty or sixty of the coaching staff across all the sports sitting in a room and these are athletic coaches at the army. You have an archetype and many of them are ex-military themselves. And, I know what I look like. I mean I look like my hair is tied back today but it's even worse usually and I'm walking around campus and I look like who let the hippie on campus.


Kelly: Check him for drugs.


Michael: Yeah, exactly. My ID does get checked quite a bit there.


Kelly: That’s awesome.


Michael: And so I get up there and I do our initial presentation and then I said does anyone have any question. 15 hands raised like simultaneously and everyone was leaning in and asking questions. How do I use this, this way and could I think about it this way and then we disseminate the cards. And they start having their conversations and they start using them with each other and people are laughing, people are giving each other high fives, people are trading cards with each other. "Oh ask yourself at this one, this is a good one."

And I saw in that ninety-minute session with those coaches how learning, and how self-discovery, and how inquiry is such a core part of the DNA of West Point that as I went on and then met students or cadets, other members of the faculty, I actually also got to train fifty career military officers so three star, two star, one star generals and sit in a room with them. It was the same across everybody like curious, hungry, and desirous of learning, believe empathy is a critical leadership skill and wanted more of it. It was amazing.


Kelly: Such a cool story. So as we start to wrap up a little here, I'd love to leave our fellow agency leaders with a little bit of information on one of the ongoing rituals that you have implemented at Sub Rosa, Sub Rosa Days. And just kind of talk about how important those twelve days per year are to the success of your agency.


Michael: Yeah sure, so we had this obvious epiphany I guess, if that's kind of oxymoronic but if we said we only have finite amount of time in the year, and we spend all of it, spending our time on our clients, couldn't we take a day a month for ourselves? Couldn’t we take one day a month to turn the lens inward and look at us? And if we can't spend twelve days a year working on our own business, we're really selling ourselves short. So we decided to create Sub Rosa Days which are sort of like mini onsites if you will. There are some things that still have to happen, because we're in service business, and sometimes someone needs to take a call with a client, totally fine, but what we structured into that day are a couple things.

One is always going to be a workshop where someone from the team will run a workshop in something. It doesn't have to be one-to-one relevant to our daily work that we do for our clients. We've had people do everything from an improv workshop, a whole host of stuff, just kind of flexing your muscles, learning a different skill, playing in a way you haven't played before. We’ll always have one presentation. So someone typically someone who's maybe not getting up in front of clients as much gets an opportunity to really get up and give a thirty or forty-five minute keynote on something they're passionate about and share with the team in a way that A it builds them up a little bit as a presenter, but also B, to really kind of celebrate something they love.

We tend to have a couple breakout sessions to focus on our internal efforts. So for example, that might be updating case studies for our website, or credentials decks, or having an opportunity to onboard new hires who maybe haven't had a chance to go deep with some of the leadership team since they’ve started, so they get to like sit in a room with us for an hour and ask questions that they want to know. We also have a thing we call Fresh Eyes, which is we take everyone who's been here for less than six months and use that as an opportunity to ask them, "What are you seeing with your fresh eyes here that we are probably blind to at this point because we've been here for too long?" Because if you’re here more than six months, you lose that perspective.


Kelly: Very true.


Michael: So that ritual is something we run every month and it's something that people look forward to, but it's also something I really look forward to as an opportunity to learn more about our business.


Kelly: And I think that's really the reason why I wanted to wrap with that question, because I think that is probably a really large gap in most agencies, and most agency leaders they aspire to have things like that, but their own work just gets pushed to the back burner, but you're saying the takeaway here is don't push it to the back burner. It's only a day per month and again try to get a hundred-percent participation but if it's ninety-five or ninety, it's fine. The point is that you're keeping that continuity and you're bringing in fresh perspectives and all of that. So I love that and I hope that some of the agency leaders that are listening and watching today really, really take that to heart.


Michael: Thanks.


Kelly: Yeah, so thank you so much Michael. I really, really appreciate it. This has been awesome, and I can't wait to talk again soon.


Michael: Same here. Thank you very much.














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EP 36: Relaunching Your Agency Website, Christina Hagopian

On this episode of THRIVE—sponsored by Workamajig—Kelly is joined by Christina Hagopian, President and Creative Director of Hagopian Ink in a candid discussion about her experience in overhauling her own agency’s website. They talk about making yourself a client, her lessons and takeaways from the process, and advice for other agency leaders planning to redesign their site in 2019.   TRANSCRIPT ...

Kelly: So welcome to the very last episode of Thrive for 2018. I have no idea how quickly this year went by but it has, and today I'm super excited to have one of my really, really good friends Christina Hagopian on the show. Christina is president and creative director of Hagopian Ink, which is a luxury and lifestyle design firm specializing in branding, e-commerce websites and email marketing. So today we're actually gonna talk about something really interesting which was her recent experience in overhauling her own agency's website. So thank you so much for coming on the show today. I'm so excited to chat with you, and I'm ready to dive in.


Christina: Thanks for having me, Kelly. It's always good to talk.


Kelly: So I guess we should start from the beginning. Which is agency owners have this thought in their mind that they should be looking at their website every couple of years, but it's always that thing that kind of gets pushed to the back burner. So what was, I guess the impetus or what drove the decision for you to actually take Hagopian Ink and sort of look at it as a client and relaunch the entire thing from the ground up?


Christina: Well, our old site was approaching that five year mark and in the world of design and web design, that's an eternity. There's so much that changes in that amount of time and it was starting to feel like we were building much more complex and more beautiful websites for our clients than what we were representing ourselves. It's like that old adage, the cobbler's son with no shoes. It was becoming a pain point, and it was starting to feel that it was time, and I wanted to attract the right clients too, and I felt it was hindering that.


Kelly: And was there something with the previous website that wasn't, like you said, attracting ideal clients but was it really bringing in much business?


Christina: Well, our site has always been a validation of who we are. Most of our work really comes through referrals and people that know of us or been introduced to us. That's certainly something we're trying to change and get found a lot easier, but that was something that was even a hindrance even in the introductions from a mobile design standpoint. It was that first generation mobile and it was starting to feel first generation.


Kelly: Got it. So the other thing that I think is interesting about your story with this overhaul is that you are such an incredibly talented designer but you actually decided to hire a designer and just take the role of creative director for this particular project. Why did you feel that that was important for actually seeing it through to fruition?


Christina: Well, thank you for that compliment. I appreciate that. But honestly the business started with me as the designer, the lead designer, but I've been in the role of creative director for a very long time, and it was one of those things where I might be the lead visionary, but it's not good for me to be in the weeds or in the details, especially I was just too close to this. It was never going to get done if I was the designer. I would have second guessed myself through every step of the way and I really felt it was important to get a fresh perspective. I was a little too close to the process the last time, and I needed to let go a little bit and get a fresh viewpoint.


Kelly: That's really interesting, and I'm glad you use the word let go because I think that a lot of agency owners, even if they are coming from a creative background or not themselves, they do sort of get mired in the details and they feel like they have to have control over every little aspect, and I think the point that you're making is bringing that fresh perspective and collaborating with another designer or a couple of other designers, really just change the entire trajectory of the project and the outcome and the result.


Christina: It's so true, and we're about to launch a new Instagram feed, and I had another designer come on board for that, and I have to say I don't want to make more changes and we have such, it's just going to be this evolution where, where is the brand leading and how can we tell our story in a new fresh way, and it's actually very exciting to have somebody else come in and show you a whole new perspective and make it more fresh than what you envision yourself.


Kelly: Right. Right.


Christina: Two to three heads are always better than one. That old adage.


Kelly: Absolutely.


Christina: Like I have to get out of my just own viewpoint.


Kelly: Right. Right. So I have to imagine that there were probably a couple of challenges along the way. Whenever you undertake a project especially one that's completely relaunching from scratch all the way down from design to copy to functionality across the whole board, there had to be a couple of challenges. So I guess the question is can you share what some of those challenges were and I guess, talk a little bit about your experience in actually having the courage to take on Hagopian Ink as a client.


Christina: Well, I realized really quickly that it was not going to get done unless I made this a major priority and made myself a client. So one of the most important things we did was to not take on any new clients for the month of July and August which is normally a slow time for the year. People are on vacations, the city clears out. I'm not going to as many meetings. I'm traveling. So delegating these tasks and making it a project plan and actually blocking it out completely and allowing for that breathing space was essential. But the biggest challenge was culling sixteen years of work and editing and making a story that is fresh for 2018, now 19.

And the remarkable task of, we don't have one server that has all of our projects. I have multiple backup drives and it was like musical back up drives. And now my task for 2019 is to make one cloud where every single project we've ever done is on, because it was a nightmare going through the projects itself. Now also getting those original source files to make sure they were really beautiful and new flow in telling the story of each project in a very fresh way. So taking something old and refreshing it. And also editing down those case studies, what doesn't serve us anymore. I had emotional connections to some of these projects or clients, and yet they might not be the work that we want to do moving forward. So it was that painful moment where it's like we have to take that off. We have to edit that. We have to curate our work. And show our best face.


Kelly: Right. Right. I love some of the things that you just said especially being able to recognize that you had this emotional connection to some of the work because maybe back then if it was twelve, thirteen years ago, you were the designer, and so you were really mired in those details, and so it was very close to you and letting go of that emotional connection is so important. And I think that's really hard for a lot of agency owners.


Christina: It really was. It really was the biggest challenge.


Kelly: Yeah. So talk a little bit about the process. How long did it take and what do you think if you would have done anything differently, what would you have done differently?


Christina: Well, we started the mood board process in the middle of May and that was to just figure out the color, the type pallet, the key design elements, things that we do all the time, getting the right look and feel and getting that excitement level like, ooh, this is new, let's get excited to do something. And wanting it almost to take down the old site immediately once you have the fresh face. And then June, July, was when we started to build the main templates and August was when we handed over everything for development, and we launched the end of September. So it was about five months total, but the real heavy lifting was like I said that case study development and really writing and rewriting the copy, getting the right copy development and the right voice. If I were to go back, it would be to organize those key studies throughout those sixteen years in a much different way.

And I also feel like I think we did a lot of things well, recognizing that once we made ourselves a client, we did the exact same process. So talking to our clients, finding out why they selected us versus others, looking at our competitors, how are we going to differentiate. We didn't want to look like every other design firm. I don't want to just be Helvetica and like super minimal. We are a brand ourselves and we have a voice ourselves and people come to us for a distinctive point of view in the luxury and lifestyle market. So we wanted to be sure we were communicating that.

But there were some things like making sure usability. I remember you mentioning, when you saw the preview like I really wanted that hamburger menu because it looked cool, and your feedback was that's not helping your clients get to what they need to quicker, especially on a desktop. Thinking about every usability aspect from beginning to end. And also from a development standpoint making sure that we were building on a platform that was going to be really easy to edit and add to and making sure that that those systems were in place and the forms of the CSS were in place so we can be nimble and edit and keep adding content, which we’re very excited about.


Kelly: Right. So I just want to touch on two things that you said. So the conversation that we had about usability which was really interesting because at the beginning when I started Thrive, I had Matt Kelly on the show and we talked about the fact that so many agencies choose I think by default this hamburger menu specifically on desktop and we talked about the usability issues of that and that actually the conversation with you is what reminded me of that episode with Matt. And it actually inspired a blog post which was about dropping the hamburger menu and your pipeline will thank you.

On desktop, if prospects have to click three or four times versus though one time that they can hover over a primary navigation tab and then just click on whatever that they're looking for, that's a lot of time that you're saving them and just from a user experience perspective I think that's really important. And I think you've done such a great job with the usability of the site. I mean everyone if you're watching this and later on you want to take a look at the site. It’s It's stunning, it’s beautiful, but it's also really functional so I think that there's so many things that you did really, really well with the site.

And it's very different from most agencies because most agencies are that minimalist look and feel, and I feel like that has become sort of the norm, unfortunately. And so, it is really refreshing to see that you took the brand seriously. So yeah just wanted to touch on those couple of things.


Christina: Thank you. Thank you for that. I mean, I remember having a moment of silence for a hamburger.


Kelly: You poured one out for your homie.


Christina: Because it actually it looked a lot more beautiful, but we have to make decisions on the usability that aren't about beauty, and design has to function, and design has to lead to action. So those are really important things that we do for our clients. We have to do it for ourselves too.


Kelly: And I would argue that usability is just as beautiful as minimalism.


Christina: It’s very true.


Kelly: So as we’re starting to wrap up a little bit, the other agency leaders that are out there and they already have in their marketing plan for 2019 or sometime in the year, they're thinking about overhauling their own site because they're at the same point that you were earlier last year or earlier this year. What were the two biggest lessons or takeaways that you would share as advice for people who are actually going to go through this process?


Christina: Really thinking strategically for your intended audience, what's going to differentiate you when someone Googles and finds ours, looking at two or three different type of agencies that do the exact same thing? How are you speaking to them? How are you guiding them? What work are you showing, that's going to attract them? Really articulating that very, very clearly and putting a stake in the ground for your point of view and not being afraid of editing and that curation process. We almost over edited. Now we have to put a  little bit back in but I'd rather do that than the other way around, really making yourself a client- number one priority and carving out the importance of it and having a project timeline that you can implement and just getting the right team in place, people that my team was incredible to this.


Kelly: So though the last question I would have, it's pretty specific, I know that you took Hagopian Ink on as a client, but did you also go to the point where you decided, I'm only going to use external resources and I'm going to actually create, you said timeline, but did you also create a budget allocation for it as well?


Christina: I did. I did. I mean, all of my teams are always assembled. It's more of going back to the right players and bringing them together for this one, but having a designated production that was just cutting all of the project images, gathering them, the writing, that was like a whole other key piece. So making sure that each of those team members, I was the project manager so I had to make this a super strong commitment and that's usually where it falls. The agency owner is saying this is something that's going to get done and it has to get done by an x amount of time and I had a certain date and I'm not going to go in to Q4 without this.


Kelly: Okay.


Christina: Super important.


Kelly: Yeah, awesome. Well thank you so much for being here. Now everyone has to go check out, and feel free to send Christina your feedback, your comments, or any additional questions that you have if you are thinking about going through this process or you already have that in your marketing plan for 2019. Her email is c@, and Christina thank you so much and it's always awesome to talk to you, and I'm sure we'll see each other soon.


Christina: Thanks Kelly.

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EP 35: Alternative Agency Partnership Models, Patrick Smith


On this episode of THRIVE—sponsored by Workamajig—Kelly explores unique and alternative partnership models for agencies with Patrick Smith of C2 Creative Group in Chicago. Patrick shares his story and experience in creating partnerships that add value without adding overhead in order to produce the best work and results for clients. 



EP 35: Alternative Agency Partnership Models, with Patrick Smith

Duration: 00:22:25


Kelly: Welcome back to Thrive. Today, we're talking about unique and alternative partnership models, and my guest and creative agency owner is Patrick Smith, founder and creative director of C2 Creative Studio in Chicago. Patrick, it's really great for you to be here and I'm excited to dive into this conversation today.


Patrick: Yeah. Thanks for having me Kelly. It's great to be here.


Kelly: So you actually wrote into me a little while ago probably going back a couple of months, right? And we had a chance to talk a little bit about your creative agency and what I would imagine that most agency owners grapple with on a pretty consistent basis, "Do I enter into a partnership, do I acquire another company? What's my growth model? how does that all work? What is the sort of the impact of joining different cultures if I did partner or merge with another company?" So all this stuff kind of comes up.


Patrick: Sure.


Kelly: And I'm sure your story is really unique, and I thought it would be kind of a great story to impart on other agency owners who are listening and watching. So do you want to just give us a little bit of foundation and talk about C2 Creative consulting and just a little bit back story on that?


Patrick: Sure. The background for me professionally is I started probably the first 15, 13 years or so of my career, at a traditional agency side, so bigger agencies in Chicago or in the Midwest, and if you think of a classic brand marketing team, whether it be copywriters and designers and developers and account people and strategists planners and on and on, that was kind of the environment. And it was great. At one point, I decided I wanted to do my own thing and without knowing really what I was getting into.


Kelly: Oh, you’re just like all the rest of us?


Patrick: Exactly. I thought that should be really fun to do for myself. But in reality, I think at some agencies or just a place in life, you get to a point where you want to do it on your own, and so I was kind of hitting that spot. And in or around 2009, I had a business partner and a creative partner ,and we decided to start our own little shop, and he was a writer and I was a designer, and we had this kind of a 50-50 arrangement. But it was very organic. There wasn't a lot of grand planning around it. Just kind of went out, and started taking up some clients, picking up projects, now start to get a little bit of momentum. We definitely wanted to be, the vision was to be a boutique agency at that time because it was just the two of us. And we didn't know what we were doing necessarily.

And we love the idea of "small teams, big ideas," and I thought we're senior level talent without all the big idea, kind of come from that small teams was, it was really just the two of us. We’d pull in freelancers when we needed them or kind of development partners or things along those lines. So that was kind of the big thought. And what we specialized in, and still do is basically creative strategy, things like branded audits, positioning, customer journeys, brand narratives, brand design, like naming identity, your message platforms or brand materials. And then campaign development which would be brand ads, brand campaigns, websites, video, trade show experience, social, things along those lines.

So that's in a nutshell what we do and how we started. And then after a couple years, my business partner and creative partner at the time had some life changes, and he ended up leaving and moving out of state and got married, all that kind of stuff, so life took over for him, and we did over the course of the first two or three years, we started to build up some other partnerships along the way, and I didn't want to work by myself, and I still had this dream of growing this into a fifteen or so person shop. The idea there would they have a couple of different groups that could service clients, so we didn't have just like one team working on the same thing all the time and we had some different perspectives. So my goal is always going to get to somewhere between us 13 to 19, 20 person group just so we have different perspectives and are able to service clients with different groups and whatnot.

And so, along the way somewhere probably three or four years in, we started to work with some other groups so we were the creative side of things, and there was a development team that we started to work with, and we still work with today. And in the beginning of that, we started to just really kind of strategically align, and what I mean by that is we started the pitch together, we would start to integrate some of our systems and our operations a little bit; meaning things like Dropbox and Slack and things like that. And then move forward to another year or two, and there was a third a group that we started to integrate and we were starting to lay the foundation to have kind of a merger if you will at some point. We had three different organizations.

We each had 4, 5 employees each and I was getting really close to this kind of vision that I had when I originally set this out or set out for this and we started, we get to MSAs, signed, we were about to do business evaluations and things along those lines, brought in the consultants, brought in the accountants, brought in the lawyers, that kind of stuff, and we did do it for about two and half years or so. Ultimately it didn't play out but that was a really good learning. Some of things that I didn't want to continue doing but I still continue to work with that development group and we're pretty about as fully integrated as you can get but remaining two separate companies, but we're truly partners in that sense. So that's kind of the cliff notes if you will of the last nine years.


Kelly: Right. So just to go back to something, a couple things that you said there. So the merger actually did take place and basically went through with that and worked on in that capacity for two and a half years and then did that disband, did you break that off and then continue working together?


Patrick: We didn't go to the full merger. We all moved- if you think of it like any kind of relationship, we moved in together, so we got to the same office, we just didn't get married. So we had we had an umbrella company basically that served kind of our marketing space or the customer side face, but at the time we’re still three independently independent groups which was interesting and created some interesting dynamics along the way. And the plan was ultimately to do a merger. But we just never got to that point. So I think we learned a lot as we were going through this kind of engagement phase if you will, to use that metaphor a little bit more. It wasn't gonna work.


Kelly: Yeah. So you guys all kind of gave each other rings and then just kept pushing the marriage date off?


Patrick: Yeah.


Kelly: Realizing, we can still live together but it's not going to actually happen.


Patrick: Yeah. I like your version of it so we’ll stick with that.


Kelly: And again some of the agency owners who are listening or watching and maybe thinking about that, because maybe they have a strategic partner similar to the one that you're describing or multiple ones like the ones you're describing, and they have that idea in their head that maybe down the road maybe a merger or an acquisition or something might occur, what are some of the things that you would say you learned, like what are some of the takeaways or some of things that you would say, if I was giving advice to someone else who had this path in mind like what are the things to look out for?


Patrick: Yeah that's a great question. So I've got a couple of different like visions that I had all the different types of partnerships that I've encountered, this might just become a broad stroke but there's kind of that 50-50 set up that happens organically that you might have in the beginning when you have an idea with somebody just like I had with my first partner. And what I could take away from that was we were friends, we were former coworkers and continue to work together and so we never did anything formal in a deeper way and I think that the lesson that I got out of that was we never really, we tried to expand on or build off of our previous working relationship where we were within a larger organization that had rules and management and suddenly we didn't have that. And so, I think having some kind of framework for how you're going to work together when you're on your own would be tremendously helpful. We just didn't, we were very naive when we were doing this, so that's one.

And then there's this kind of this next kind of group of partnerships that usually don't happen but they can happen and it's the person who comes along sees that you've got your own business and says, hey why don’t you give me 20% of your business or 30% of your business and I'll come work for you, I’ll be your salesperson and that kind of person usually likes what you have going on.

They might be miserable in their job and they're just looking for a way out and they want you to give up something that you've been working very hard on, putting a lot of equity into, sweat equity and otherwise, and I just want you to sign over a big piece of the business to them without anything being proven yet in terms of what they can bring. And I've seen a couple people go through that and it usually doesn't end well. Usually it starts really well for about a month, and then it kind of falls apart just because everybody's got a very different set of expectations around what this person is gonna bring at the company. Even if they spell it out, it just very rarely works so that's kind of like a landmine that I think most people should avoid and most do.


Kelly: Just to add for to that for one second. For all of the agencies that I've worked with and spoken with over the years, I haven't seen a lot of external salespeople, hired either part time or full time really work out, and I think it's just because there's so many moving parts to understanding what an agency does, the value that they bring, how to really get new clients onboard. You just have to know so much, and it's really hard for salespeople especially if they have like a pretty aggressive sales style, it's hard for them to kind of know everything and really cater to the nuances of developing new business. And so what you're talking about is kind of like forget even the first date, you're saying like let's get married right away and give me a stake in this company that you've worked for 10, 15, 20 years to build. I could never see that working. That seems like a huge red flag to me.


Patrick: Yeah, well you'd be surprised at how many people actually approach us with that kind offer.


Kelly: Yeah that's crazy.


Patrick: Yeah. And the next one is probably pretty common, kind of the white label word; you're using a vendor, kind of has your own capability and in the very beginning we worked with a lot of business consultants that didn't have a creative capability necessarily and we were white labels for them. And the takeaway from that was, it was great for the first year or two. I think we learned a lot and I think we also learned that we're really spending a lot of time building other companies up and we're not building up our own. And the other piece to this is we weren’t doing best work for clients or for their clients because there's always this in between this goal between that just didn't seem to click.

Some white label arrangements work better than others, and something can be successful for short period of time and on occasion we've got some people that we worked with in the past that will do this very selectively every once in a while, but I think it's gone from a significant part of our business down to almost zero.

And then the last one is really that when I was mentioning before with the three companies kind of almost merging is that strategic partnership, a coop, and I think even though we were only 15 people or so or 14 people. It was amazing how much culture influenced how everything kind of eroded.

You think it would be something that would be really easy to pull people together but it was really complicated and quick as story was. Even something as simple as one of my employees talking to somebody else's employees in the heat of a moment next and something that sounded like accusatory and the person receiving it wasn't used to having those kinds of conversations in the course of the day and all of a sudden something that would seem relatively benign in most environments becomes a huge issue. And so I think the one thing that I look back that we didn't do a good enough job on was we spent enough time like on the social side of things, getting everybody in the same room and going to lunches together and things along those lines.


Kelly: The fun stuff.


Patrick: The fun stuff. But I don't think we ever really, none of us were big enough to have like HR departments. That piece was missing and I don't think we were able to see forward enough to say, "Hey here's a potential issues that might come up between teams or between different personalities, and how do we just get everybody on the same page of how to work together if there are those, we are in advertising, right? Marketing. There's going to be deadlines. There’s going to be a lot of pressure. There's gonna be angry clients. And sometimes that spills over onto what we're doing for better or for worse. It can become a test of environment at times." So looking back if I was gonna do that again, that would be in like probably one of the first things I’d want to address versus something that we thought we just take care of itself, those type of things don’t take care of themselves.


Kelly: Yeah. It's a great point and especially I mean you guys had been working together for a pretty significant amount of time up until that point. Then you think about well there are strategic partners or potential co-op type of relationships that haven't really been working together for a decent amount of time and if you were struggling with that could you imagine what that would be like from a culture clash standpoint if you didn't have that back story and just that longevity of working together. So yeah that's really interesting, and it is something, I think you're totally right. I think it's something that people don't, they just kind of think, "Oh well we're all in marketing, we’re all in advertising, we’re all in branding or whatever. We all are of 'the same mindset' and it'll just work out we're people, we'll just get on the same page."

But I think if more agencies that were moving into a partnership arrangement of any kind spend more time on the people aspect, I'm a big fan of saying, "Your people are your products." Clients come to you basically for your team's ability to solve their problems. So why not invest more in the people and make sure that the vernacular is the same, that your goals and values and all of those core things are really aligned across the board because otherwise it can fall apart. So I think that's really probably one of the most important takeaways from this conversation for me.


Patrick: Yeah, it really is. It's not the what so much, it's not what are you making. It's really about but who you’re working with and how do you work with them. Truly, you hear that in a meeting or on a movie or whatever in a book, you kind of think you understand it but until you really live it and co-author it the way companies do, it just takes on different meanings. So that was a big one for me.


Kelly: Yeah for sure and I also just wanted to touch back on something that you mentioned about white labeling. I'm also seeing that as a trend in terms of some type of strategic partnership. I'm seeing that as a trend in terms of the commoditized services maybe just like a straight up website build, something that can more feasibly be in the background. Those are the types of white label relationships that I see working pretty well especially if it's a web development team, I'm just using that as an example, if they don't really- they're just looking to produce the work and get it out the door, they're not really looking to build up their brand, that works really well but almost anything outside of that, it really is a little detrimental to the growth of the agency.

So I am definitely seeing that more and more. The agencies themselves who are a little bit more strategic thinking or are bringing in those creative services. You have to have access to the client. You have to be sort of who you are and not- I think the clients also realize that there is no such thing as a full service agency so you're going to bring in partners, and if you're more transparent with those relationships, the client appreciates that as well. How you bill or how you invoice, I mean I think that's an easy part, but it's again going back to the people who am I going to be working with and where are they from.

So yeah and just to touch on the way that you had the arrangement. Some people might be wondering, if you were sort of this umbrella company, but you had three separate entities, how did you work things like invoicing, did the client get three different invoices or one or how did that work?


Patrick: Yeah, we had a great finance person and a bookkeeper, and basically the way it would work is they got an invoice from the master in the umbrella company and if I have to do the financial gymnastics on my head ,and I went to school for art not finance. But basically what would happen is we would send an invoice, we would get paid and that would go into the umbrella company’s account. And then we would all individually invoice the umbrella company, and the umbrella company would pay us. So that's how it works. So it was two-step process, a little bit more paperwork on our end, but at that time we were like this is just what we need to get through to get to the next point so that's how it works.


Kelly: That seems like a really great solution though, one that most people might not have thought of because it keeps it clean, and it also keeps it really convenient for the end-clients. So yeah.


Patrick: Going back to your point about the white label and even the arrangements. Some clients don't want to, I've seen it both ways. To your point I think a lot of agencies are moving towards this and some clients really want to have this at a level of accountability better just dealing with one group and are not dealing with multiple moving parts and then there's other groups that I think it just depends on the client that really don't have as much. They don't put as much stock in and out.

So it can go both ways but I think the accountability part for some clients is a big deal, and it helps us with that umbrella company only having one name if you will, because what was happening, the reason we actually did this, it’s for a little bit more backstory, is we were pitching together and what was happening as we would do really well on the pitch and then I’d ask for a business card, it just created all these questions about, "Who's doing what? Who do I call?" and at that point I think we realized that we need to elevate this to another point and have this umbrella and because if we're going to move up the food chain, if you will in terms of the client opportunities, this coop if you will, just wasn't working. And in the eyes of our clients, it created a lot of questions for certain groups.


Kelly: I mean, but on the flip side of that, just to kind of play the devil's advocate for a second, if you had presented it like we are as C2 we are specialists in this and this is our partner that we're bringing in specifically to serve this portion of the project or the retainer and then here's our other partner. If that was sort of part of the conversation at the very beginning maybe by the time you got to handing out business cards there would have been an expectation set. I just wanna play both sides of that because I think it could work either way.


Patrick: You're definitely right, and we would do that. We would have those initial conversations but in the actual meeting once I got beyond maybe on our initial point of contact and two or three more people were involved or five more people involved, it started to unwind a little bit. So for some clients it wasn't a problem, but I think for other clients that are usually a little bit larger, if you are working with a healthcare company or something along those lines where their process everything and if they think that somebody's gonna disappear, because they’ve been burned before in the past by some of those arrangements so they're trying to avoid those kinds of scenarios.


Kelly: Right well like I said, I thought that this was going to be a really interesting conversation, and you definitely didn't disappoint. Lots of really great takeaways for agency leaders that are thinking about partnering in some way shape or form, and I'm sure I’m gonna get a ton of feedback on this particular episode. So thank you so much for joining me today. I really enjoyed it.


Patrick: Yeah, thanks for having me Kelly.






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EP 34: How to Disqualify Agency Prospects, Dave Fischer


On this episode of THRIVE—sponsored by Workamajig—Kelly talks with sales coach Dave Fischer about how and why agency leaders should disqualify prospects during their business development process. Dave shares great tips and insights as to how to navigate early discussions with potential clients for your agency. 



EP 34: How to Disqualify Agency Prospects, with Dave Fischer

Duration: 00:20:10


Kelly: So, welcome to another episode of Thrive. Today we are talking about how to disqualify agency prospects, which is a very, very interesting and important conversation. Coz a lot of times we focus on qualifying those prospects, but today, we are going to focus on disqualifying them. And today, I am joined by Dave Fischer, who owns a sales training group called Chartwell Seventeen. And they really use the Sandler training methodology at that advisory group. So, I was actually introduced to Dave a while ago from someone who I went through a non-profit consulting institute with, and we had a great conversation, and I thought it would be great for agency leaders to really understand how to disqualify prospects for their agencies. So, Dave, thanks so much for coming on the show. I am really excited to have a great conversation today.


Dave: Same here Kelly. Thanks for having me on.


Kelly: So, in the agency world, as you know, most leaders are what you might call accidental sales people. So, can you set the foundation for us today as to how that actually translates into this idea that we have to qualify, qualify, qualify and we sort of forget about disqualification.


Dave: Sure, absolutely. Many of the client's that I work with are exactly what you just touched on- the accidental salesperson. They need to generate new business. They need to generate clients. They don't view themselves as somebody in that role. If you mention the ugly word sales, it's something they don't want to be associated with. And with every good reason. And, I think what winds up happening is that people take on this mindset of, "Well, if I provide a lot of goodwill to people, if I provide them a lot of information, if I give them a lot of good reasons as to why they should consider enlisting my firm or my services, that should be an effective way to bring on business." And as we know, it doesn't always work.


Kelly: Right.


Dave: I think that's the first thing. I think the second thing is that sometimes they lose sight of the fact that essentially when you are looking to bring on a new client, it should be a mutual process. Meaning, is this person going to be a good fit for our agency. Sometimes people just look at it as, "We need to bring on clients." And as you know, if you bring on somebody that is not a good fit in the buying process, I don't think I've ever seen a situation where somebody that's really difficult in the buying process suddenly becomes an angel.


Kelly: Turns into a sweetheart.


Dave: Yeah. When they are paying you money. So, I think it is also important to have a little bit of a skeptical eye so to speak, a skeptical ear, to ask yourself, "Will this be the right fit for our agency should we decide to be forward with this person or to this opportunity?”


Kelly: Right. And is that what you are talking about when you talk about having a disqualifying mindset versus an opportunity-everywhere mindset?


Dave: Absolutely. I think when you have an opportunity everywhere mindset, the question you won't ask yourself is, "What could go wrong?" or "What would actually prevent this from being an ideal opportunity?"


Kelly: Yeah. It's funny a lot of the agency leaders that I work with who are primarily responsible for bringing in or closing new business, they get really excited at every new opportunity, which I appreciate. I've been in that boat before. But they really don't- many of the agency owners that I’ve worked with don't have that disqualifying mindset. They don't look for "What are the potential risks with this organization? Does it fit within our positioning? Is it a good match for where you are gonna take this organization long term?" They don't think about things like that. So, I mean, very similar to you. I kind of help them. But this is the main focus of what you do. So it really resonates with me. Let's talk about a little bit how we sort of transition that mindset into the benefits to the agency leaders. Creating fewer proposals, increasing their closing rate, things like that. Talk a little bit about that for me.


Dave: Sure. One thing I wanted to just touch on. You mentioned mindset. I think another thing to keep in mind which probably the hardest thing to do, is going into these opportunities emotionally detached from the outcome.


Kelly: Yeah, that’s a good point. Yup.


Dave: If you are emotionally attached, if there is a competitive side of you that kicks in, and a person says, "Kelly, tell me why I should hire your firm?" I think that right there for the emotionally involved person will lead to a whole listing of reasons. Whereas, the person who's thinking about this is a little bit more skeptically, may take a step back and say "Well, I'm not really sure at this point if you should." So just wanted to touch on that, that first piece. Emotional detachment I think is really key. It's going to allow you to really think through this notion of qualification much, much, more thoroughly.


Kelly: Yeah.


Dave: Now to touch on some of the things that, again, having this mindset of less proposals, absolutely. Higher close rate, definitely. I think another thing that you'll see in this process is less negotiating at the end.


Kelly: Yup.


Dave: One of the things that people in my experience don't really qualify or they don't have the discussion around are the financial and time investments required to make the solution work. It's not discussed until the end when the person is seeing the pricing for the first time.


Kelly: Right.


Dave: And that leads to a back and forth, let's negotiate. And again if I am emotionally invested and I want this to happen, well then, what I might start doing is conceding. And in that case, I am giving up profit margins. So, I think another thing you'll see is the ability to retain some more profit margin as a result of brining on the right client.


Kelly: Yeah. You are definitely speaking my love language. So let's talk a little bit about some red flags. I mean you mentioned before, I think that's a great example of somebody says, "Why should we choose your firm?" That's like a pretty loaded question. And it doesn't help the situation. It kind of shows you with the perspective client's true colors are, in a way. So this is maybe a bit of a general question. But, is there like a prospect filtering protocol or some red flag scenarios that you can sort of walk as through as to what those things might be for the business development people at agencies?


Dave: Three comes to mind immediately. I think the first one is if the person is unwilling to engage with you outside of email. So, like I see a lot of times someone will reach out to an agency, "We’re really interested. Why don't you send us over a couple of ideas?" And then they'll be this back and forth on email. And, what I always advise clients is get off email. Get the person on the phone. In a perfect world, get in front of them, face to face. And if the person is unwilling to get on the phone with you or meet with you, then that right there is a red flag.


Kelly: Yeah. And that's pretty low on the list I would imagine.


Dave: Yeah.


Kelly: I mean that's a pretty 101…


Dave: Yeah.


Kelly: Yeah.


Dave: So, I'd say the second thing would be if somebody is really pressing you. "Kelly, tell me the reasons why? Tell me why I should hire you? Tell me how you would fix this issue?" And if they are unwilling to engage in a dialogue where you are essentially taking a step back saying, "Well before I can actually start giving you some solutions, I first need to understand what's going on in your world". If the person is unwilling to have that discussion with you and answer questions, I'd say that's another red flag.


Kelly: Yup. Anything else?


Dave: And then I'd say, probably the biggest one would be if they're really leading the discussion right away with things about fees. Right? So off the bat. "Kelly, I was curious to know what you charge for x? I'd like to know your fees." And again, part of the training that we provide our clients is how do we tactfully deflect those questions, letting people know that, we will eventually answer them. However, for us to answer them, we need to have some more information. If the immediate response to that is, "Yeah, but just give me a price." Again, I would start to think of that as a bit of a red flag.


Kelly: Yeah, for sure. And I recently wrote a blog post on prospect filtering protocol which has a checklist and some red flags. So, I’ll put a note to that or link to that in the show notes as well. There was something that the last time we spoke, you talked a little bit about some things that might be overlooked in terms of a macro- versus a micro-view of disqualification. And, I think that the people who are listening and watching would really get a lot of value out of that. So, can you kind of, we’ll pivot a little bit and go into some of that.


Dave: Sure. So, if we look at macro, we can look at it from, there's really three things that have to basically align for if I am the person that is looking to bring on a client, for me to have good confidence, to say that at a time I deliver a solution that this person will provide me with a yes or no. And I think that's ultimately the goal, right? What you want to avoid is the person going into the prospective client’s version of the witness protection program or the perennial let me think it over.


Kelly: Right.


Dave: So, if we look at those things, we would say the first thing to really get a good understanding of this is, what are their personal compelling, and if you can get their ideal emotional reasons why somebody would want to make a change. Ultimately, what we are selling is change. People are in comfort zones. And, really there needs to be something personal, and compelling, and emotional to get them to make that change. And so, within that, we use a terminology in Sandler called pain, figuring out what is the pain that the client is looking to solve. And, that's the first thing. And if there really isn't any pain, if you are not hearing anything compelling, then I think it's incumbent upon you to start thinking that perhaps this might not be a good opportunity. We say, "No pain, no sale."


Kelly: Right.


Dave: So, from there, the second thing would be to have again, mutual alignment around investment. And by investment, I mean, "What are the things that the client is willing and able to invest in the solution?" We oftentimes quickly go to things like fees and budget. However, I think another thing that gets overlooked is really qualifying the person on, "Are they willing to invest the time on their end that would be necessary for the solution?"


Kelly: Yeah.


Dave: And so, if you get red flags there, another opportunity to think about disqualification.


Kelly: Yeah.


Dave: And then, so if we look at that, again, first step would be pain. Second step would be investment. The third thing would be really understanding their decision-making process. And I think, this is the part where people get held up. They might have a really good conversation around pain, what we’re trying to solve for. There are some alignment around investment. And then the person says, "Great. Why don't you put together a proposal?” And then you send it, and suddenly you find out after the fact that they need to go and sell this internally or they need to formulate a committee or whatever the case maybe. So it's that third piece of, what is their decision making process? Meaning, when are they looking to implement a solution, whether it's with you or somebody like you? Who besides themselves will be involved in the decision? How do you, as the business development colleague or professional, get them involved in the discussion?


Kelly: Right.


Dave: If they happen to be vetting you plus a couple of other competitors, what is the process that they have in place to evaluate you and your competitors? Will it just be on price, price alone? And, I think the other thing would be is really understanding, have they made this buying decision before? And oftentimes, when people have not, they then decide to hijack the process and they use their non decision making process to buy something that they've never bought before. And I find that, that's the place for the business development professional to move into a consulting role and to say something like, "Kelly, sounds like you haven't done something like this before. Would it be okay if I walk you through the steps that our clients have gone through?” So that they're in a position to make the best decision possible.


Kelly: Yeah. You said a lot of good things in that little encapsulated and yet there. I wanted to back up for a second and talk about understanding the decision making process on the clients end. Because, one of the things is if you are really asking the right questions, yes, you are talking about investment of time and investment from a financial standpoint. You are talking about all the things that you covered. But if you don't understand, who the actual decision maker is, and you don't understand that it's your job as the business development person to help the contact that you're working with to sell it internally, that's a really, really big issue. The other thing that you mentioned was obviously if you send a proposal. I'm a huge fan of never sending a proposal ever, ever, ever. So, if I can't get in front of you to walk you through it, then I am certainly gonna do a screen share to walk through it. And that's even more important if you are not the decision-maker. Because now, I have to basically train you or walk you through it so that you're so comfortable that you can, then in turn, sell it internally if I am not able to be in that room. So there's just so much nuance to this stuff. But all the things that you covered are super important. And I think those three or four things, those are, I mean that's really what it is. That's the game changer for sales in marketing.


Dave: Agreed. And I love, I love that you are advising do not send the proposal. Once you send the proposal, you lose leverage.


Kelly: Yup.


Dave: And so, I love that notion. And, if we were to add in another, that right there is another red flag. If the person is unwilling to get on the phone with you to review the proposal and they are just pressuring you to send it, again, I think that you have the ability at that point to make the decision to not send it.


Kelly: Yeah. I actually, in many cases, I'll advise my agency clients that if that actually happens where the client is or the prospect is asking them in a really, really demanding, "Hey, just send the proposal, we’re not gonna meet in person, we’re not gonna walk through it, or we’re asking these five other agencies." I tell them to actually push back and say, "If we can't sit down together and have a conversation so that you understand the value of what I've just spent time putting together on your behalf, it's not a good fit and we’re probably not the right agency for you." I am very strong about that because I think it goes into the abyss and then you're stuck in that waiting pattern that you are talking about before.


Dave: Love it.


Kelly: Yeah. So as we kind of wrap up here, are there some questioning techniques that you think the business development folks can kind of add to their arsenal? Whether it be from the offensive position or the defensive position.


Dave: Sure. I think the first one that comes to mind is the open-ended versus closed. Another way to think about this is asking the verb-led questions versus who and what questions and how questions.


Kelly: Yeah.


Dave: For example, let's say we're in more of a client servicing role to illustrate the point. If you were my client and I were to say, "Kelly, is there anything that our agency can be doing better?" Usually what happens is the person says, "No, nothing that comes to mind". Or if I say, "Kelly, is there anybody in your network that would benefit from our services?" To which you would say, "Well, nobody that comes to mind. But if I can think of someone, I'll let you know"


Kelly: Right.


Dave: So we can flip those questions into what and who questions. So getting back to the client servicing. "Kelly, what is one thing that we can be doing better for you?" Will elicit much, much more of a productive response.


Kelly: Right.


Dave: "Kelly, who within your network has some of the issues that you and I when we first got together? Right. Who are having some of those issues right now that would benefit from a conversation from us?" So those are examples of using these more open-ended questions. And I also think that, if you are going to, if your goal is to get information, and you lead with a lot of these close-ended questions: is, does, could, should, would; well, you want a receiving end of it will probably shut me down after that third closed-ended question because it will feel like an interrogation.


Kelly: Yeah, absolutely. I could see that.


Dave: I think the other thing to think about from a questioning strategy standpoint is not asking obvious, what I call leading questions. Right?


Kelly: You just made people feel stupid. It's horrible.


Dave: Yeah. Kelly, you're unhappy with your current agency, right? Right?


Kelly: That's why you’re sitting here.


Dave: Like if I start to feel like you are asking me questions that's going to get me into "Gotcha!" moment.


Kelly: Yeah. Yeah.


Dave: Then my immediate thing will be to shut down.


Kelly: Yup.


Dave: So, that's why adding language, like for example if I was looking to find out when you're looking to make a decision, I might say, whether you are looking to move forward with us or an agency like ours, "When would you like to have this project in place, when would you like to have this solution in place?" It's sounds less like it's a, for lack of a better term, a move, a closing move. Like when you think of the, “So, what do I have to do to get you into this automobile this afternoon?”


Kelly: Right.


Dave: I think that buyers, when they start to hear some of these questions that make them feel like they are being pushed into a close, they shut down.


Kelly: Yeah. Yeah. Really, really good stuff. I mean, these are like super actionable takeaways So, I know the audience is gonna love it. Dave, thank you so much. I mean, this is really, really good information. And, really appreciate you coming on the show.


Dave: Great to be on. Thanks again for having me, Kelly.







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EP 33: Sales Openers vs. Closers for Agencies , Dan Morris

On this episode of THRIVE—sponsored by Workamajig—Kelly and Dan Morris of Mindracer Consulting talk about the "sales opener" mindset for business development at creative, media and technology agencies. They go in-depth on why and how to pair a strong opener with an established closer to seal more ideal deals. 



EP 33: Sales Openers vs. Closers for Agencies, with Dan Morris

Duration: 00:20:45


Kelly: So, today we're talking about sales openers versus closers for agencies. And, I'm really excited to have Dan Morris from Mindracer Consulting on the show. How are you doing today, Dan? It’s great to have you.


Dan: Good morning, Kelly! I'm doing great. Thank you. And you?


Kelly: I'm doing fantastic because I'm talking to you, my new friend. So Dan's actually got this great mission of helping a thousand businesses to achieve a million dollars in top-line revenue over the next couple of years. And so, we've just met a couple months ago. I think our values and our approaches are so aligned, so I'm really looking forward to this discussion.


Dan: Yeah. Me too. I've been looking forward to this. It's a really good opportunity to have a chat about something that just seemed to click when we first met, and really excited to share this. Yeah. It’s been really interesting to discuss so far.


Kelly: Yeah. So what we're talking about today is really this idea that most agencies whether they’re creative, media, technology agencies, they think about, well first of all, they think about sales as a as a four-letter word. We don't like to use the S word in the agency world, right? So, we call it business development. And one of the things that we typically focus on in the agency world is how do I get a good closer? And what you've sort of enlightened me about was the fact that we're not having enough conversations about finding great openers.


Dan: Yeah.


Kelly: So I guess we'll start off talking a little bit about that, where you kind of, I won't say discovered this, but where you kind of came from with this idea and why it's especially important for agency leaders to really to grasp on this concept.


Dan: Yeah. Cool. So it comes from personal experience way back in the day when I was first cutting my teeth in an agency. I was a salesperson, but I was actually hired to book appointments for the sales director. Sales director is an awesome closer, somebody who is really strategic and could really get under the hood with a client and was able to bring in big accounts all the time and do it with a big smile on his face. And they hired me to fill his calendar with appointments. Short story on that is I only ended up doing that for about three weeks before transitioning into sales broker. But actually the door opening mindset was with how I was brought into that agency.

And so, I would do a bit of research, then call people up, and I'd get them on the phone, and we'd give them a good reason why we'd want to come and meet them. And I kept doing that, and even when I was promoted to a salesperson, that's what I kept doing. But I wasn't closing that many deals, and I couldn’t work out why, coz I was going in with my preparation, and lots of good reasons, and a great chat. And I went with a sales trainer, and he actually observed what I was doing. And we went for lunch after I've been to this big meeting. He said, how did I go down, how was it? And I’m like, “Yeah, it was awesome. I think they really like the agency. I think they liked what we were doing. They really liked what we were trying to paint the picture of the future for them. Yeah, yeah. Yeah.” He said, “What did you forget to do?" "I don't know, tell me. I'm not sure.” And he goes, “Did you ask for the business?” “No.”

And in that split second it changed my entire mindset on, "Oh yeah, actually we've got to be doing business for them to experience value." They want to do all these things with us. I didn't make that natural close. And so, what I've observed ever since is I can show people how to be better researchers. I can show people how to find better reasons to get in the door, but as I've been working with more and more early-stage businesses over the last few years in consulting and working with startups, I found that founders, especially, want to hire a closer because there's a lot of time and effort involved in selling and they want to take the closing roll off of themselves.

But what they don't take into account is that founders are normally great openers because they're so passionate about their business, and they just naturally talk with great passion, and they know all the details about their business whenever they meet somebody. So they’re openers anyway. They hire a closer to go close more deals but maybe they've actually just hired into somebody who's got a blind spot, maybe that person has been great in a larger agency before them. They've been supported by amazing marketing or maybe they've been supported by somebody who is introducing them as a business development. It’s is often referrals and networks, right?


Kelly: Right.


Dan: So if you just hire somebody who's good at closing deals, when they're brought to you, and your agency needs somebody who can go and open doors, because you don't yet have an upper hand or a huge marketing machine, then you're leaving yourself with a blind spot and setting that person up to fail. So the clarification is that if you feel like you're not getting enough cold leads, anyway, then you need an opener. If you feel like you're getting loads of leads and you actually need somebody just to work through that process and close them, then you might need a closer, but be clear about which one it is because you set people up to fail if they're not the right person.


Kelly: And this was why it was such an interesting discussion when we started chatting about it over lunch that day, because I don’t think that agencies understand the differences. They just think a business person should do it all and what you're saying is that there are actually characteristics and there are things that people are great at on the one end, the opening end and versus the closing end.

So let's talk a little bit about the characteristics of a great opener. Like if an agency leader is listening to this, and they're thinking, "Yes, we have some referrals and some word-of-mouth, and we have a couple of leads coming in, but we'd love to have more of the conversations with- from an account-based marketing perspective, we want to target these top 50 agency that we want to go after, and maybe it is an opener, what kind of personality or what kind of partners should they be looking for when they’re thinking about hiring the right opening candidate.


Dan: Yeah, so it’s somebody who really enjoys researching the depths of the account, right? So they're gonna have a history of getting into account somehow, right? They might have been doing business development themselves before but not closing deals. And the world of software’s has got this down to a pretty good tee right now. There's a role out there called the sales development rep, and they're actually tasked with researching verticals and go in an opening conversations doing a discovery call, but not closing the deal.

And so, you might find somebody who's already been doing a role like that within a software company, within a vertical, that you want to talk to. That could work pretty well because they're naturally they’ve known this, not just booking meetings. And somebody might want to come away from that world and into potentially- it’s a creative agency or something similar, and there’s a discussion to be had there, because they can have a bigger impact on a smaller business, or if you want to build a team of these people. They're all aspirational and want to get into sales roles eventually.

If you're working with the kind of brands they want to work with, then fundamentally you can get that opener into the door, teach them how to do close when you've got a warm lead, and you can develop them into the business, right? It's unusual, but it does exist, the SDRs or openers would actually stay as openers for a long period of time. There's a management role for them there as well, for the people who like doing that all the time, who want to teach other people how to do it, but your hardcore always be closing sales manager is quite different than the person who's like let's get these people passionate about talking to us.


Kelly: Right, right. I used to be a big fan of the always-be-closing mindset, and I think you having turned that around for me; it's always-be-having-conversations.


Dan: Yeah, so the people that really fly in this role sort of the natural sharers of information, they've always got a fact, they've always got a bit of info there, that they're really interesting to talk to but they're not really asking for anything like they're sort of a natural educator. “Hey, let’s have a conversation about,” because they’re really passionate about it. That's a great person to get a phone call from. You get a phone call from somebody who's like, "You must buy feature right now," that's not the type of sales that necessarily works for building any relationship with somebody that you want to really work with in the long term. If you've got a product that's 99 cents you have to do that, but if you're building an agency relationship with a client, it's different, right?


Kelly: Totally different, yeah. One of the things that we’ve talked also was this idea of the opener needs the closer, or the closer needs the opener, and then how that actually transcends into making the entire, I don't want to say sales process, but we'll just call it that for now, making that entire sales process one that gets you to the point, or gets your agency to the point, where the contract and even the pricing is much less of a negotiation and much less of part of the conversation. So I just kind of wanted to pivot a little bit in that direction.


Dan: Yeah, cool. So I’ll rewind a little bit. The other night, couple of nights ago, I was hosting a dinner with some friends, and we did sort of a Jeffersonian style, we were talking about all the problems that you have when you hire sales first of all, right? And a lot of so many people have had the experience of having a bad salesperson. But actually was the experience that the onboarding for that salesperson was unsuccessful because they just wanted to have a closer or they really wanted somebody who wasn’t a fit for the role that they needed. And it is really about painting a picture of what that future looks like when you're working together.

If you’ve got an idea of a shared future that works better than what they've got at the moment, then the contract's just something that happens along the way like the contract, like the work starts, and the deliverables begin when that contract signed, and a lot of closers will focus only on getting that contract through the door. But especially in agency businesses, often that person’s managing a relationship with that client on an ongoing basis as well so the first contract is only the time when they really start spending even more time together.

If you get somebody who's hardcore about getting that first deal in the door, it might be a bit too rough, whereas actually if you're having a conversation about his clients they’ve worked with for 5 years in this industry, "I thought you might like to have a discussion about where the industry's going." Or, "We’re doing an educational seminar about XYZ. Would you like a seat? Would you like to come? How can we help?" You want to just help people, then more naturally, people will come to you. And sales is very different than it was even a couple of years ago.


Kelly: Yeah, I agree.


Dan: The content you put in outbound in any of your social channels people are going to have a look at that, they’re going to qualify a lot of people out, and if you're being too aggressive and not having a helpful conversation about what you're really good at, it’s not going to be a fit in the long term anyway. A contract for me these days is really I think I was asked, as just being at an event on the timeline. It's just something that is along the way.


Kelly: Yeah, it's interesting the way that you think about that and because of your past experiences, you have like a completely different mindset about that because I think most people in the agency world think about the contract as this holy grail, the thing that we have to like push and it’s this push thing and if we can get them to sign the contract, then we’ve got them. And I think it’s just the wrong mindset. What you're talking about from what I’m hearing is a lot more having those conversations, asking a lot more than talking, listening a lot more than you’re talking, adding value where you can, and parting your expertise within reason.

Obviously, you want to hold some of that expertise because that’s what you’re playing for. But at the end of the day, I mean that contract, giving the pricing and all of that, really is just sort of like a blip because they understand through this whole conversational process that you are the right fit, that you actually care, that you have the expertise, that you have the clients, the history of that success and you can solve their pain points and their problems like you’ve done for other people. So it becomes like oh necessary or just natural, essential like you're saying.


Dan: Yeah. I mean, if they open a cool and calm conversation with a prospect and they’re having a discussion around the change in the industry that's happening that the agency can help with, or a recent experience that they've researched, then they can see the client as had. A recent event that the agency's being able to help out with or something like that and they can agree that that’s a challenge for the company. Then the next part of that is "Look, if you could paint a perfect future, what would be your criteria for being very satisfied six or twelve months down the line?" And if you get that out there really early, then they will begin to work with you. "Yeah I’m on it. We both need to make some changes in order for the success of the timelines really work."

"If I was to look back twelve months from now, what would make you feel really satisfied with the future relationship with your agency?" That gives you a very different answer than, "What do you want today?" And then if you’re confident, you can align with those criteria then the negotiation piece, it just becomes much less about deliverables and much more about the relationship and how you're really gonna build a team around them. And then once that first contract is done and we’re all focused on how we get into that twelve month point, or beyond, I've seen that reduced friction a lot.

And even when you do get a legal negotiation, you can- even if an external legal gets involved, which happens sometimes, you can then still go, "Hang on a minute, we’ve been working together on this all the way through. We agreed that in order for you to be satisfied, XYZ needed to be present. Here they are. So we don't need to negotiate those pieces anymore." And having your friend, who you've been negotiating with all the way through, in the room helping you work through their own legal process has been a really powerful way of doing that. Establish criteria satisfaction, relate those to the contract, relate those to the future, and you'll find the contract is much less of a pain point and much more of a facilitation to move you into the relationship.


Kelly: Yeah. And just to start wrapping up a little bit diving into that- what does success look like for the client 12 months out? I love that because that tells me exactly what I need to reiterate to them throughout the process, reminding them of the words that literally came out of their mouth. Remember when you said this is what the vision looks like, we’re aligned on that and just reminding them that that’s where they said they wanted to go and let them know you will help them. I think that’s great because…and that’s where I was coming from before. We’re doing a lot more of the asking and the listening than the talking necessarily because I think that people give you a tremendous amount of information then you ask the right questions, and then you sit back and you just let them kind of tell you what they want out of you when you meet them. Like you said, if you feel like you’ve fulfilled those requests and be up on there, then it’s smooth sailing.


Dan: I think the North Star on this is to go from vendor to partner.


Kelly: Oh I hate the V-word. I hate the V-word.


Dan: Right? But that’s…


Kelly: The worst.


Dan: It’s a mindset that people definitely have, and I've even seen it very recently in a particular pitch where I walked into with a client and they were having this amazing onboarding day for a whole lot of new team members. I said, “Hey, you do this with partners?” And there were, “No.” And I was like, "Okay, that’s an interesting one. Wouldn't it be great if we could get to that point where, look, we’re doing this twelve month thing together, let's get together and talk about that and be available and having that discussion."

And if that’s about communication, communication is one of that criteria satisfaction, you can come back to them all the time and say, hey, look, kind of one of the things we've really established as something you want from your partner, we’re here to tell you there's a change happening and we need to do something about that or here’s an idea that can really move the needle for you. Let's work on it together. And I've seen that sort of thing, especially when we agreed on it all the way through if that’s what they wanted. It lets the agency be much more forthright in what they’re suggesting.

Which means that creates upsell opportunities as well. Let’s be really clear. Those sorts of relationships and that sort of candor, there’s no kidding when you’ve got that sort candor, you can bring ideas much more easily than you can if you have to go, "We would like to add another item to the contract," you’re like, "Wouldn't you like to work on this idea together?" And with that sort of motivation and energy that I've seen it move much easier towards getting additional budget as well. So yeah it really does align commercially but also it’s an easier client to service if you're working in that partner mindset.


Kelly: At the end of this though, you’re really about ideal clients because even- it’s really working with a client that is less risk-averse, that is into the innovation, that is wanting to be that partner, and wanting to come up with ideas together, collaborate and then see those things through. You can’t do this with every single client. There are going to be a lot of clients that will push that.


Dan: Absolutely agree. And the focal point for any sort of outreach from an opener has got to be not necessarily just the ideal type of company but the ideal personas that you can identify who’ve got particular character, particular challenges, particular experience that you guys really resonate with, and you can research and find those people by facts and features in LinkedIn and so on. But then you'll know when you're talking to the right type of person who’s really great fit for the agency, and that’s an ideal portrait for how you’re gonna get that kind of collaboration and communication.

And the more research you can do to identify that persona based on the existing clients you’ve got, the more likely your opener will be to succeed and have those great opportunities, and the easier it will be for whoever in the business closes those leads. And then everyone in the business has an easier way of working with the people that you do bring in. That’s definitely the idea. I know you’re big on positioning. Who you help and how you will help them, I totally align with that as well. We live in a beautiful big country with lots of opportunities and lots of people to talk to.

What's the best refining you can do to give your opener the best chance of success and give the business the best chance of growth in the short medium and long term. And that’s top of the project, then finding people to cover your blind spots is the next, and then enabling them by making sure if they’re not a natural opener, you get an opener on the team as soon as you can, and if they’re not a natural closer, then you get some training to help out that person get a closer, or you bring in a closer to support them. Those two bases need to be covered.


Kelly: Yeah, for sure. Well Dan, thank you so much. This is a great conversation. I know everyone who’s listening or watching is going to get a lot out of it. So I appreciate it and maybe come back on the show maybe in 2019, and maybe we can talk a little bit about personas, and go a little more in depth with that.


Dan: Yeah, for sure. That’s one of my favorite conversations too.


Kelly: Yup.


Dan: Thank you Kelly. Have a great day!


Kelly: Bye-bye. Cheers!





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EP 32: Better Presentations for Winning New Business with , Pat Quinn

On this episode of THRIVE—sponsored by Workamajig—Kelly’s joined by presentation coach, Pat Quinn, as they cover how speakers can effectively communicate their message for the greatest impact. Pat shares some best practices—how to train your audience (prospects), set momentum and gain clarity for executing the perfect pitch presentation for new business.



EP 32: Better Presentations for Winning New Business, with Pat Quinn

Duration: 00:23:09


Kelly:  So welcome to another episode of Thrive. Today we’re talking about better presentations for winning new business, and I’m really excited to have Pat Quinn on the show today. Pat’s a presentation coach, specializing in helping speakers to effectively communicate their messages for the greatest audience impact. And you can find out a little bit more about Pat at But Pat I’m really excited to have you today. Thanks so much for joining me.


Pat: Absolutely. It's a thrill to be here.


Kelly: So you work with all types of professionals who just need a ton of help with presentations, speaking engagements; how to just effectively get across or really impact their audience. Why do most people, in your opinion, why do most people get hung up on this aspect of business and even I guess you could say, crosses over into life. But presenting in front of an audience, why is it so tough?


Pat: Oh, that’s one of the greatest fears that people have, standing up in front of others and presenting. And I think a lot of times we get in our own heads. We worry so much about what everybody else is thinking, and we worry that this is the break-all, end-all presentation in the world.

 And the truth is, if you just got up there and were yourself and you’re authentically and transparently you, it wouldn’t be any different than a conversation. It wouldn’t be any different than picking up the phone and talking to somebody or walking over to your friend’s house and having a conversation.

 But we get in our heads when we hear the word “presentation” or we have to present or we have to pitch. And then, all these games start to play and a little voice in our heads says “They’re not going to like you.” And a little voice in your head says “You’re going to blow it.”

 And a little voice in your head says “This is high stakes.” And when you have high stakes presentations, but we have high stakes conversations too. Our mind just seems to treat them differently.


Kelly: That’s really interesting. So what would you say…? I mean I know that you’ve done keynotes all over the world for RTI and other things, but you’ve also probably seen a ton of keynotes, the good, bad and the ugly, right?


Pat: Oh yeah.


Kelly: What would you say are the characteristics of an effective presentation to an audience? Well … I’m sure that there’s like a few common things that you know, as long as they hit these marks, you would consider that effective.


Pat: Sure. Well actually I didn’t get my start as a professional speaker. I got my start as a professional magician and I work magic for 10 years. Then I realized I needed to get a real job, and so I became a public school teacher and I taught school for 12 years, high school Math. And during that time, I picked up an advance degree in how adults learn.

 And so one of the real focuses of what I do, is to focus on how the audience receives the information. And so I think two things come out of that when I look at presentations, and I watch other presenters, and I put together my presentations. Yes, there’s a little bit of stage craft in getting the audience to pay attention based on how you’re moving, and how you’re facing, and what you’re saying.

 But the other part that I think is really important, a thing that I think great speakers do that other speakers don’t is to pay attention to the audience more than paying attention to yourself. I know tons of speakers who film themselves, either with their phones while they’re speaking or they have a friend with a little video camera and film themselves. And I always tell people “Turn the camera around and film the audience.”


Kelly: Yeah.


Pat: You know what you look like, but you will learn so much simply by watching the audience during your presentation. You’ll learn the boring parts of your presentation. You’ll learn the super exciting parts of your presentation. Most importantly, you’ll see when the audience is leaning in toward you and holding perfectly still. When the audience is still, that’s a good sign. That means they’re in the moment with you. When the audience is shifting in their chair, looking through their phone…


Kelly: Checking their phone.


Pat: Oh yeah, checking their phones of course is the worst. When they’re doing anything like that, you haven’t captured them. Those are the parts of your presentation you should cut. And when they’re taking notes, holding still, leaning in to you is when you really have them. Those are the parts of your presentation that are the best. Keep those parts, get rid of the other parts, and your presentation will get better like that.


Kelly: Yeah.


Pat: But nobody focuses on the audience. Everybody has the camera on them like “Oh, I don’t like what I do with my hands there.” I don’t care if you like what you did with your hands. Did it quiet the audience? Did the audience like what you were saying at that moment? That’s the most important thing. So I would say the greatest speakers in the world focus on the audience more than they focus on themselves, and that’s the fastest way to get better.


Kelly: Right. Who do you think is one of the best speakers that you’re ever heard?


Pat: There are some speakers who are technically perfect, there are some speakers who are just really good to listen to and so, I would… Marcus Buckingham who’s like, “Now go discover your strengths.” He’s one of the strengths guys. He is just an amazing presenter.

 He sets the rules early in his presentation often when presenting in the United States, he’ll tell a joke, and he’s British so he’ll be like, “Well that was British humor, you probably didn’t get it. I’ll hold my hand up like this when I tell jokes from now on and then he’s kind of trained the audience." So if he tells a joke and it goes over or doesn’t go over, he can just stop, pause a couple of seconds and go like this and then the joke goes over.


Kelly: Right.


Pat: So what he’s actually doing there and what great speakers do is from the moment they go on stage, they’re training the audience. Like I tell speakers, “You know you should walk on stage about one and a half times your normal walking pace, not your normal walking pace, not saunter around the stage.” And the reason you want to do that is because you’re training the audience.

If you saunter on the stage, the audience will be like “Oh, this is going to be a slow moving presentation. I’ll have to think about things and solve problems while I listen to you. I’ll have time to check my email while I listen to you.” But if you walk on stage a little faster than you normally do, start talking a little faster than you normally do, start delivering real solutions right away, the audience will be trained from the very moment you go onstage.

  “Wow, this is going to be a fast moving presentation that I have to pay very close attention to. I better set down everything that I’m doing and pay very close attention to this.” So I think Marcus Buckingham probably trains the audience probably better than anyone that I’ve ever seen, and because of that, his presentations are just amazing.


Kelly: Yes.


Pat: They’re funny, they’re fast-moving. Joel Osteen, Pastor of Lakewood Church, is technically one of the most perfect speakers in the world. You can learn… he’s on your local television station every Sunday with a 25-minute message. Look him up, watch him. You can learn more simply by watching his technique. He gives a different 30-minute message every single week, and they look like they’re all memorized. If you watch, you’ll barely see him checking his notes.

His stage movement, the way he warms up the audience, he really understands audience momentum as well as anybody I know. At the start of your presentation, you know, I talk to presenters, or just business people who are presenting to a group that they are trying to sell to or pitch you, and they’ll come out of the room sometimes and they’ll be like “Wow, they were just dead” or “The audience just didn’t have any energy today.”

 A lot of speakers don’t realize that it’s actually the role of the speaker to bring the energy into the room, not the role of the audience. And if you have a speaker who’s blaming the audience for being low-energy too often, there’s good rooms and there’s bad rooms to be in.

If every time you’re coming offstage and saying “Oh, the audience was just dead. The audience just lacked energy,” consider the possibility that it may be you who’s not bringing the energy or you who’s not warming up the audience. And you watch Joel Osteen warm up his audience, from having them say a chant … repeat something in the beginning to opening with a joke, he’s so intentional about it. He starts every week by saying “I’d like to start with something funny,” like he tells you the technique that he’s going to use.


Kelly: Right.


Pat: Of course, you’re going to start with something funny. Most people just don’t admit it, they just try it. He comes out and says “I’d like to start with something funny, so here’s something a little funny to get you laughing.” When the audience laughs early, the audience is breathing. When the audience is breathing, the audience is ready to learn, and they’re ready to listen, and they’re ready to sit.

 And so he does technically, he’s about as perfect a speaker goes. I tell everybody to watch him because you can learn from his technique. And then I point you to David Copperfield. David Copperfield is a magician. He’s performed in front of more people than any other human being in the world. He performed in front of more people than The Beatles, than Elvis, than anybody and he is the best at controlling the audience’s attention. When he wants you to look this way, he gets you to look this way.


Kelly: Yeah.


Pat: He does with his eyes and his hands, with his music. When he wants you to stand up and clap, he gets you to stand up and clap. They raised the house music up, they brighten the lights just a little bit. He goes like this with his arms and you stand up and clap like you can’t stop yourself and you don’t know why. He’s really the best at it. So from pure physical standpoint, David Copperfield controls the audience better than anyone I know.


Kelly: Right. So aside from pastors and magicians, let’s talk a little bit about those in the creative agency world. So in those cases, you have people that are creative directors or account directors, you know, maybe someone in client services that’s head of a department, there’s a ton on their shoulders, and they are basically pitching for new business that’s going to impact the success of this agency, right? It could be this year or it could be longer term but, obviously, they have some pretty high stakes.

 What are some of the best practices for those, you know, in our audience who are watching and listening from that perspective where the audience is smaller. There might be 3 to 8 people around the table and, you know, you’re kind of presenting either a strategy, a new creative concept, whatever it is, but it really has to be exactly what you’re talking about, getting that audience to just really sink in to … maybe not so much the content but how it’s being delivered. Like what are some best practices for a situation like that?


Pat: Absolutely. I mean even though I’ve worked with New York Times best-selling authors and 6 different Olympians and some of the best speakers in the world, most of my clients are business owners; business owners and principals who want to grow their business and get new clients through presentations, and so that’s most of what I do.


Kelly: Yeah.


Pat: And the number 1 thing we want you to do when you go in to any presentation, whether it’s a keynote in front of a thousand people or a pitch in front of 3 people is to have total clarity, total clarity on the problem you’re solving for the audience. And what we find is that if you have clarity on the problem that you’re solving for the audience, that you would… it’s very easy to put together a cohesive, short, direct presentation.

If you don’t have clarity on that one question, “What problem are you solving for the people that you’re speaking to today?" Then your presentation is usually a mess. It goes down a bunch of cul-de-sacs. It’s disorganized. It’s much longer than it needs to be. And so one thing that we have you do when … before we start writing a presentation or put one before you start thinking about what you’re going to says is, get real clarity on what problem are you solving for the group of people that you’re speaking to.

Put it up on the whiteboard in the room as you’re putting together the pitch, and you’re going to give a much better presentation. And then, the second thing, right before you walk into the room, take a deep breath, get your nerves together, and remind yourself “This is the problem that I’m solving for them.” Because if you don’t know that, the presentation itself is going to be a mess. And so, that’s one thing that we want to right off the bat; just make sure that we have total clarity on that.

 If you want to engage the audience in front of you, whether it’s 1 person or hundred people, there is no technique better than episodic storytelling. Episodic storytelling is to switch from being a third party narrator, where for instance maybe you want to talk a little bit about the qualifications or how your business got started if it’s a new client that’s never met with you before, and you just want to tell them your founder’s story a little bit.

You can say, “You know, 16 years ago, we started this agency,” and now you’re telling it like a third party narrator, like if somebody wrote a copy for your website, they would write it that way. Or somebody who was writing your biography, they would write it that way. Instead, switch over to episodic storytelling. "It’s 2001, it’s 2 o’clock in the morning and I’m driving my Ford Taurus through rural Kentucky, and I asked myself, 'What am I doing here?'" And immediately, anybody who’s in the room with you, is going to be into the story.


Kelly: Right.


Pat: Like they’re in the car with you at 2 o’clock in the morning driving to rural Kentucky wondering what… “Okay tell us, what are you doing here? It’s 2 o’clock in the morning.”


Kelly: Yeah.


Pat: The moment you switch over to episodic storytelling, which is to take somebody in the room with you, bring him to a moment with you, and they will hear what you hear, see what you hear and see what you see. If you do it right, they’ll even smell what you smell. It… this doesn’t have to be an epic 30-minute story, by the way. You could do this in 30 seconds. You can do this very quickly.

"My daughter got into a car accident the other day and she called me. I got the call no dad wants to hear, which is my daughter got her first car accident. When I talked to her on the phone, I realized she was only about a mile from where I was, so I drove over there. And when I got there, I saw her talking to the police office, and I parked my car, and I walked up to her. And she was holding it together when she was talking to the police office. When I walked up to her, the moment I walked up to her, she just gave me this big hug, and she just let it all out on my shoulder and just started crying." And at that moment, everybody in the room is like right there with you.


Kelly: Yeah.


Pat: Like they’re at the moment with you. They’re hearing her cry. They’re feeling her hold you. They’re like feeling her fear, and her worry, and her concern.


Kelly: And her relief when she saw her dad.


Pat: And the relief when she saw her dad! Like they’re in the moment with you, and that’s the difference between episodic storytelling and third-party narrator story telling. And most people, when they’re in a presentation like that they go, "I got to have this all buttoned up. I should read them my resume."

"We’ve worked with these clients, we’ve been doing this for this many years. Here’s our specialty," and it’s like that… They’re going to read that like they would a resume. They’re just going to like glance over it, not hear any of it. But if you can switch even a moment of that into episodic storytelling and take him to the room with you, now they’re emotionally invested with you, like you’re emotionally invested in that story.

 And once they become emotionally invested with you, they’re going to want to do business with you. They’re going to … and they’re going to see you from a creative standpoint like it’s going to show them how well you can draw people in with your creative work.


Kelly: Yeah that’s … it’s such a great takeaway. I love that. Now you actually refer to your coaching process as total audience mastery. Can you talk a little bit about that? And one of the things that I found really interesting about it was that you’re helping people improve but without changing their own style or changing their content. So, if you can talk a little bit about that process, I think I would find that interesting.


Pat: Sure. The biggest fear that somebody has when I tell them I’m a presentation coach is, “Oh, you’re going to get me to change my style. I stand still. You probably are going to want me to move around like in a V formation.” I don’t have a formula. Some people do, apparently. And I’m not going to teach you tricks. I’m not going to teach you tricks to manipulate the audience because I actually don’t want you to manipulate the audience.

People often ask me, “Do you work with actors and actresses?” And I don’t. I actually do just the opposite. Actors and actresses are pretending to be someone they’re not. I’m actually getting you to be authentically you so that they can see you, and want to do business with you, and want to come close to you. And so from that standpoint,  when you’re pitching, I want you to be authentic and transparent.

We call it as “palms up presenting.” Don’t think of it as a performance where you’re pretending to be someone you’re not. Think of it as just standing there with your palms up saying, “This is who I am.” And I think you’ll be attracted to that and want to do business with that. And so from that standpoint, we want you not to change your style or change your content.

We want you, instead, to use our technique which we call Total Audience Mastery, because we’re going to insert into your already ready presentation, or we'll write a presentation with this already built in, up to 15 things. These are not my opinion, these aren’t nice things to have in a presentation, these are research, research by Robert Cialdini, research by Daniel Pink, research by Scott Adams, research by a bunch of people who are out there every day researching how an audience responds to information that they’re receiving.

And so, one technique that we recommend you using is, for instance, referring to yourself by first name during your pitch. And so, "I was taking the garbage cans out this morning and the guy next door to me was taking his garbage cans too and he yelled across the driveway, 'Pat, today is the recycling day or is that next week?' And I said, 'No, that’s next week. Just garbage today.' And he said, 'Oh, okay. Thanks Pat.'"

And when you do that, what you’re actually doing… if you do that early in your presentation, like… and if you’re going to do it more professionally, you might say, “You know, one of the most common questions I get from people I work with is, “Pat, what is the best way to begin our presentations?” Then I just go on, and I teach, and I teach, and I go on with my presentation.

I don’t draw attention to it. I just do it. What happens when you do that is the audience immediately begins rehearsing in their mind having a conversation with you. Even if there’s two people in the room having a conversation with you, it’s amazing how the human mind works. You immediately begin rehearsing, “Hey, if I talk to him, I’ll probably call him Pat,” which is all of a sudden is informal.


Kelly: Right.


Pat: Which, all of a sudden, indicates, “I trust you, and I know you because I’m calling you by your first name.”

And, all of a sudden, I trust you more than the person who came in right before you and pitched them, because you referred to yourself by first name. That’s one of like 15 things that we build in to your presentation that aren’t like…

One thing that we often will say is, I don’t really care what my opinion is. I don’t care if I like that part of your presentation or not. If it’s scientifically proven to get the audience to respond a certain way, that’s something that we want to add to your presentation. We want to add it in a way that is cohesive. We want to add it in a way that is true to you and authentic to you.

But, oftentimes, people just go in when they give a presentation, and that’s what they like, when they don’t realize it’s actually a ton of research. Daniel Pink has been researching this for years. Robert Cialdini has been researching it for 40 years, how the audience responds.

What pictures you have if you’d have a slide deck, what background pictures you’re having between your opening… behind your opening slide. It makes a huge difference. All these little things that we build into your presentation that are going to make a difference in how the audience… even if it’s an audience of 1 or 2, will respond on the back and to your presentation.


Kelly: Yeah, yeah. That kind of stuff is so interesting to me because it is so nuanced. You’re not talking about changing the big concept, or the big reveal, or anything like that, but it’s all the little things that everyone else thinks doesn’t matter. They matter… Those things matter a lot, you know?


Pat: Oh, yeah.


Kelly: So as we start to wrap up, that’s actually a great segue to my last question which was more about this idea of “From the audience’s perspective,” right? Because we could talk about the actual presentations and you know how the nuance changes that you make or suggestions that you make. But at the end of the day, the audience is really the whole thing, right?

 I mean we’re trying to convince them or to get them to emote. We’re trying to get them to connect, to trust us, all of those things. So, why is an engaging speaker one that hits all these marks that we’re talking about today, why is that engagement so much more important to the audience than even the content sometimes?


Pat: Well, the reason that it’s more important is because if you don’t do these things correctly, the audience won’t even hear your content.


Kelly: Right.


Pat: If you say something in the opening 30 seconds, when you’re introducing yourself that hacks off the audience, or is offensive to the audience, or just doesn’t connect with them…


Kelly: Yeah.


Pat: Then they train themselves in their mind, “Oh I’m not connecting with this person.” Nobody actually says these things, but this is how the mind works. “Oh I’m not connecting with this.” And then, I think of the human brain like has some bandwidth. It has processing power and sometimes we devote 100% of that to the speaker and sometimes we devote just enough to be polite, you know? We usually don’t walk out of the room in a live presentation. I’m telling you, if you do these things in a webinar, they’ll just click off.


Kelly: Yeah.


Pat: If you do these things in a webinar, they’ll just go check their email while during the webinar and it might look like they’re still on your webinar, but they’re not actually in the webinar. In the room, nobody gets up and walks out. Usually, they’re not that rude, but they’ll just be present and thinking about other things. They’re going to be thinking about their next meeting. They’re going to be thinking about some problems they’re trying to solve.

They’ll be thinking about what they’re going to do tomorrow night after dinner, and they’re not really paying attention to you. On the other hand, if you do the right things in the opening few minutes of your presentation, they’re going to devote a lot of bandwidth to you. They’re going to give you all their processing power and actually hear your content. And so the reason it’s more important than your content is because if you don’t do it right, they never get to hear your content.

So from the audience’s point of view, I do think that going in there... and one mistake that many, many professionals make, you are giving pitches and trying to draw business in clients is they speak the language of “my side of the table.” And so when I’m speaking, I’ll speak the language experts. When I talk to …coach medical professionals like chiropractors, they’re speaking the language of medical experts.

With creatives, you’re speaking the language from your side of the table in words that you use in your office, but they’re not the same words that the other side of the table would use. I’ve heard it said once that all great presentations start in the language of the client, or the prospect, and they finish in the language of the expert.

But at the start of your presentation, you’ve got to be describing the problem that you’re solving, which you have total clarity on. You have to be describing that in their language, not your language. And most people, when I say, “What problem do you solve for the audience?” don’t actually give me a problem. They actually give me a solution that they’re offering and selling.


Kelly: Right.


Pat: And that’s a sure sign that you don’t have your language right.


Kelly: Right.


Pat: You haven’t thought about the problem from the client’s point of view, and that’s why this hyper-focus that I have on the client, on the audience, on the prospect. That’s why it makes all the difference, because if you don’t speak their language in the beginning and do things to draw them into the presentation, they aren’t going to even be there to hear your content.


Kelly: Yeah, yeah. Great points. Pat, thank you so much for joining me today. I really, really appreciate it, and I’ll definitely put a link to into the show notes.


Pat: Absolutely. Thanks for the opportunity.


Kelly: All right. Thanks. Take care.


Pat: Bye-bye.

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EP 31: Top 3 Contractual Gaps for Agencies, with Sharon Toerek

On this episode of THRIVE—sponsored by Workamajig—Kelly talks with Sharon Toerek of Legal + Creative, an IP and marketing law firm for agencies. They dive into MSAs versus short-form Terms & Conditions, Independent Contractor Agreements, and Digital Influencer Agreements for liability protection and FCC compliance.





EP 31: Top 3 Contractual Gaps for Agencies, with Sharon Toerek

Duration: 00:18:06


Kelly: Welcome back to THRIVE. Today, we're talking about the top three contractual gaps for agencies and my guest is Sharon Toerek. How are you doing today Sharon?


Sharon: Hi Kelly! I'm great. It's good to be here.

Kelly: I am so excited to talk to you. Today we're talking about these contractual gaps. So you own Legal + Creative in Cleveland, IP advertising and marketing law firm.


Sharon: Right.


Kelly: And I just think it's going to be a great show because a lot of agency owners that I talk with or who write in to me are always asking me different kinds of legal questions, and I have to find some kind of resource. So now this show is going to be a great resource to them as well.


Sharon: Awesome, yeah, I'm happy to do it.


Kelly: Yeah, thank you. So everyone after the show head over to to download your free marketing agency legal audit checklist. Alright. So Sharon, let's start today by talking a little bit about the dreaded three letter M.S.A. Master service agreements for client engagements and what you typically advise clients on when there are smaller projects or even like one-off projects. How should they handle things like that?


Sharon: Well fundamentally, the first thing I always like to share when it comes to client contracts or agencies, is that I'm not really hung up on what you call them. What I'm hung up on is making sure the agency protects itself appropriately, given the size of the risk involved and the work you're going to be doing for your client. So, what we typically recommend is that you have two documents in your toolkit that help you with your agency-client relationships from a legal perspective. And the titles are just that.

You can rename them if you---I actually had an agency owner approach me after a conference presentation and he said we don't believe in contracts at our agency. And I'd started to talk with him a little bit more, and he said, because you know our point of view is that the client can leave whenever they want to leave and so can we. I said okay, so how do you express what work you're going to be doing for the client?

And he said, "Well I have a statement of work." And I said, "Well, I don't care what you call it. The idea is that you've got something in writing that says what's going to happen and what the legal terms are." So, what we generally advise are one or the other of the following. In every agency you really have both. First of all, the M.S.A. the master service agreement, and even if you're an agency that tends to work off what the client presents to you in terms of documentation having a master service agreement of your own is an absolute top recommendation for any agency, because it's going to give you your own benchmarking tool for actually reviewing a master service agreement that a client might present for you.

So a master service agreement is more appropriate really for the larger volume, or longer term, or larger client relationships that your agency has. That's for a few reasons, you typically need a more robust agreement, and then secondly, most clients of that size or who are throwing projects your way that are of higher dollar volume are going to expect a more comprehensive agreement, and they're more comfortable with a master service agreement than something that's more abbreviated.

For other relationships where your agency is working strictly on a project basis or for those lower dollar projects that you're working on for a client, having a short form set of legal terms and conditions that you can incorporate into your statement of work, or your proposal, or your estimate, however you like to coin them at your agency, is a great tool as well. Because it enables you to capture all the essential legal provisions for the engagement in a less formal and a more abbreviated way.


Kelly: Okay, great. So we need an M.S.A and we need the short form…


Sharon: Legal terms and conditions, right.


Kelly: So now let's change gears a little bit and talk about freelancers. There are so many people that are leaving agencies and they're becoming freelancers or consultants. What do agencies need to know from a protection standpoint in regard to independent contractors? Because I know that comes up every single day with agencies.


Sharon: Sure, it's actually related to how I got into the industry of working with marketers and then agencies.


Kelly: Oh really?


Sharon: Yeah, I'm an intellectual property lawyer by training and background, and I think agencies tend to undervalue how much intellectual property they're actually creating. And this is the case when you're using a freelancer or an independent contractor as well.

And the top thing that most agencies don't realize is that when you're engaging somebody to help you create client deliverables, if they're not your employee then you don't own the rights to the work that they do for you, even after you've paid for it, which is an insult, I know, to many of us. Unless you've got something in writing that says so. And so, it's definitely necessary for every agency to have in their toolkit an independent contractor agreement that includes provisions like IP ownership of the work that the freelancer creates for your agency. Because remember that in most cases you're going to be required to give ownership of that work to your client at some point.

And you can't convey what you don't own. So it's really a chain of title question more than anything else. And also, you want to pay attention to issues like restrictive covenants, confidentiality, addressing the ability to display work in portfolios. And other related issues that are important to nail down with a freelancer. Because your freelancer's going to be stitching together gigs to earn a living, and so they may be working directly with brands in some cases, they may be working with other agencies in your market, and so you want to nail down an understanding relative to those areas of your relationship as well.


Kelly: And then maybe not so much from the legal standpoint but maybe from some other tax implications standpoints. Don't you also have to have some kind of sheet or information from each freelancer or independent consultant with proof of the fact that they are not an employee, they have their own business card, the hours that they work are not predicated based on you know your schedule, like those types of things?


Sharon: Yeah. Well you know there's the IRS specific set of criteria that governs whether somebody is really an independent contractor, versus someone who should be treated like an employee for tax purposes. So it's always good to be cognizant of what those major requirements are. And there are things like, do they have their own independent workspace?

Do they set their own work hours? Do they come and go as they please and is the relationship at will? And one of the factors is, do you have a written agreement with them? Because if you have an arm's length contract with somebody that clearly states they're an independent contractor, that's going to tick off a lot of the boxes as far as the IRS is concerned, about whether or not somebody is treated as an employee versus an independent contractor.

And it's an important distinction, because in many cases these days with agencies, sometimes you're almost embedding these people into your agencies. They're coming to your place of work to meet with clients, you're giving them business cards that have your company's name and logo on them.


Kelly:It's a little slippery slope.


Sharon: It does, and in some cases using titles for them that make them seem like they're part of your leadership team. There are those IRS criteria that are important in every industry to discern whether someone's an independent contractor. And then there are things you want to address in your agreement with them that are more industry-specific.


Kelly: So there is crossover between the legal implications and the IRS and tax implications.


Sharon: Absolutely and getting the legal relationship nailed down appropriately can go a long way towards helping you fulfill what the IRS expects and independent contractor.


Kelly: And I know the last time that we spoke you were telling me that a lot of your work at Legal + Creative really focuses around social influencers, and I know that you guys are very well positioned as a law firm, specifically for creative agencies. So it's interesting to me that you do so much work with social influencers which clearly sets you apart from a lot of other law firms, even law firms that specialize in agencies. Because social influencers is a very, very specific space, right?


Sharon: It is very specific.


Kelly: So what kind of things do agencies need to consider with their relationships with social or digital influencers, in particular?


Sharon: Well the first thing I always say to agencies who want to recommend influencer strategies to their clients is that it's as much about the experience of education of everybody who's in the chain as it is about compliance. And what I mean by that, is most of the time an influencer campaign that goes sideways because it's not complying with the FTC's rules regarding transparency and disclosure is because nobody who was supposed to know the rules knew the rules.

Or had an adequate set of understandings about the rule. So, your first role as an agent: not only should your team be educated, but your client's marketing team needs to be educated. And then they need to make sure that they are working with influencers who also understand the rules of the road. So, the first part of the task is really one of making sure everyone is on the same page, and you get there with communication and education.

The next thing then thereafter that you address is making sure your agreements with both the client and the influencer carry through everybody's understanding about who's going to be monitoring the campaign for compliance, what the basic rules are for being compliant, what the FTC's expectations, and what the process is going to be for sweeping up quickly, because influencer marketing is very viral. It almost exclusively uses social channels and once something's out there, it's out there. So, it's about having well-documented processes for reacting to something that doesn't go well.

And all of this ought to be reflected in your legal toolkit in the form of an influencer or a brand ambassador agreement. Again, I'm not really as hung up on what it's called as I am on what it includes. And do yourself a favor and include a summary of what the FTC requires and make that an exhibit to the agreement. So that somebody has got sort of a cheat sheet to refer to so that they understand what the rules are and how to follow them.


Kelly: That's a great idea, I love that.


Sharon: Use your legal agreements and your documents as business tools. That's the goal at the end of the day, right? To help you minimize your risk, but you can also use them to help people understand how to comply. They're doing double duty for the same amount of work invested.


Kelly: And typically with the social influencers, are the agreements with them typically with the agency, or with the end client or both?


Sharon: I've seen all three situations, or I should say both situations. I've seen them contract directly with the brand where the brand has a relationship. That's particularly true in the case of macro influencers or even some minor celebrities who their brand might be using. I've seen the agency contract directly with the influencers if they're the ones tasked for finding these folks.

And then I've seen three-way agreements between brand, agency, and influencer. So it's typically going to be two out of those three, again to create that chain of relationship between the influencer and the end brand. You know what I can tell you as far as the FTC is concerned, everybody in the chain is responsible.

What we're seeing so far is the FTC looking to brands first, influencers second, and now agencies increasingly. Especially where it's clear that agencies are either being lazy about following the rules or are willfully just disregarding them.


Kelly: So, it sounds like, if all parties would be responsible, it sounds like the direction that those contracts might move in is that it would require all three parties to be included in them, right?


Sharon: Yeah I think so, or that you have mirror agreements that sort of point to one another. I would extend that also to the issue of privacy. Because as privacy laws are tightening up and agencies work on campaigns that are more data specific and involve more personal information, we'll see the liability spread out equally amongst agencies, brands, and a set of influencers, third-party data manipulators or warehouses.


Kelly: Great, so that also probably means that their business insurance is going to go up as well.


Sharon: They do, it will. And so every agency needs to be regularly looking at its insurance portfolio, not only general liability but errors and omissions. And in some cases special writers for influencer stuff and for cyber.


Kelly: Very interesting. Really, really good points there. So as we start to wrap up, can you share with me an example of an agency client, obviously anonymously, but an agency client that you've worked with, where something that you put in place for them from a legal perspective help to mitigate something.

You know some kind of liability that came up, some kind of issue. Is there something that you can point to just to kind of give some context to the work that you do?


Sharon: Well, this is an example of a story that probably didn't start out very happy, but ended up being a learning moment for the agency ultimately,l which will help it down the line. They spent a lot of time putting together--and I'm going to mask some of the details so that I anonymize this as much as possible. Let's say a campaign.

They spent a lot of time putting together a tremendously visual impactful campaign that ultimately incorporated imagery that came---visual and still imagery that came from a lot of different sources. And they thought they were licensing everything and getting permissions appropriately, but they didn't have the work reviewed early on by the client's legal team. And the agency didn't have its legal team look at it either. And they spent almost a year putting the campaign together and right before it was ready to be released said, "Well you know let's call the lawyer and see if we're okay using all this imagery."

And about eighty percent of it was improperly licensed. Either because it was stuff that was not available for use whatsoever, but mostly because they had not properly licensed it, or they thought they had a specific kind of license and it was a different kind of license. So this is an example where first of all, the contract needed to have been clear on the liability for something like this.

Which they probably ticked that box off, but we were able to turn it into a teaching moment by helping them put processes in place for making sure they analyze these licenses every time they got a third party asset and wanted to put it in. This happens all the time. Font, photography, video, code, whatever. And so the teaching moment there was training in putting some minor processes in place that were easy to follow, and that ultimately will save them a lot of time and money in the future, because they'll know what checklists to go to and what process to follow to make sure it doesn't happen again.

Kelly: And thankfully they came to you for that review before actually distributing the campaign because that would that would've been a lot more work for you.


Sharon: It would have been a lot more work for me, but my goal is to help them avoid it in the first place.


Kelly: Absolutely. Well Sharon, this has been really fun. I love the conversation I think there's a ton of value that you're providing to the agency leaders that are listening and watching today. So I really, really appreciate you coming on the show.


Sharon: Thanks Kelly, and I love the work you're doing to help agencies out too, so it's been fun to have the conversation.

Kelly: Thank you.

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EP 30: The Power of Positioning, with David C. Baker

On this episode of THRIVE—sponsored by Workamajig—Kelly and David C. Baker talk about their shared favorite topic: agency positioning. They discuss the holistic foundation and myriad benefits of strong positioning for creatives within the context of David's latest book, The Business of Expertise.



EP 30:The Power of Positioning, with David C. Baker

Duration: 00:17:22


Kelly: Today, we’re talking about the power of positioning and my guest is the man, David C. Baker.

For anyone who is listening and watching and may not know everything that David’s done in his career, he’s an author, speaker, adviser to entrepreneurial creatives worldwide. He’s written five books, advised over nine hundred firms, and keynoted conferences in thirty countries. His work’s been covered in dozens of international publications and his latest work – which is a book that I absolutely loved – is called The Business of Expertise: How Entrepreneurial Experts Convert Insight to Impact and Wealth. You can check that out at David, thank you so much for joining me on Thrive today.


David: Sure, it’s really good to be here. I had to move a couple of things because of the crazy travel schedule. I’m glad it worked out. I’ve been looking forward to chatting with you and your audience.


Kelly: Absolutely. Today we’re talking all about our mutual favorite topic, which is determining market position. For all of the creative agency owners listening, why is it so imperative that we niche down and stop being all things to all people?


David: I think it’s important now. I don’t think it was all that important in the past, but the world has changed around us radically and quickly and we can just say the world has been Google-ized. Now we have access to all the prospects out there that we want, or at least a much larger universe. But our competitors have access to the people that we used to work with, and we were protected geographically, and we’re not.

The world’s expectation around information and expertise is so specific, you could be lying in bed dreaming about one very specific thing, and for a minute you might think, “This is such an esoteric question I have. How in the world would I find somebody that knows exactly what I need and could give me the information free, and could give me the information immediately?” Then you realize, “Oh, there’s this thing called YouTube or Google or whatever.”

That’s why, because nobody wants to pay for the wise person anymore. They want to pay for deep expertise, and they’re comfortable assembling this litany of experts and picking and choosing, and then coming up with a plan on their own. Unless we’re niched that way, we’re just not going to have a very compelling answer in the marketplace.


Kelly: You probably love the term “full service digital agency” as much as I do?


David: Yeah. Full service simply means, “Hey, I’m desperate. Give me a chance…”

I wrote an article one time for communication art years ago. I was in a punchy mood and I knew the editor pretty well, so I added two paragraphs under the article. I knew she would recognize it as a joke and axe them and we would have a good laugh over it. But she didn’t. She actually thought that that was a part of the article.

What I said in the article at the end was, “Prostitutes are better at running their businesses than creatives because the only people who, when they say “full service”, mean it are really prostitutes, and the rest of the people just mean, “Give me a chance. I’ll do it. I’ll figure it out.” Yeah, I don’t like that term at all.


Kelly: I was looking forward to a lively conversation. You’ve already not disappointed in the first three minutes.


David: Right.


Kelly: Let’s talk about this for a second. In terms of translating positioning to all the touch points where we might interact with our prospects, you say, craft your positioning entirely on your strategy and not your execution. Don’t even feature it on your website because it’s interchangeable. This is a huge pain point in the creative world. Everybody has this Chinese menu of services on their website. What’s going on?


David: Maybe it’s because that’s where all their training comes from. Very few of them had any classes on strategy or research and insights or account planning. Almost all of their work was related to a particular craft which we now see as largely implementation. And to move upstream, we have to attach that implementation to strategy, otherwise we’re so far downstream and somebody else has made all those decisions and we’re simply there with a compressed time frame and not much budget left to be the hands people rather than the mind people. I think it’s really tough.

If you think about somebody who is a fantastic coder or an app developer or something like that, they need specific requirements and instructions and guidelines, but they can be really, really good regardless of what the strategy of the project is, and that’s what I mean by it being really interchangeable. I believe that the implementation is something that most clients want and value but they’re not going to pay a premium for it unless it’s attached to a really tight positioning.


Kelly: The other thing that I think of when I look at these websites that have the Chinese menu dropdown, it’s almost like having the clients self-prescribe their own solution and then simple search out a commodity to get it done.


David: Which should be called malpractice in a professional service setting, where you don’t go to a doctor anymore. You go to the pharmacy and say, “I know what’s wrong with me. This is what I need. Do it.” That’s self-prescribing and it’s unethical. It’s immoral, but we allow our clients to do that sometimes because we don’t feel like we can push back. We view these client relationships as sometimes a little bit fragile and have to be handled carefully, and if we push back too much, they’ll go to somebody else. We’re left with this powerless positioning that doesn’t allow us to have the sort of impact and make the sort of money that we could.


Kelly: Actually, that’s a great segue to one of the other things I wanted to talk about, which is one of my favorite credos in the book: is for agency leaders to drop the irrational fear, that to keep a client, you have to meet all of their needs. Do you think that that irrational fear stems from insecurity alone? And how can they move past that if that’s the case?


David: I think it probably is insecurity. I’m not absolutely sure. I know that would be the case for me. I’m thinking back to my dating life, actually. I’ve been married thirty-eight years and I remember how I was just self-destructively nervous and defensive… I wasn’t a good boyfriend at all. I was jealous and that’s where this idea came to me: you shouldn’t be afraid to let your girlfriend – in my case – dance with somebody else at the party. What kind of lame mindset does it take to not let that happen? Somehow that creeps into how we work in firms and, it creates this expanded survey, this Chinese menu that you’re talking about, because we don’t want our clients going somewhere else. We manufacture our ability to do something because we’re afraid they’re going to fall in love with somebody else. So yes, I think the way you phrase it is exactly right. It’s this settled sense inside us that we’re not really sure that we’re that irreplaceable, so we don’t dare let our clients experiment with that.


Kelly: I just had a client recently that went through something similar, and their way of dealing with it was to make sure that they had some type of say in placing a new marketing director at the client’s place. What ended up happening was they got passed over for a much larger development project, which was not in their wheelhouse at all. Now they’re very nervous that the fox is in the hen house.

Let’s go into something else. In the book, you talk about – obviously – this whole thing about expertise; the ultimate control that stems from withholding the expertise, but that it’s only meaningful if your agency is actually difficult to replace. What are your thoughts on ad agencies that have to pitch big brands with creative concepts or campaigns?


David: Where they’re doing that for free before they’re engaged? Yeah, in some cases I think they just feel like it-- never occurs to them that they have an option. They just come to believe that this is how the game is played, so they respond to the cattle call and they show up, they do their thing then they beg to be chosen. It’s really lame. It’s like somebody who’s not good at sports hoping to get chosen for the softball team or something.

It’s dehumanizing, and the reason that these clients can do this to agencies is because they can. Right? Blair Enns talks about that all the time. They do it because they can and we let them continue getting away with it. He’s also done some interesting research that says that your chances of landing those accounts in a cattle call setting are directly related to the degree to which you disrupt the process. If you follow all the rules, you are very unlikely to win that work.


Kelly: That’s interesting.


David: Yeah. You have to say, “You have to spend extra time with me,” or “You have to tell me who else is pitching,” or “You need to give me another week.” Whatever it is, if you don’t disrupt the process, they make it you’re not even worth participating. The reason these agencies do it is because they are largely interchangeable and it’s much more difficult for them to make changes to that.

They may even recognize intellectually that they have a problem with positioning but very few of them have the power to make those changes at the institutional level, because they’re often a part of a holding company or whatever. They also misunderstand positioning because those agencies, their primary value to their clients is the fact that they are large enough to have a deep enough bench to be entrusted with a large project.

 Smaller firms, the ones that you and I typically work with, don’t have that luxury, so positioning for them is even more important and they can’t lean on that. But the truth is, most agencies are not positioned well and most agencies are doing average from a financial standpoint. Those aren’t the people I work with. I work with people – and you do, too, I’m sure – who want to be exceptional. They want to have a little bit more power in the marketplace, not to beat clients over the head, but to make more money, so that they stay interested in this silly business, so that they do better work for their clients and can sleep at night.


Kelly: Do you think everything, at the end of the day, if we really were to boil everything down, do you think it all comes down to positioning?


David: I do, absolutely, because without positioning, you don’t know who your prospects are. You don’t know where to find them. You don’t know what to say to them when you find them, and on and on. You don’t know what they want to buy from you. You don’t even know who to hire to fulfill the promises you’ve made, so I do think it all comes down to positioning.


Kelly: Everyone wants to jump on profitability but I think you can’t even go there until you really get positioning nailed down.


David: Absolutely true.


Kelly: Let’s talk a little bit about the concept that’s quite hard for agency owners to wrap their head around on, and I’m glad you touched upon it in the book. As opportunities increase, agencies should be underbuilding their capacity and having more “no” conversations. Why do these people fight this tendency so much?


David: I think it comes from this cultural infusion we have. We have this genetic disposition to say yes to growth. We feel like being a stable agency that’s not adding nor detracting from body count is making lots of money year every year. That’s just not enough. It requires, to really be successful in our world, you have to be growing. You have to apply for the silly Inc. 5000 awards or something.

If you think back on it, step back from our industry, and you think about this world that we live in – here in North America, anyway – it’s called “the land of opportunity.” If we say no to opportunity, it almost becomes unpatriotic which is really silly. Every time opportunity comes along, we say yes to opportunity, which means that we build out our capacity. In the process, we’re creating this larger and larger machine that we have to feed. If we don’t keep this delta, this difference between our opportunity, our capacity, then we simply don’t ever have the opportunity to say no.

I’m convinced that most bad business decisions come from financial panic, around our positioning, around our people or what we’re going to do with a client or whatever that is, I want to make sure that there’s a difference between those two: opportunity and capacity, so that people will have the comfort to say no. Most of the time that means you just say no to opportunity. Sometimes it means you have to dismiss staff because you don’t have enough opportunity for the people that you have. That’s the painful side of it.


Kelly: When you say under-build capacity, I’m assuming you mean you have a core team – that’s full time employees. You can rely on an elastic team of contractors and things like that.


David: Exactly. Those contractors should be more the skill people, not the folks managing projects and accounts and doing strategy. If you work it that way then it works beautifully. And there are so many fantastic contractors out there these days, a better pool than there ever has been, so it’s quite feasible.


Kelly: So, contract out your execution and your implementation stuff. Keep all the client relationships and everything else in-house. Grow that. At what point, though – yes, you’re underbuilding the capacity, having more note conversations, but let’s say you have a couple of ideal opportunities; these are perfect opportunities for your niche, your fit, your core expertise – what point does an agency owner say, “Now we actually do have to increase capacity.” How do you measure that? How do you have that conversation with your clients?


David: That is a fantastic question and I can answer for you, but we actually switch into another chapter here. Like you said, it’s a perfect opportunity. We’ve looked at it carefully objectively; there’s no problems with it. We have to ask ourselves as agency principals a different question and that’s this: Do I want to step further away from the work and closer to managing people? If I answer that in the affirmative then growth makes really good sense. But if somebody isn’t willing – as they grow – to step towards people and away from doing, then it’s a mistake to grow. To me growth is not bad or good, it’s very neutral. It’s about what you personally want to do, so I think it’s fine. It’s actually really good idea to grow if you’re answering all those questions right.


Kelly: Right, but it’s about putting that checklist in place and really doing some soul-searching to see what you want.


David: Right. I mean, is there any connection between firms that are thriving and their creativity or their intelligence? There’s very little. The connection is between thriving and the quality of their business decisions, around positioning, around people, around services, all those things. That’s the work that you and I and other people do. We try to help them think through all those business decisions that they’re making.


Kelly: Right. Well, for everyone listening, if you have not ordered a copy of The Business of Expertise, go over to David’s got a ton of other resources on that site as well. I will obviously post everything in the show notes. David, thank you so much for your time, this was really, really fun.


David: Oh, Kelly, it was great; really enjoyed chatting with you. Thank you so much for having me on your podcast. I appreciate it.


Kelly: Thank you.

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EP 29: Righting Client Relationships with, Jodi Katz

On this episode of THRIVE—sponsored by Workamajig—Kelly chats with Jodi Katz of Base Beauty Creative Agency about righting a pivotal client relationship and how that changed her view on everything. They dive into mutual accountability, being open to feedback, and being empathetic to one’s underlying needs.




EP 29:Righting Client Relationships, with Jodi Katz

Duration: 00:19:57


Kelly: So welcome to another episode of THRIVE. Now we've all had these client relationships that have kind of taken a turn for the worse and that happens for lots of different reasons, right? So today, we're talking about how to get those challenging client relationships back on track and how that can kind of lead to a little bit of a real awakening in an agency. So my guest today is founder and creative director of Base Beauty Creative Agency, Jodi Katz. Jodi, thank you so much for joining me today.


Jodi:   Well, thank you for having me and for being open to hearing the story of what kind of stinks about our business.


Kelly: We don't have enough time for those stories but yes we’ll pinpoint this one particular one today and this story that you've told me about, it really is one that I think needs to be told. And so, if you want to kind of just give us a little bit of a foundation as to what happened with this packaging design project and we’ll kind of launch into it from there.


Jodi: All right. So it started like the dream situation. I've been working on my networking and met someone who's a really phenomenal woman and she's up on the board of this one particular beauty brand and she made the connection for me with the founder so we start working on a project. This is like an ideal situation right like this is a dream come true.


Kelly: Right.


Jodi:  I meet people. I connect with them. They like me. I like them and they connect me with others. So it started off great, and I was thrilled. And the project was awesome in one respect but completely not ideal than others. It is awesome because it's a high profile brand. They needed a total rebuild on their packaging and they sell in all those kind of beauty specialty places we want to be in. So that was really exciting. The downside was they have literally six working days to do a total reboot of their packaging before they present it to a major retailer.

That's not good in so many ways. But I wasn't seeing the not good part in that moment. I was like oh, I got connected, I want to do a great job. This is the work that we’re meant to be doing. And really, just put an eye on getting the business and not an eye on, well, is this even reasonable, are we going to be setting ourselves or our client for failure because of this ridiculous timeline. So it's like that perfect storm where like there’s all these good stuff or good air, and then there's all this bad stuff, bad air and they clash and they create thunder clouds.


Kelly: So you basically put a ton of pressure on your team by doing that and what you did in that moment like what every agency owner does who really focuses on business development, they get this like dream project and then you’re just like, "We'll figure it out," and even though you know there are red flags you just push them away and ultimately I'm assuming that the project didn't go so well.


Jodi:  No like how do you work with a very limited timeline and have to sort of reinvent everything that the brand's only known, like they’ve only known let’s say blue, and we’re in a position where we might be saying we're throwing away the blue and how do you do that to a founder, a leadership team in such a short amount of time. It's really asking too much of like any human to part with something they'd known for so long, even though they know they need to make a change. 6 days is not enough. So yeah I think I was like, okay we'll just like slide through it and make it happen, and it didn't happen. It was a mess.


Kelly: Okay. And so, can you talk a little bit about how the client sort of reacted and what your perception of that reaction was and just a little bit more about how the emotions kind of bubbled up in the situation.


Jodi: Yeah, it became what you'd expect which is like the us versus them which I think is a very agency thing to happen right there is my team being like, "Well, we're presenting forty thousand options at this point and you're not making a decision." And then the client team just seemed like they were always on top. From our point of view, they seemed completely unhappy and it seemed like they weren’t able to make a decision. So that was from our perspective.

So it was like really messy and I wouldn't say it was ugly or anything. Just messy like why can't we just find the new blue, like why should this be so hard, everybody knows we're not like building mechanicals. This is just for a presentation and albeit, it’s an important presentation but we can always make changes later. So the agency side, my team’s side, they're just super frustrated that they didn’t know how to read the client, they did not know how to anticipate, which I think is our job very often, like think about what the client's going to say before they say and then plan for it. We weren’t able to do that. It was like there's like a screen between us.


Kelly: Right but on the flip side, it also sounds like the client was probably not very good at communicating what their likes and dislikes and what their preferences were or what specifically about what you're presenting wasn't working for them, so that's difficult also. I think that's a huge common problem with agencies.


Jodi: Yeah, like I don't think anyone really knows what they want until they see it, and they see what they don't want. It's such a process for everybody to get to what they want, and I think the work actually in retrospect a lot of it was really great, and we go back to it now looking at it and like pulling from it. So I think it was less about the work. It was more of the emotional pressure that you have to make a decision about something so important to the business.

I think that's like can almost freeze somebody, like affect their ability to even think straight. So I think that would be more overwhelming than the work. We tried every version imaginable, and not that my team-- maybe they weren’t like the most kind and sweet on the phone going to these calls towards the end because they were super frustrated by it. I don't think it was about the work. I think is about the timeline and the pressure that the timeline created.


Kelly: Right. So fast forward a little bit and talk a little bit about the conversation that the client had with you, because that, I think, is the most important part of this discussion. I mean we've all done exactly what you just described but I think the big difference and the reason why this story needs to be told is that there is such a turning point, and I'll kind of let you talk a little bit about that.


Jodi: Right. So basically, like the project happened and ended in six days. The client went off to their meeting presented whatever they presented of,picked  little screen captures of whatever elements they like that we created along the way, and they had their meeting, and everything was fine. Fast forward may a week or two later and my client gave me what I would call like the best-worst phone call I can ever have. So it's like the best version of like how horrible a phone call could ever be. I say that because she was telling us how she was feeling about the process of working with us in a way that was so kind, even though like it wasn't a good experience for her.

So she was really straight up about like, she didn’t like working with my teams, she didn’t think they were collaborative, she thought that they were like dismissive of her requests and her thoughts and ideas. Not cooperative I’d say. And that stinks to hear, and she was right, because there was that like whole like us them thing happened, and it happened quickly, and it really put the project on a sour note, it was like layered on a bunch of like difficulty on top of an already difficult project that we weren't really collaborative, that it became a us/them, and that’s on us.

But the way that my client spoke about it, she was so kind. And this time she was like, "Jodi, I want your business to grow. Jodi I want you to have success. I wanna have success with you and this is what's getting in the way." And she said it to me in a kind way. She didn’t curse at me, she didn’t call me names. She didn't like tear down our work and she said she didn't like working in my team and she didn’t like working specifically with one person but she wasn't like nasty about that person. She's just like, "I don’t like her, we're not meant for each other," which was so generous and kind in telling me with what it was really like on her side of the phone or her side of the screen share to work with my team and that she wants better for me. She wants better for me so I can grow my business, and it was a really difficult thing to hear.

But it was so filled with kindness and generosity in the sense that she wasn't cursing me out and she wasn't like to say I never want to talk to you again, which is certainly happens, like I've had clients telling us, okay we’re never going to work with you again and I’ve had clients that just goes off. I would rather have somebody talk to me about something that is hard to hear so that I can decide for myself. Is this the type of collaborator we want to have in a client or is this something that we're just going to end now and say goodbye.


Kelly: Right. And I think that's where it really where that gift is because it's such a rarity that a client would take the time to say, "I understand that you're kind of heads down, you're doing this work, but here's the perception," or, "here's the experience from the other side, and I think this could help us together." It's not just helping you, she was saying like, "I really want you to grow and I want to maintain our relationship as a client. I do think your work is good. Here's how we can improve together."

And you're right, it is the most rare thing in the world, which is why I think there's got to be sort of one of those little things in the beginning of a project or the beginning of any kind of client relationship, where you really put that stake in the ground to say, "This is two parties working toward a shared vision, and there has to be mutual respect, and there has to be great communication." And that's where we're ultimately going to get to a place where something like you're describing.


Jodi: Right. But this particular client of mine, she’s a very emotionally mature person.


Kelly: Which most people are not.


Jodi: Right. She can do this. She feels comfortable pouring her heart out and speaking from real authenticity not like I'm going to play games. She was speaking out authentically from like her soul. She was speaking with kindness, and she was making herself crystal clear. That is very unusual and very hard for people to do, but that is the type of client that I want to attract. I want to be able to have a hard conversation with somebody and not fear that they're going to be cursing at me or throwing things at me right, which we've all been through. Well no one's thrown something at me, but maybe they've thrown something at the phone. So I want more people like her as a client. This is where our future growth is.


Kelly: So how did that whole situation and that conversation and how you digest it afterwards, how did that change your own perspective about your agency?


Jodi: Well, it helped me so much like it made me to just stop, like it helped me take a pause as opposed to just like rushing into the next thing. I think it actually like turn my mindset into I need to write down what our relationship needs to be with future clients and that's what I did. I worked with my finance director, and it wasn't just money stuff. It was about like protocol, and timely responsiveness, and mutual respect. I wrote down like a whole laundry list. At first, I wrote it in kind of like I am mad, angry and frustrated. But it wasn’t just about this situation. It was sort of there were a lot of walls caving in, kind of at the same time, like there as a lot of opportunities that the universe is presenting to me to learn from all at the same time.


Kelly: Thank you for rephrasing that.


Jodi:  I wrote them all down like I did see whatever moment, whatever I was holding and then I rewrote them in a softer way, that I kind of really want to be in the world. And I said this is the intention like these are the types of people that I want to attract, this is the protocol for working with us. I wrote it down and I shared it with my team. And I think that that shift of mindset really helped me. Also because of this client's conversation with me, I really wanted to do better for them. I think that that was like so amazing to any clients who’s listening to this.

Like this client speaking to me plainly and honestly from her heart made me want to do better for her and I actually ended up investing gratis a lot of time with her seem like to really groom them into, making sure that they can trust us like giving them the sense that we are on their team, because we are. And I want them to succeed. And I told the client team like listen I'm doing all this and not billing you for it, but I just want to see this through and this is many months later now, we're working on bigger projects with much better timelines and much stronger budget so that we can really do the work the right way. And I'm proud of that. But that came from a conversation with my client. It wasn't gonna happen with myself doing it alone.


Kelly: But it was reciprocal, because she gave you this gift of all this information and this knowledge and this experience, and then, reciprocally, you gave her your time investment which ultimately led to a much larger or multiple larger engagements with the same client, so it's just really interesting how a lot of people would say, "Well don't do work for free and don't let clients kind of just beat you up about different things," but there's nuance to all of this.


Jodi: Well, I think in that moment, I needed to prove it to myself like I think in my work I'm looking for clients that I can build a relationship with, and I know that seems like a little like soft or something, but like I really wanted to feel connected with my work and I want to feel connected to the idea of growing brands I believe in. So I'm looking for this sense of connection and I know that I can't find it with everybody. And we have clients who are just like, do this work, do this work.


Kelly: Work production.


Jodi: Yeah, which is fine, but in my heart, the reason I started this business is to feel this connection, to feel like I am part of a company that we're working with. And, I think this is just one of those moments where like I needed my heart to be filled with more than just production. I needed to be feeling like I'm part of a team, because it's very isolating to me in the agency, like a lot of clients really don't give us a seat in the table, even though we're asking for it, "We're saving your money, every dollar you spend with us will go further if you really talk to us let us and let us in."

A lot of cultures don't allow it. So when I do see an opportunity to have a seat at a table and really share expertise, and be a part of that process, I really want to dive right in and that's what I had in front of me at the right time I had this client team who is so fine with me, and then you have this open door basically to a team who really was thirsty for our expertise and advice. So I went for it and I told them we’re going for it, and I'm not charging them for it, and I want to see it through, and then when the next project came up, I said, "Okay so now I'm gonna have to charge for it." But I have gotten to a place where their thinking is more sophisticated, and the projects are going better, and I think it's a win for everybody.


Kelly: Yeah, that's great. So as we’re kind of wrapping up here, the last time we spoke, we talked about the larger issue here. Like this is a very small anecdote, but the larger issue here is that a lot of times as agency leaders, we sort of take our clients, and we bucket them, and we say, "These are the ideal clients, and these are the challenging ones." And we almost like throw the baby out with the bath water a little bit. And so your story for me, what it did was it made me realize that we kind of have to rethink that a little bit, because there's so much opportunity in dealing with more challenging clients. And the opportunity could even just the sort of self-growth or a new level for the agency. So I just want to wrap up and talk a little bit about that stopping bucketing these clients into these like two extremes.


Jodi:   Right, well I mean when I do that, and I do it plenty, it's me assuming a person is not a human right? But that's just wrong, they're not robots right. They're not marketing robots or CEO robots. They’re human beings. And we all have flaws, there is no perfection in the world right? So if I'm bucketing people into these categories, I am taking the humanity out of it, which is like the opposite of what I want to be doing, but I'm longing for the humanity. That's why I'm here.

It's really like, it defeats the purpose of running my business to do that, and I think it's just an easy habit where we bucket everything. Easy job, hard job, profitable job, non-profitable job, sexy job, not sexy job. But I really want to start seeing people in a more human way, which is what I was able to do when the tide turned on this project which is like you like these are people who are thirsty and hungry for our advice and expertise, so I want to give it to them, and no I'm not gonna get paid at this moment for it, but I need to see this through.

So yeah, I mean, I think that I would like to look at people like human beings and not like pieces of meat. I think that is maybe a little easier said than done, but over time I start to think these people are human beings like me, who have other stuff going on their lives. And, because they're not answering the question the way I want them to, or they are not being crystal clear enough, it has nothing to do with me. They’re human. And I think that will help. It'll help everything just be smoother, and easier, and more fun.


Kelly: Right. And some actionable things for that are kind of like just realizing maybe again it's just that pause or that little reflection of things are not black and white. Like you don't know what someone else is going through. So if you have a client that's just a little bit off or just not communicating the way that you would like them to, maybe it's just pausing for a second and realizing that they may be going through something else in their lives. And how could you actually rephrase the questions that you're asking, or like how could you take a little bit more of a holistic approach to be sensitive to things that that they may be going through. And I know that sounds, as agency owners, why do we have to do all this? But the reality is if you want to get to a place where these relationships are really meaningful, and it's not just more money in the bank, that's kind of what you have to do, right?


Jodi:   Yeah, I agree completely. I want this to be fun. I wanted to feel fulfilling. If I wanted like to be a bazillionaire, I wouldn't be doing this, like I would gone into something else. I'm not doing this for the money, I don't know where the money is yet. I'm doing it because I’m good at it and I do believe, ultimately, I have unlimited earning potential, and I just need to ride this wave until I see it.


Kelly: Right. Well Jodi, thank you so much. It’s been a great conversation. I really appreciate you sharing your stories today.


Jodi: Thank you for giving me a voice in this really kind of shitty situation.



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EP 28: Demystifying Agency Profitability with, Ryan Watson

On this episode of THRIVE—sponsored by Workamajig—Kelly demystifies profitability for agencies with guest Ryan Watson, Founder of Upsourced Accounting, a financial firm for creative agencies. They talk about the levers needed to move margin in the right direction, as opposed to focusing on lagging indicators.



EP 28: Demystifying Profitability, with Ryan Watson

Duration: 00:19:23


Kelly: So today we’re talking about demystifying profitability, and my guest today is Ryan Watson, co-founder and partner of Upsourced Accounting, which is really a firm that specializes in accounting for Creative Agencies, Media Tech, etc. Typically in the 1-5 million dollar range, 10-30 employees. But this conversation is going to be really relevant for firms that are smaller than that and much, much larger.

So thanks for being here Ryan I really appreciate it, it’s great to have you on Thrive today.


Ryan:  Thanks for having me, excited to be here! Excited to get into it.


Kelly:  Yeah! So let’s do that. I think that based on previous conversations we’ve had, you and I are definitely in agreement that profitability isn’t one lever, it’s not one of these things that gets wrenched up or wrenched down based on something that you’re doing day-to-day. So it’s really the result of numerous levers that are being pulled and when we talked you had this really great analogy that really stuck with me and I’d love to share that with the audience.


Ryan:  Yeah! And you’re totally right, so obviously I am an accountant I’m a finance person, so profit matters, so it’s not that we as agency owners should ignore profit, but the point is, you can’t manage to profit right? Profit is that there’s this idea of leading and lagging indicators in everything, in life, in the economy, whatever it is. And profit is a lagging indicator, so take the example I gave you which is weight loss.

So, if I want to lose weight, the lagging indicator of weight loss is I step on a scale and it reads out a number and that’s how much I weight right? I want that number to be lower, but that number is the lagging indicator, I can’t just go in a healthy way, just remove the weight and just say, “Hey I just want it to be gone,” right?


Kelly:  Not without surgical intervention.


Ryan:  Not without surgical intervention, which I guess it can be done but that’s not what we’re talking about. So the way to move the lagging indicator is by focusing on the leading indicator, so in weight loss the leading indicator very simply would be calories in and calories out right? So then it’s about thinking, "Ok, from a calories perspective how do I manage the tactics around a good healthy diet? What are the tools I use like my fitness pal to manage some sort of number right?"

Calories out, same thing, how do I, the tactics being developing exercise regimen, pulling in a trainer, using technology like Fitbit or Apple watch to manage the calories burnt, and as you’re managing the leading indicators, the natural result will be the lagging indicator. And that’s the same thing with profit. Profit is the result, it’s the destination, it’s not the journey.


Kelly: Yeah. It’s so funny that you just said that, because we didn’t talk about that and that’s literally the blog post that I wrote a couple of days ago, literally verbatim. That’s awesome! We’re there! And it’s interesting to me. I love this conversation because it’s the thing that most agency owners that I talk to, that’s the thing that they want to focus on. What are your goals and objectives? I want a higher profit margin. Ok, how are we going to get there?


Ryan:  Well, that’s right and you know, we are accountants, financial professionals, that’s traditionally where the agency owners will bring us in. They say, "Ok, I want profit, how do I do that?" And then they’re very surprised that we say, “Ok, well let’s talk about the leading indicators,” which look a whole lot more like operational metrics right?

I’d say, the one thing if I frame this in sort of a financial conversation, a high level profit for an agency is revenue, money in the door, minus expenses. And there’s really only two types of expenses. The first is what’s called like “cost of goods.” This is just what you pay your employees, the cost of actually delivering the work, usually labor. And then the other is just like operating expenses, things you pay on rent, contractors, telemarketing, and that sort of things.

So the revenue minus the labor, the cost of goods, that’s what called Gross Margin. That’s ultimately the money we make on a project before you have to go pay all the other stuff. And ultimately, that’s where all the leading indicators live that really drive the business, so that’s where we focus. We talk a whole lot more on the revenue side, pricing, retention and user acquisition or client acquisition. And on the labor side it ends up looking a whole lot more like utilization, staffing and process. So that’s where we talk about to go to the tactics of those things.


Kelly:  Right, and that’s what I think, when I talk to a lot of agency leaders if they aren’t to the point where they have a controller or a CFO, and they are using some kind of outsourced solution for accounting and things like that, they don’t really think about things in that way, and it’s really interesting that your firm specializes in agencies, because agency world is just rife with so many variables and so many different moving parts, that it’s hard for a financial professional who doesn’t understand the agency world, not that this is a completely unique business model, but there’s a lot to talk about and a lot to think about, a lot to consider, it’s great that you specialize in that you’ve really positioned very well.


Ryan: Totally, and look I’d say generally speaking, ignoring agencies for a second, every business has its own unique complexities, and so you’re going to involve a professional to help you, they can’t possibly be an expert in everything, so they had certainly better be an expert in the thing that you’re doing, and so we found that early on. We specialize not only in compliance and things like that but how do we help an agency owner grow their business, we realize very quickly that couldn’t be as talented with agency owners as with lawyers as with dental offices, you have to specify. Which is no different than the agency owners themselves, agency owners have learned the same thing, you have to have an edge.


Kelly:  Not all of them, but…


Ryan:  Sure, but the ones that are managing their leading indicators around revenue and to set a good pricing like the way to… your biggest lever in driving a higher price, and one that is going to deliver a stronger gross margin is by specializing in delivering expertise, it’s  how you deliver outsize… So I’d say, as I think about just kind of like to talk about it a couple of leading indicators on the revenue side, I’d say one that we talk about a lot with agencies is rate-per-hour.

And don’t mistake me to mean that I’m suggesting that you should charge on an hourly basis, I don’t think you should charge on an hourly basis, but retrospectively determining what is the revenue that I am earning per hour put into that project, is informative of a lot of things. It’s informative of how well you’re utilizing your people, it’s informative on how much pricing power you have, and generally speaking, we try to look for rate-per-hour somewhere between 4 and 5 times the hourly rate of the folks that are actually delivering the work and if you’re able to get that… go ahead.

Kelly:  No I was just going to say so 3 is like break even or just plateauing you’re not making anything.


Ryan:  That’s exactly right. The 3x is exactly kind of plateauing if we can get to 5 we’ve got clients that are above 5. That gives us some flexibility to actually earn a margin and ultimately you know, drive some profit. So that’s an example of an area, that’s a metric that helps us unpack, ok we’re at 3 or we’re at 2.5, now what’s the issue? Is it a utilization problem? Is it a pricing problem? Is it a positioning or retention problem? And that is like the: I have a bad diet, is it late night snacking, is it I’m eating too much on each meal? It’s the same thing, now we can unpack the tactics.


Kelly:  So what would you say are the most common metrics that agency owners or agency people who are in charge of finance in some way, shape, or form at an agency, what are the metrics that they are not looking at that they should be?


Ryan:  Yeah, well, boy. There’s a lot but if I were to just pick the two that I think are the most informative and allow us to ask the next question, I’d go back to rate-per-hour and utilization. If we can get our hands around average revenue per hour into a project, and when I say utilization, again I’m looking at the amount of billable hours divided by the amount of available hours.


Kelly:  Which means that all of those employees have to be tracking their time if you want to even be talking about profitability.


Ryan:  I’m glad you bring that up, because, you know, it’s interesting that agencies are facing the same conversation that accounting firms are, so I have a lot of empathy for this. Which is, we’re all moving towards value pricing and not only pricing, right? So there’s this debate around, if we’re pricing on value, the hours are relevant, shouldn’t track time, that’s a relic of the past. And there’s a lot of our clients who have that mentality and a lot of accounting firms that have that mentality. And whether this is a popular point of view or not, I disagree with that mentality.

Now, I completely agree that it should not drive your price right? The cost is independent of the value and it’s about what value we’re delivering but there’s no way to track the health of the leading indicator without knowing what am I putting into a project? You learn a lot about just overall how am I pricing, you learn a lot about specific offerings, or industries, or niches, or specific clients that may be more or less profitable for a variety of reasons. You just can’t diagnose any of those things if you don’t have the data.


Kelly:  Right. I just had this conversation with an Agency client yesterday, that’s why I brought it up.


Ryan:  Yeah, and I get it, especially in agencies it feels stuffy, it feels processed, it feels uncreative, and I get it. There are great tools that make time tracking as fun as humanly possible, and we recommend a host of them, but you have to have the data I mean there’s a balance.


Kelly:  I do. So if we’re talking about profitability in terms of this rear view metric, what are the metrics that agencies should be paying attention to on the weekly, and the monthly, and maybe even the quarterly basis? Do you have a grouping or one or two things that you typically recommend to your clients that they should be paying attention to on that more frequent basis?


Ryan:  Yeah, so, good question. I mean I would say the metrics that we focus on on the highly frequent basis. So let’s say the weekly or some monthly look like two things. They look more like sales pipeline driven metrics. So we’re talking about like funnel creation, funnel conversion, and they look more like operations. So those metrics are highly customized to the business itself, so depending on the service offering you’re creating, it’s things like timed on board, other operational metrics around the specific service offering. So financially, I guess to kind of bring this back, financially we don’t advocate over-measuring or over-analyzing particular metrics too frequently because reality is they just don’t change that often.


Kelly:  It’s like stepping on the scale every single day.


Ryan:  It’s like stepping on the scale every single day or like checking your portfolio every day, yeah it’s going to move, but it’s noise. Let’s just zoom out for a second, so financially we’ll look at certain things monthly, but generally, it’s more quarterly. And then again, the things that we look at somewhat in addition of the high level, I mention rate prone utilization are very informative.

From there, we’ll look at things like funnel metrics, we’ll look at retention rates, and kind of LTV’s of customers, and the relationship between that and what it costs us to acquire those. So just the idea of the health of bringing a customer in, and how do we grow long term valuable clients, both for profitability, but also to make us sellable, valuable agencies. So those are some of the things that we’ll talk about in addition to, or in conjunction with just basically how am I driving revenue, gross profit and then bottom line profit.


Kelly:  Yeah, that’s awesome. And I love the LTV conversation, because I think it is really important if you spent a little bit more to acquire a client, and you find out through all of these different metrics that it is a pretty profitable client, and you want to get in there, you’ve already landed you want to expand the business with that existing client. Having that metric to look at what this long term lifetime value is, I think is really important, and I don’t think a lot of agencies really focus on that, and I don’t think it’s one of the things that they’re looking at often enough.


Ryan:  No, I totally agree. And I think agencies underestimate the amount of investment that they can make in a long term valuable client. You generally think about on a project basis, so this particular project might come in at 50k, and so look I can only put whatever it is, 5 to 10 to 15k to put into a customer like that, but that customer might be Procter & Gamble, or it might be GE, whatever it is. So if we take the long view, and we invest in how do we use a project to build as a top of the funnel activity, to create a long term either a retainer client or an annuity of projects, such that I now have a 7 figure relationship, well now I can spend an awful lot more time doing account based marketing activities to really get myself into the tentacles of that entity.


Kelly:  So let’s wrap up taking this into that longer term discussion and thinking about it from the agency owners perspective. So most of the agency owners that you and I work with, at some point they want to successfully sell and exit their firm and I often get asked from these agency owners, “What are the things that I need to bolster when I want to start really thinking about acquisition.” Whether that acquisition is 3,5,10 years out, what are the things that the potential acquiring organization are going to want to look at. So where do I need to be to make myself look really valuable and like a good purchase?


Ryan:  Yeah, totally, great question. So I’d say it’s two factors. The factor 1 is just building a sellable business. Operationally, is this something that someone is going to want to come and buy right? Is it a highly differentiated offering? Do you have a specific differentiated offering at a specific differentiated niche? Is it unique? I mean, if I’m selling to WPP or Publicis or whomever, they obviously do a lot of things. So they’re looking for point solutions that do one thing really incredibly well. So what are you in that regard? The other bit is have you built a repeatable business that lives independent of you? I like to ask the question, if you literally didn’t tell your team that you were going on a 3 month vacation and you left tomorrow. Over that 3 months would your business implode? Or would it continue to click along? Would you continue to fill the funnel in roughly the same pace that you had been, and would you deliver on clients the same way? If yes, you got a repeatable business. If no, you don’t, and the value is with you and not with the business.


Kelly:  Which is not sellable.


Ryan:  Which is not sellable right? So it has to be a sellable business, and from a financial perspective, very quickly, it’s really about, it now comes to your lagging indicator, so it does come to profit, what profit margin are you doing and at what growth rate?


Kelly:  What do you typically advice in terms of that healthy profit margin, because you know, different agency growth consultants and different financial consultants will have different answers for this question, so I am curious as to what yours is.


Ryan:  I, yeah, so I will say, first of all, I usually I would advise looking at profit before owner distributions. Because ultimately what is it? It’s irrelevant right? And so I would say, before owner distributions, a really strong agency is between 20-40%, 20 being on the low bar of a really good agency before owner distributions, and we got clients that are in the 40-45 even touch of 50% range, and those are highly differentiated really strong pricing power.

So I would say, that is a great range and then of course, the other half of that is the growth rate. So very quickly, the public companies use this idea of the rule of 40, and the idea is if you added your profit margin to your growth rate in a year, does that number add up to something that is 40 or greater. If it does, you’ve got a really strong combination of growth and profit, and if it doesn’t, well one of those things are lagging. That’s a good rule of thumb to look at.


Kelly:  Awesome take-aways, I think the people who are watching and listening are just going to take so much from this conversation, so I really appreciate all your insights and being here today.


Ryan:  Of course! No, happy to do it. Thanks a lot.


Kelly:  Thanks Ryan.


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