I am a regular listener of Neil Patel and Eric Siu’s The Marketing School podcast. As of today, these digital marketers and prolific audio publishers are up to 1,848 episodes (WOW!) that cover many of the tactics and strategies that have made their agencies successful.
Each daily show is delivered at wake up and is approximately 3 minutes long. Bite-sized advice. A recent episode “Mistakes That Neil and Eric Made While Growing Their Agencies” (#1842) is worth a listen (link below). Hey, maybe your agency should produce bite-sized vs. those hour-long podcasts. Like my loooong, but entertaining 40 podcast series – Advertising Stories.
Below is my take on their Neil and Eric’stake.
The podcast transcript has been edited for clarity and brevity.
Eric Siu On Leadership and Work Habits:
“… when I first took over (the agency), one of the big mistakes that I made was taking a book too literally called “Let My People Go Surfing”. So some of you might’ve heard this story already, but it’s from the Patagonia co-founder, it’s a great book. And it talks about letting your people go surfing. He lets his people go surfing during lunch, right. Basically, it’s saying people don’t want to be micromanaged, and they don’t. And I went a little too extreme with it and I stopped showing up to the office. So I learned that it’s important, especially in the very beginning, especially when you’re trying to save something, to trust, but verify and also be there in person and be there in the trenches showing that, hey, you’re there and you have some type of vision for the company as well.”
My take. I grew up during the always be in the office days. I was usually the first in when I worked at Saatchi & Saatchi New York and London, definitely when I was the CEO of two digital startups and when I owned my own agency. It was critical that I demonstrated interest and energy – and its good news for me that I have always been a morning person. Sure I know all about the idea of work-life balance, especially when I had two offices in outdoor , fresh-air driven Oregon. But, running an advertising agency, or any business, requires real leadership and dedication. I demonstrated this dedication by showing up. Showing up is especially requiered for client focussed businesses.
Now, how to exhibit this style of leadership in a WFH environment is a bit up for grabs these days. We’ll see where this goes. That said, the last thing I’d do as a leader today is to pump out 6:35 AM emails that ask for an immediate response. That is not effective leadership.
“The other thing is I made a lot of kind of rash decisions without consulting people. And I learned that building actual relationships and building rapport with people and not coming from an arrogant perspective that just because I came from tech I thought that I kind of walked on water, which I didn’t, right. I just thought I was super amazing when really – it takes a village to build something amazing. So that’s what I would say. Don’t take things too literally, build relationships with people and make decisions that are… If they’re reversible, act on them quickly, but if they’re not reversible, you’d probably want to deliberate on them a little more.”
My take: There are a couple of points here. First, yes your agency will work better in a team environment. Even if you are the smartest or most experienced person in the room, don’t act like an ass. If you stop and listen to other people you will generally come out ahead. LOL, most of the time.
Second, it is OK to fail. But, try to do it too too fast and own up to mistakes. That said, repeted faliures are not a good thing.
Neil Patel On Client Concentration:
“I made quite a few mistakes. One of them is high in concentration. It’s better to have a lot of clients paying you something than it is to have a few big clients because you lose a big client or two, it really can hurt you.”
My take: I talk to agencies every week that tell me that a single client accounts for over 50% of their billings. Obviously, high-level client concentration isn’t a good thing. However, I realize that this can happen – and we all like large clients.
But what shouldn’t happen is business development paralysis where the agency does not live and breathe the idea that that wonderful large client can (and probably will eventually) walk out the back door one day. Every agency must concentrate on running a smart, efficient 24/7 business development program as if they are about to lose that BIG client.
You know what, and I am sure of this, that fantastic client will eventually leave you.
“The second thing I learned is you need to close the right clients. It’s not just about bringing in revenue. Churn really hurts morale, it hurts growth. It’s better to have the right companies that you can continually upsell and grow into.”
My take: Advertising agencies need to know exactly what kind of clients they want and why. Don’t take any client that knocks on the door. Period.
Go ahead and read my The Levitan Pitch. book. It lays out how to determine what clients to pitch & who not to pitch.
“And then another thing that I ended up learning is you can’t just hire anyone to work at an agency. Ideally, hire people who have done it before because they’ll come with a lot of experience and then they’ll save you a lot of headaches. So I learned that one kind of the hard way.”
My take: I will partially agree with Neil. There are key positions, especially in digital agencies, where bringing in existing expert skill sets will help the agency move faster and better. However, I also believed as an agency leader that I could teach skills – but not smarts. When a smart, enrgetic and articulate candidate showed up for, lets say an account management position, I thought that I could teach that skill. In many cases that worked out vs. just hiring an AE with a couple of years of experience. Experience isn’t everything.
Neil Patel On Business Development:
“Another thing that I ended up learning throughout the whole process doing agency stuff is it’s hard to get customers. You have to figure out different ways to get customers. And I thought that blogging is the best way and inbound. What I actually learned through my current agency, NP Digital, the best way to grow is through word of mouth, even if you’re in marketing. And then another great way to grow is Forrester, which is hard to get into and expensive.”
My take: I tell the story that when I was tapped to run business development at Saatchi & Saatchi I called up Jon Bond, who was Co-Founder and CEO of Kirshenbaum Bond and Partners (KBP) and asked him what worked at his successful New York agency. He told me that he was never sure what would work so he tried everything. Note that this was pre digital marketing and endless piles of anayltics.
Well, I still laugh at that advice becasue it is partially true. Sometimes you never know what works best. However, in todays massivley competitive environment when new business programs can eat up huge time and cash, it is imperitive that you be focussed on a limited number of key programs. I say KISS all the time. While I have been a big fan of inbound, inbound has becomme increasingly ineffective. Right now, I am a fan of:
- Highly focussed account based marketing. Know who your next clients will (should) be, and why they will love to hear from you. The right client will pay atention – over time.
- Making sure that you agency and its outbound messaging is unignorable. Too many advertising agencies, their positiong and messaging are way too Me-Too.
- Going for borrowed interest and audience. Why not be a guest on other people’s podcasts (I’ve been on over 30)? Keynote at the right industry conference. Or write for well-read pubs like when I wrote for HubSpot? Ya know, their audience was way larger than mine – an understatement.
- Having a referals strategy and growing your WOM. Passivity sucks.
Eric Siu On Being A Focussed Expert:
‘What I would also say too is if you’re just starting out, an element of focus is important. Trying to do too many things at once – saying I do social media, I do paid media, I do SEO, I do email, I do everything. While you might be really good at all of them, the fact of the matter is it’s pretty confusing if you’re just starting out and you have a handful of contractors. So focus, try to get one service line down first before you think about expanding. And it is important to expand long-term because you want the clients to be stickier.
The last big one from my end is to focus on a specific industry if you’re going to start off. So if you’re going to do SEO, do SEO just for e-commerce or just for B2B. Or social media, just do social media for e-commerce or B2B. And then again, you do need to expand, but pick a big niche and you’ll find, and what you’ll find it’s going to be way easier to close more clients and you’re going to have a much higher closing rate.”
My take: Couldn’t agree more. Clients are looking for expertise. Your expertise will help to close new clients faster, increase your margins, and will keep those clients longer. The types of expertise that clients are looking for:
- Skill-based (branding, media planning, social media, SEM)
- Business category-based (as in, hospitality, health care)
- Business market-based (B2C; B2B)
- Demographic-based (Gen-X; Seniors)
- Location-based (Chicago, the deep South)
- Strategic-based (data analysis, research, insights)
- Creative genius (elegant problem solvers)
- Hmmm… and a bit of a but here………. Full-service or Integrated (“We can do it all”) can be included in the above positions as, for example, in an integrated B2B specialist. Many clients are not looking to hire multiple agencies and would like one smart and a good one to do it all. But, experts still rule.
Eric Siu: On Buying An Agency
“And the other thing I’ll say, and this is for more advanced down the road, is if there are certain capabilities that you don’t have and certain clients that you don’t have, you might be able to think about acquiring down the road, right. So it might be cost-beneficial for you to acquire a company that has the talent that you need, that has the right client base, and has a good referral base as well (as in reputation). So this is a scenario where you can kind of fast forward your growth.”
My take: I have bought and sold three advertising agencies. There is no question that purchasing the right advertising agency can deliver accelrated growth. Years ago I bought a small Portland design firm that added really smart design talent and… lots of long-term Nike business.
Later… the agency that bought my Citrus agency got great staff and clients including Harrah’s, Montana Lottery, Nike (!), the huge Providence Health and Services and other cool profitable clients.
I’ve written and talked about how to buy and sell agencies right here.
OK, nuf. My best advice – listen to Marketing School and follow Neil Patel and Eric Siu.
And read my blog posts. This is number 799.