Running an agency is no piece of cake — something our panelists know well. But once you’ve conquered the day-to-day running of one, how do you progress?
Making the decision to scale up can be tricky, and there are a lot of obstacles to contend with. That’s why, on March 18th, 2020, we united a panel of agency veterans to discuss the key turning points and process needed to scale your agency.
Both of our panelists — RicketyRoo’s Blake Denman and Nifty Marketing’s Mike Ramsey — have been through this exact phase and carry the bruises and rewards to show for it. So why not take the opportunity to learn from these priceless experiences and, hopefully, avoid some of the missteps that our panelists might have made along the way?
In this BrightLocal webinar, we cover the key steps along the way to scaling up, including targeting the right customers, scaling up efficiently, how, when, and who to hire, and overcoming obstacles.
P.S. You might notice our webinar panelists are dressed a little, uh, unusually. But, we’ll leave them to explain why at the start of the webinar. Want to skip straight to the juicy content? Jump right in at the 4-minute mark.
Where they started
Once the panelists had finished explaining the intricacies of “dressing to impress”, they jumped straight into talking about current events — acknowledging that, in a time when businesses are talking about scaling back, rather than up, the webinar agenda and SEO landscape was changing right beneath our feet.
Interestingly, each panelist (include host and BrightLocal CEO Myles Anderson) has been running their business for 10 years.
Mike begins by explaining that he started building Nifty just after the housing crash in 2008. He doesn’t gloss over the nitty-gritty details, candidly saying “it was really hard and I wasn’t able to pick up very much business right out of the gate”. But what sparked the success that led to where Nifty is today? Mike shared his newly founded website in the Local SEO Book forum, offering SEO services, pay-per-click, and website design.
“I put it out there and [people] said, you look like everyone else. ‘What do you do that’s different from somebody else in this space?’” Mike claims that this is the piece of feedback that helped Nifty to transition from trying to be everything to everybody, to finding a focus.
So, Mike found the one thing each of his (few) clients were looking for and honed in on that. At the time, it just so happened that everyone was looking to get listed on Google as a business — what we now know as Google My Business.
“I started to put all of my energy and resources into sharing and talking about and studying things happening within this Google Local realm […] which helped to differentiate our company at that time. We became known for local search. And I think without that, we wouldn’t have gotten off the ground”.
Similarly, Blake started his business back in 2009, when the recession was at its height. After being laid off from an agency that had been hit by hard times, Blake decided to brave it on his own. At time, Blake says “I was only doing pay-per-click and I had a couple of clients. 90% of my revenue was coming from one big account”. When that big account eventually left, Blake once again found himself in a “tough place”, as he says.
Blake soon realized he’d need to alter his path if he wanted to achieve his goals. He became more engaged in the community, performed more outreach, and like Mike, began to specialize. Now, Blake works with a team of four people all specializing in local search.
Myles questions how Blake managed to stimulate that growth to get to a point he’s now happy with (and continuing to grow!) His response? “In the past few years, I’ve become a lot more active in the community. I’ve started to speak at conferences — which doesn’t always turn into revenue right off the bat but it’s something I’m investing a lot of time into.” In fact, Blake actually met his largest client to-date at a conference.
Given the current circumstances and challenges facing local businesses and SEOs at this time, it would be amiss not to at least briefly cover the affect coronavirus is currently having.
To begin, Myles asks Mike what —if any — impact he’s seeing on clients right now. “This isn’t the first recession I’ve been through as an agency owner, but this is a very unique one for anybody.”
Opening up about the real effects coronavirus has had on his business, Mike tells the audience that, so far, Nifty has lost approximately $17,000 MRR (monthly recurring revenue). While that’s not a substantial number in relation to the company’s ambitious $5 million revenue goal, it’s still hard-hitting.
Mike mentions that, when he got into the internet marketing business, he thought it would be more or less recession-proof. But, as we’ve seen, nothing seems to be entirely safe in our current scenario. Mike’s lost out on his conference clients, who have been hit hard by the cancelation of public events and large gatherings. Nevertheless, Mike says he feels fortunate that the effects so far are few and far between.
“As marketers, we know that’s so important to continue to market in hard times. And those that find a creative way to do that, will end up coming out ahead. Yet it’s the last thing that people want to do — to spend money on this question mark when they have fear”.
At Nifty, Mike says they’re tackling the situation by working with clients to discover their personal fear. If budgets need to be cut, that’s okay. But it’s about making people feel secure on a personal level, as well as a business one. It’s also important if you can, to provide some goodwill for loyal clients. If they need more support during these tough times, it’s worth weathering the storm to ensure they make it through the other side. Not only is it a good thing to do, but it means your business will likely reap the rewards on the other side of this.
“The most important thing I think you can do as an agency owner is to understand and have your pulse on what reactions your clients are having.”
Similarly, Blake says that the first thing he did when “everything started going south”, was to contact his team and make sure they were in the loop about the current situation — “This is where it’s at, and here’s are runway”.
In terms of Blake’s MRR, he says so far the pandemic has affected around 4.5-5% of it. Again, it’s clients in the events and travel spaces that are feeling the burden right now.
Blake mentions the importance of providing additional support as we continue to navigate these uncharted waters.
Targeting the right customers
Moving onto happier topics, Myles asks Blake how the profile of customers has changed and how you target the “right” customers for your agency. “Typically, we’d discuss that in the initial discovery call”, says Blake. For example, if someone’s really fixated on cost versus goals, that’s not a good sign. Blake also recommends looking out for anything you’d consider a red flag, during those initial conversations you’re having.
“If I feel like it’s going to be a real tug-of-war relationship, then they’re probably not the right fit for us”.
Importantly, it’s good to be in a position where you don’t have to let everybody “through the door”, as it were. Whether or not you can afford to picky, however, really depends on your current personal situation. As Blake says, if bills need to be paid you may not be able to be so selective.
Meanwhile, Mike speaks to the benefits of hiring, saying that his Director of Marketing is very skilled at being able to “sniff out” who’s a good fit for Nifty and who’s not.
Moving onto the topic of sales — something Mike and Blake are both passionate about — Myles asks what sales channels tend to bring in the best quality leads.
In terms of the inbound versus the outbound balance of sales, Mike says Nifty is “almost 100% inbound” at this point. But looking back, Mike can’t pinpoint just one channel that led to quality leads and sales. In a general sense, “sharing information”, whether through blogs or conferences, is what provided Nifty with the best sales opportunities.
Scaling an agency is one thing, but doing it smoothly is a whole other kettle of fish.
Like with many things, Blake says “it depends”. While RicketyRoo has had some bumps along the way, there are also large stretches where everything’s smooth sailing.
One thing that helps the scaling process, Blake says, is documenting processes as you grow — whether that’s writing them up or creating training videos for new hires.
It’s also important to have the right tools and platforms to help you along the way. For example, Blake gives a big shoutout to project management platform Asana: “It’s been a game-changer for us”.
Hiring and training staff
In regards to hiring, Mike says Nifty operates with a couple of different approaches in mind. Depending on the level of seniority, Mike will hire with short-term or long-term goals in mind. So hiring for a senior, project manager position, will take around a years’ time, versus a “doer” or associate-level role which will take just a few months.
Speaking on who to hire, Mike says “The number one thing we hire on is personality”. The reason being that it’s far easier to train someone up in SEO than it is to make someone fit into the existing company culture.
Mike mentions Nifty also used to struggle with the training of staff. Previously, each new hire would spend a month or so learning the ins and outs of their department. As the company has grown, however, Nifty now has a Director of Search, whose main role is more or less to train up these new hires and get them up to speed. This approach, Mike says, leads to a good level of consistency. In contrast, Mike says when they didn’t have specific trainers “it was a little Wild West!” So it’s definitely worth investing in training people thoroughly, as it will save you time in the long run.
On this topic, Myles jumps in to speak of the importance of catering to different employees’ unique learning styles. For example, some people love videos, while some people just want a manual to read.
Making mistakes and getting advice
When scaling an agency, some pitfalls are inevitable. But what’s the biggest? Blake says “relying on too few clients” — something he mentioned happened to him in the past. Otherwise, it would be not keeping your pipeline full.
And even in the stages of success that Mike and Blake are both at now, there still comes a time when you need to reach out for advice. Blake gives a nod to the importance of having a network of friends or colleagues in the same industry. And sometimes you just need to someone to tell you to “Shut up and focus on one thing”, like Blake’s friend did!
Even if you don’t have a network nearby, there’s nothing stopping from you starting a Google Hangout. Especially if you’re a solo entrepreneur, having a community to lean on is vital. Blake also mentions he has a business advisor which really helps him out, too.
On the other hand, Mike sources advice and support from the Agency Con group on Facebook — “that’s the first place I go to [for advice]. Similarly, the group involved with Local U (Joy Hawkins, Mike Blumenthal et al) provide a great place to bounce ideas back and forth. For Mike, “there are certain people for certain issues and there’s probably not someone who can be the master of all things”. So it’s worth having a catalog of resources.
As the webinar comes to an end, Myles questions what Blake and Mike’s biggest headaches are right now. For Mike, it’s “How to continue to attract sales. Always.” Despite having a full pipeline, it’s still an issue you need to continue to solve on a daily basis. As Mike says, “If you don’t solve [that problem], you won’t have any other problems to solve”. He also claims to always be thinking of the best, most efficient way to tackle things.
Blake agrees, “Making sure the pipeline is fresh.” He also recommends looking at projects and timelines with a birds-eye view, so you don’t find yourself overloaded and understaffed.