Episode 033 – Find and Fix Common Agency Pain Points with Karl Sakas

Tabitha Thomas 4:13
Hey everybody and welcome to another episode of Digital Agency Insiders Podcast. This is a podcast that gives you a little inside look into how entrepreneurs grew and built their digital marketing agencies. I am your host Tabitha Thomas and if this is your first time listening to the podcast, can I just encourage you to go over and hit that subscribe button because we release new podcasts each and every Tuesday with brand new agency owners talking about the ins and outs of what it takes to start an agency or what it takes to grow that agency over the years and how to sustain it during times of chaos like we are going through right now in this COVID mess. So today I have with me Karl Sakas. He’s the founder of Sakas and Company. Karl is a world-renowned agency consultant specializing in businesses growing pains. He’s been an agency operations director. And he’s written two books and over 300 articles on a wide array of topics in the marketing and agency management world. He’s worked with fast-growing agencies on almost every continent. Suffice it to say he knows his stuff. Karl, welcome to the show.

Karl Sakas 5:17
Tabitha, thank you. Great to be here.

Tabitha Thomas 5:19
I love it. Love the intro there. And you’ve been quoted as saying before that you’ve known the difference between revenue and profits, and since you were 11. So, so have you always been interested in business? Is it something you always knew you wanted to do?

Karl Sakas 5:36
Yes, yes. And of course, it makes more sense looking back now, but, you know, this is my third business since high school Sakas and Company is I started as a freelance web designer in high school, I learned HTML back in the days of dial-up and started building websites. My first client actually was a small agency. So you know, funny how it works out, but you know, 11 now you know, that was before High School. So you know, most recently before starting my agency consulting, training and coaching business, I, you know, worked at in agencies in operations. So project manager, director of client services, director of operations, doing all the stuff the owners didn’t really want to do, you know, that that had to happen. But before that, I started the work doing web design, but even before that, both of my parents were career army officers, and after they retired, they started a small real estate related business, rental property management, and they put the kids to work starting in elementary school. It turns out if you’re running a family business, child labor laws don’t apply. You get some sort of exemption.

Tabitha Thomas 6:47
I had the same thing. My parents owned a business. If I could push a broom or into the trash can I had a job.

Karl Sakas 6:52
Well, I was involved in cleaning, so like tenant turnover, you know, one tenant moved out, a new tenant moved in, put the kids to work. You know, helping out build character, I think they said in later years, so, you know, I would see their work, I would see them negotiating with tenants negotiating with vendors, you know, figuring out, you know, what’s the right balance, you know, and talking about business. And if you look back even further, one of my grandfather’s was a business professor for 40 some years. So I hear his story is about, you know, flying around the world consulting with big companies, you know, GE, Nestle, Caterpillar, that kind of thing about improving their employee productivity and how they work with their employees. So business really, you know, in a sense, this particular business, I think, is a company I started in 2013. But it’s it’s almost like I’m doing what I was born to do. I’ve created my dream situation.

Tabitha Thomas 7:45
It sounds like it’s a little bit bred into your DNA. And, and I’m so glad to hear that that parents that own businesses are having their children help them because I’m one of those kids too. I think it really has helped me have a good work ethic like I know what it means to work and to build relationships with people. So it sounds like your story is very similar.

Karl Sakas 8:08
Exactly, even if maybe the kids don’t appreciate it at the time.

Tabitha Thomas 8:11
Oh, and they don’t. They never do. It’s child labor in those moments.

Karl Sakas 8:14
Yeah. Well, and you know, surely in my work with agency owners and leaders, most don’t have that degree of business background and that’s okay. Like, you know, thinking about, you know, are you born with it? Or, you know, is it nature or nurture? You don’t have to have, you know, decades of business experience before starting your agency. You know, you can make better choices along the way. But in general, you know, I’m a fan of learning from others’ mistakes rather than making them all yourself. You will certainly make plenty of mistakes. But, you know, for instance, I did a session recently for students at my high school I went to a STEM-magnet school so science, technology, engineering, math. You know, more on the technology side for me. And, you know, students were saying, you know, I’ll be graduating in a year graduate in a couple of years and of course, go off to college. But you know, I want to start my own business. What do you recommend? And one of the key things is work for at least one other business work for a couple. So you can learn from their mistakes rather than making the mistakes yourself.

Tabitha Thomas 9:19
Yes, yes. So much yes. Go in and get a little bit of a board there of what you want to do in your own agency. So you mentioned that you had a couple of businesses before Sakas and Company. So what led you to start Sakas and Company?

Well, I was working at an agency at the time I worked for one agency and then for another, and as the head of operations, I realized there was this opportunity. You know, as I thought about the agency owners, the owners of the two agencies I’d worked with were five owners altogether. At the first one had started in design. Another person was interested in SEO and marketing strategy. In other words, interest in development. The second agency was marketing strategy and development. And I noticed that people start agencies cause they love the work, you know, maybe they love design, maybe development, maybe strategy, something else, you know, and often they end up bringing in say other freelancers to help them along the way. And suddenly, before they know it, they have an accidental agency. And, you know, now instead of being in Photoshop or Illustrator or the development environment all day, now they’re running a business, you know, they’re ordering the toilet paper or making sure that someone ordered the toilet paper, you know, hopefully as you delegate that as you grow, and so people were often in over their head, you know, and, you know, realizing since then, when you’re an agency owner, you often don’t have anyone you can talk to. And so I decided to put all that experience together that experience as the number two to the agency owners, with agency operations as a focus that experienced doing consulting and digital marketing since I was in high school was the family background in terms of leadership and, and things like that, I decided to put that all together in 2013. I actually pitched my then boss on becoming my first client. I sent her a two-page proposal, it was all about how she benefited from this with one bullet about how I would benefit. And our only question was, when do you want to when you want to make the transition happen?

Wow, sold yourself out of a job. That’s awesome.

You know, and, and, you know, everyone has different ways they get started. But you know, you have to build the business what’s right for you and within agencies and from the agency model. You know, there all kinds of options.

Yeah. So working with those other two agencies. What are some of the things that you built up as a knowledge base that you took into the new agency? What were the things that you were looking for to pull out?

Yeah. Well, a few things. One, of course, was just the technical knowledge, right of managing projects, doing finances, interacting with clients, you know, my, my client service experiences back to when I was 15 years old, right, you know, as a web designer. But you know, one of the key things around getting experience from different businesses, you see a different perspective on things. For instance, at one agency, our policy was not to charge for client service. So the idea was that if a client called, they wouldn’t have to worry about getting charged for it, which is good. In theory, the challenge is, if you’ve got a particularly needy client, they’re not paying for it. There’s no incentive for them to, you know, get things kind of coordinated. At the second agency, everything was billed as project management for that type of work. But, you know, in that case, you know, account management was bundled into that. Also, differences in terms of just the size of engagement. At the first agency typical engagements were maybe 8 to $20,000, you know, retainers were larger. The second agency or minimum for a project was $75,000. And as a PM, I was managing projects that were typically $100,000 or more. And so, you know, it was seeing a different scale of things. You know, sometimes when agency owners reach out and they want feedback on pricing, and if we dig in on price, and they’re like, well, I’m charging this much, from their perspective that that might seem normal. But you know, in my case, I’ve seen pricing at hundreds of different agencies. I have an idea of like, does that seem high or low, you know, or not. And that, of course, depends on your client base. But, you know, thinking about it, looking at pricing, looking at how you structure projects, looking at how you build the teams, you know, pulling in different perspective there.

I like it. I like it. So now that you’ve, you’ve had your agency and you’ve worked with a wide range of agency owners, you’re talking about the different price range and things. Are there common traits that you find in agency owners like you can just pinpoint like this your X, Y, and Z?

Yeah, well, you know, everyone’s different. But I have certain models and frameworks I’ve built to help sort out everyone’s individual circumstances to help advise them better. So for instance, one of the key questions is where are people going with their agency? And often I’ll ask people that haven’t thought about it yet. And one of the models I use I think of it in terms of your, your overall trajectory. Do you lean toward running a lifestyle agency or toward running an equity agency, and lifestyle goal is to make a great income, great profit margins, your goal isn’t to sell the agency, the goal is to keep running it for the foreseeable future. On the equity side, and this is a continuum. Most people are somewhere in the middle, they’ll lean one way or the other. They lean toward equity. Their goal is to grow and sell the agency. They’re not planning to keep running it forever or for the foreseeable future. And of course, people will say things like, Well, you know, I want to grow and sell but I don’t want to work 100 hours a week or I’m not planning to sell but if someone showed up with one agency owner said, a dump truck full of cash I would sell. Now I have to say, you know, I’ve helped clients on both sides of exits, if that’s their goal. No one has been paid in a dump truck full of cash. I did live in New Jersey for five years and I heard about the dump trucks full of cash but I think you know, if these were say, you know, mafia connected dump trucks, there were some strings attached. You know, but for instance, knowing which way people lean, do you lean more toward equity. Do you lean more on a lifestyle that helps me customize. So everyone has their own perspective, but they’re going to be somewhere on that continuum. So knowing that is helpful. You know, other challenges are that people often are sucked into all of the day to day activities of running the agency. Now, when you get started, that it’s totally normal, you know, when it’s you and a partner maybe you and a few other people, it’s normal to be doing a bit of everything. There are six different agency roles that I’ve identified, different categories. But you know, when you get started, you’re doing a bit of everything. As you grow, though, you probably don’t want to keep doing everything now, as a consultant to agencies, I enjoy working with clients. So, you know, I don’t see that going away. I’m not trying to eliminate clients from my life. But you know, in terms of agency owners, often they’re thinking, you know, how do I get the day to day project management? You know, off my plate. What about the day today, account management being the contact for everything? What a lot of agency owners will say as they move further in their business-like in the first, the first couple years, you’re going to be doing a bit of everything but say your two years in you’re still doing everything? You’re like, how do I get this off my plate?

Yeah, cause you can’t grow if you’re still doing everything yourself. There’s no room for growth there.

I led a couple of workshops at the SoDA Academy. I mean, that used to be the Society of Digital Agencies in New York, and I was talking about leadership and agency team management. And one of the guests in the audience mentioned, you know, if you feel like you need to be the answer person like you need to be the one at the agency is the owner with all the answers. You’re not going to grow beyond 10 people. And you know, what, you don’t have to grow beyond 10 people. I mean, I don’t want to grow my business beyond 10 people, you know.

That goes back to the lifestyle agency. That’s what you want. That’s great. Let’s talk about that in that form. Yeah.

But if you want to go beyond so, you know, in my, in my advising, I’ve advised agencies anywhere from people just getting started who has as many as 700 employees, most of my clients are under 100. But you know, of course, things are different with 100 people versus 5 people. But regardless of where you are, if you want to grow, or and if you want to extract yourself from day to day, you’re going to need fine, need to find ways to do that. One model I think of is sort of shorthand. You could call it the Don or Donna Draper thinking, you know from the show Mad Men, that is the owner says, I want to do sales and I want to do client strategy. And that’s it. But thinking about Don Draper on Mad Men on the show, you know he would make the sale you know later he would swoop in for the presentation of things and then he would leave he would not be involved in figuring out all the details. He would not be involved in, you know, scheduling the meeting and scheduling the follow-ups during the meeting. That’s what the account team did and traffic. So a lot of owners want what I would shorthand as the Don or Donna Draper. So that’s a common situation. And there are certain stages to get there. You know, it’s not an all at once kind of thing. When I do coaching with clients, it takes about 18 months to go from where you are today to make yourself increasingly optional if you’re trying to do it. It depends on your team. It’s not an overnight thing. I think I have an article about – How do you become a strategy first agency. And I describe it as something like 17 not so easy steps.

Not so easy. Understatement of the year right there, right?

Yes. And indeed, that’s the unique thing about my approach, which is customizing it to each client’s, I call it your values, goals, and resources. Your VGR. Rather than saying, you know, here’s the one playbook for running your agency for everything or like, here’s the one way to do everything. You know, instead, it’s I want to customize things to each agency, whether you know, it’s consulting or coaching or if I’m doing training, I’m talking about different things to keep in mind, you know, do you lean toward lifestyle or toward equity? There’s not one silver bullet for everything.

So true. So, so, so true. So how, how are you getting in front of your potential clients in the first place and what is their big what’s their big pain point and the reason that they’re coming to you, are they searching for you or are you going out finding them?

Typically my clients find me first. I have very little outbound work. I actually have a strategy for it. I described the strategy as inbound branding, there are three parts, specialize, and this is one that agencies can use to and choose specialize. So I only work with agencies, typically digital agencies that are independently owned under 100 people. So specialize: share fault leadership marketing, so I do blogging or the hundreds of blog posts on my article or articles on my website. I have other articles elsewhere, as well as guest posts and so on. Podcast appearances, you know, here we are. Having written a couple of books course have more, more in the queue, things like that, you know, to help share free advice, you know, high-value advice. I want people at the end of reading an article to think okay, I can do this. You know, it’s not just here’s what you could do. It’s a how-to, on how to actually get there. You know, there’s some concepts but more of it’s in my work is how to. And then you know, you’ve got specialized thought leadership and then importantly, marketing automation. If someone finds your blog post or they find your information, they hear you speak, how do you make it easy for them to hear more about you and get more valuable advice. And of course, the simplest version would be an email newsletter. But of course, you can go beyond that from the market automation perspective. So, you know, I’d recommend that for agencies as well. But yet people find me someone might reach out and say, I heard you speak at such and such two years ago. I’ve been getting your emails ever since I finally need help. Can you help me? And in that case, you know, if agency owners or future agency owners are listening and they’re like, Wow, that sounds great. It is not an overnight thing. When I launched my website in 2013. I launched it with two things. A contact page so people could get in touch and a blog so that Google would start indexing things immediately. You know, it’s not an overnight thing. But you know, there’s the joke about, when’s the best time to plant a tree? You know, the best time is 20 years ago. The best time is today. you know, so if you’re not doing content marketing today, get the plan together. I have a lot of free articles about it on my website about getting started, including how to reboot the process. I’m actually working on an upcoming training about using content marketing for your own lead gen. If you recall the situation several years ago, where, you know, there were the dropped call issues with the latest iPhone at the time. And Steve Jobs basically said you’re doing it wrong. Right, you know, hold the phone this way. Not that way. It was a little silly, right, like surely the phone would have been designed so you don’t have to hold it in an exact way to avoid dropping the calls but if agencies are thinking, well, I’ve done content marketing before and it hasn’t worked. You may need to shift how you’re doing it. And, you know, in the training, I’ll be sharing about that. So yeah people tend to find me. Um, it is worth considering that there’s only so much you can outsource on your own marketing. You know, a lot of agents who struggle with the shoemaker’s kids problem, right? If you know, they’re doing marketing, or they’re doing design or development for their clients, and they’re not doing it for themselves. No one’s gonna make you do it. But if you don’t do it, you will pay the consequences. You know, if you’ve been focused on business through referral, referrals are great, right, and referrals from your network or from current clients. But you probably will struggle to grow solely on referrals. Often I’ll hear agency owners reach out and say, you know, I’ve been growing so far due to referrals, but it seems like that’s drying up, my network is drying up. Sometimes that’s a year into the business. Sometimes it’s two sometimes it could be five, but eventually, it runs out. And it’s a lot easier if you were doing ongoing marketing along the way. So that you weren’t solely dependent on the referrals. So I guess questions on …

Gotcha. So when they come to you, what is their biggest pain point when they do come to find your agency? What is it that they’re trying to accomplish by hiring you?

A few things. One that I’ll hear is it feels like we’ve hit a plateau, we’ve hit a growth plateau, we can’t get beyond 500,000 a year, we can’t get beyond 1 million a year could be a higher number as well. So that’s often a challenge where people have been at a plateau for several years. Another challenge is how do you get out of your day today? You know, how do you get out of being the client contact because you know, your legacy clients, the ones you’ve worked with since you got started they only want to talk to you. So how do you send that off to someone else? I will say the bad news is it’s going to be hard to handle off those legacy clients, but you know what? Start by handing off your new clients. So the new clients start with someone else on your team, maybe you make the sale. And when you do the proposal, you’re like, here’s someone, so they will be your account manager, they will be taking great care of you. Maybe you’re still involved in some of the strategy work, but not day today. You need to position that at the beginning of the client relationship, not making clients think that they’re going to talk to you all the time. I provide that in my consulting work where if you’re doing executive coaching, you get emergency support at no additional charge. So you have an emergency key employee quits key client weaves, something else happens, you know, part of the framework is texting or calling me and I will get back to as quickly as possible. It might be a few hours, my record is five minutes. I got the text. I had an internal meeting, I stopped the internal meeting. And within five minutes again, that was the record. That’s not the norm. I was on the phone with the client talking them through the crisis. Yeah, I have clients who call me their agency therapist. I do clarify, I’m not an actual therapist, you probably should have an actual therapist, but I can help you with your agency. And indeed, you know, thinking about categories, right? Hitting a plateau or sucked into day to day you can’t get out. Another one is just looking for a sounding board. especially true if you’re the sole owner of your agency. You know, I’ve some info on my site about you know, is your, you know, your spouse or your romantic partner tired of hearing you complain about the agency? Maybe it’s time to get a coach.

That’s so true. Yes. Because the agencies that I’ve worked with before have been husband and wife that worked together and that’s working with family is difficult as you know, working, you know, with your family, in the past businesses, it’s difficult, difficult having somebody else outside is good.

Absolutely. I do clarify. I’m not a marriage counselor. You know, my focus is on agency business advice, personal advice, I learned the hard way not to give clients personal advice at a client in Australia several years ago, where he had hired his wife to do accounting part-time in the agency. She was not very good at it. Like at one point, the bank didn’t send new credit cards or credit cards expired. And they were a couple of weeks without credit cards, because, you know, the glitch, and she was monitoring and this and that. So then a few months later, he said, You know, my wife wants to go full time. What do you think I should do? And I’m thinking, not a good idea. But you know, I’m more diplomatic. I said, based on your agency size, you don’t need a full-time accounting person, and from what you’ve shared about your wife before, why would you expand? Like if you weren’t married to her, you would have fired her already. Like, I’m just thinking this is gonna make it worse. And he said, Well, but she won’t be happy. If I don’t make her full-time. That’s why you don’t hire family members. So this was my one mistake about, you know, giving the personal advice. So I’d mentioned from my own experience – dating – I, you know, I said I, you know, I was trying something called the state of the relationship meeting. It’s like a business meeting for the relationship every six weeks, got a Google Doc shared agenda, as they talk through any concerns, talked through future planning, things like that. I said, you know, I’m thinking they need to talk. You might want to try it. I don’t know, let me know how it goes. They had a vacation coming up from Australia, they’re gonna go to Hawaii with their fairly, fairly newborn or infant son. And I checked in with the agency owner after you know after they were going to have the chat and the vacation. And I asked How did it go? And he said, Well, not well. No, what happened like the state of the relationship, he said, Well, the morning before we were going to have the state of the relationship meeting, we had an argument, and she went to Hawaii with our son without me.

Whoa. That’s not how – I was like you don’t have those conversations on vacation. That’s the wrong thing to do.

No. Well, they were going to have it before the vacation. And then she started the vacation early without him. Yeah, yeah. So don’t hire your family members. If you’re thinking about it, don’t do it. It can work. It can work.

But you have to have very clear communications and expectations laid out on the table in the beginning and throughout the relationship.

Absolutely, including what I describe as swim lanes, you know, swim lanes are useful for any agency role, but basically, who’s in charge of what and especially true if you’re married or in a relationship with your business partner, who’s in charge of what and if it’s in their area, you can share input, but you will not question their decisions. They are the one who decides in that area. And vice versa. They shouldn’t be questioning your decisions. If it’s in your area.

I’ve worked with my brother’s company, his agency for years and years. And I always said I’d have my hats. I’m like, I’d come in and be like, Okay, my sister hat is on. Talk to me like, you’re like, you’re my brother or Okay, I’m here as an employee, you know, I would always have to say I’m switching hats now.

So it sounds like you know, you had good boundaries on that.

Oh, very good boundaries.

Karl Sakas 30:17
You know, for people listening. If you have good boundaries with your family member, you could consider it. But you are likely to regret it. Given my experience with hundreds of agency owners.

Tabitha Thomas 30:33
It takes a lot of work to make it work. So when you have – agencies come to you, how does that first meeting go? Where you’re trying to, I’m assuming is trying to dissect what the real issues or what they perceive the problems to be and what the real problems are?

Karl Sakas 30:51
Yeah. Well, so I’ll do an exploratory call, which is a free call to dig into sort out is, is it a match, but there’s actually an important step I do before that, and for people listening, I would recommend doing it too. It’s the idea of doing a pre-sales or pre-intake questionnaire. So this is a survey that people fill out before getting on the phone. It doesn’t have to be enormously complex, you know, mine has eight questions in it. It’s asking things like, you know, how did you get started? And how is it turned out compared to what you thought things would happen with your agency. You know, if you were to wave a magic wand, what’s different one year from now, what’s different five years from now? This helps me understand where they’ve been, how things are going, and where they want to go. Also asking you know, if you’ve worked with an agency consultant, coach or other advisors before, what did you like and not like about that relationship? And you know, other things to dig into what people are expecting. You know, also sharing some info about here are the three wide ranges budget-wise for help and you know, certain things are custom other things aren’t. Do you have a budget in mind that you’re trying to hit, you know, because I can do things for a wide range of budgets, but it helps to know roughly where people are coming from. So based on that pre-intake questionnaire, I usually have an 80% idea of whether someone’s a match or not. I’ll have some clarifying questions. For instance, someone might say in a year they want to grow. Well, okay, how much right? You know, if the goal is to grow 30% in a year, that’s doable. If you were the agency owner in, in Montreal, who said he wanted to grow five x in one year, while also retaining all of his team and having you know, great team morale and employee retention. That’s not gonna work, you know, that is unrealistic. So it helps me get an idea of what people’s expectations are, and I can sort out, Can I help them? On the other hand, if you’re saying, for instance, your goal, your goal is to, you know, triple your agency size in three years. Okay, that’s doable. If you’re going to triple in one year, that’s going to be tough. And it depends on your starting point, of course. But you know, that helps. So then in the call instead of asking all of those background questions of, you know, well, how did you get started? And how are things going and this and that, I could say, you know, you mentioned you wanted to grow, could you tell me more about what is the baseline, or it might be, for instance, increasing your profit margins, my benchmark for each of the profit margins is aftermarket rate owner compensation that is six-figure compensation. And, you know, reasonable team staffing and all your net profit margins will be 20 to 30 percent. So if someone is saying, you know, I want to increase my profit margins, it’s like, Well, okay, where are you now? If you’re at 5%, we can get you to 20%. We’re not going to get you overnight from 5 to 30 percent. On the other hand, remember the guy in Australia with a surprise vacation to Hawaii. When he initially reached out he said my net margins are 65%. I’m thinking, hmm, that that seems high, there’s something amiss. Sure enough, those were actually his margins. But he was enormously understaffed. He was trying to do all the work himself. So once he brought in additional team members, his net margins dropped within the 20 to 30 percent range. And he was no longer overworked. So, you know, if your net margins are already 30%, and you want to go up, I’m probably not going to be able to help you do that. You know, and there are certain circumstances where you might but basically want to know we’re getting in, you know, what I’m getting into. And you know, what, if you think of asking on your pre-intake survey, you know, if you’ve worked with agencies before, what did you like, and not like about that experience? Well, you know, if, if the prospective client has never worked with an agency before, you’re going to have to train them on what it’s like to be an agency client. And, you know, when you’re onboarding process you need to train them on what it’s like to be your client, you know, because they might have you know, some bad habits or bad experiences. But you also want to get a sense of, you know, what was it like, for instance, as an agency project manager, and then as a director of plan services, we had a client who would work with an agency before, and it hadn’t gone smoothly, and they had some bad things to say about the other agency. What emerged in working with them was that the common factor in the bad client relationship was them, the individual agency. So you know, you want to get an idea of that the way my accountant handles that, by the way, if someone is, you know, moving over to her for business, accounting, and HR services, she’ll ask, you know, in our work, I’ll need to get copies of your old accounting files and documents and things like that, you know, as part of the transition. Do you foresee any problems with me getting copies of that from your current accountant or accounting firm? If the answer is Yeah, you might have some problems getting things. She assumes they stopped paying the other firm, and that’s why they’re leaving the other firm, and she probably does not want to work with them. So find the questions that will help you suss things out. So do the pre-intake, do the exploratory call, usually by the end of the exploratory call, which is mostly getting a feel for is this a personality match? Is it a content match? You know, asking the clarifying questions, answering the prospective client’s questions about what it would be like to work together, often sharing some benchmarks to keep in mind, you know, by the end of the call, usually, we can figure out does it make sense to work together, and then sort out the next steps from there. Of course, if it’s a custom project, usually there’ll be a follow-up call. But something to keep in mind for listeners, the bigger the client organization, the more stakeholders are going to be involved. And you have to decide which stakeholders need to be involved in the initial call or the initial pre-survey, who needs to be involved in the second call? Is there a third call? Who needs to be involved in the proposal review meeting? You know, I think a lot of people have the idea of like, well if I work with bigger companies, I’ll make more money. And that is possible, right? I mean, if you’ve got a client who has 100 million dollars in revenue, odds are they’re spending more money on marketing than a company with a million dollars in revenue. That doesn’t mean they necessarily want to spend it though. And you know, that $1 million company probably has one decision-maker, maybe two depending on how they’re structured. The hundred million dollar company, there could be 5 to 10 decision-makers, and it’s never totally clear who’s in charge. You also can run into a problem that I described as you know, there’s a senior leader from the client team who was too busy before but now suddenly they care about the work you’re doing. They fly in, share some unappreciated feedback, and fly away, leaving you to clean up the mess and your client day to day contact. The technical term for that is swoop and poop. They swoop in, leave the feedback, and leave you to clean up the mess. You can fix that by doing something I call a pre-kickoff survey. With a pre-kickoff survey, once you’ve closed the deal like they’re now a client, they’ve signed the contract and they’ve paid. If someone hasn’t paid you, by the way, they are not a client yet. Only clients or clients must have paid you to be a client. But okay, sign the paperwork, you know, paid the initial deposit, send the survey around all the key stakeholders are asking about how do they define success? What are things look like two months from now? Three years from now? Are there any particular deliverables they’re expecting? Things like that. I have another article about this on the website that digs in, you know, so you’ve got that, you know, those questions to ask, send that pre-kickoff survey around to all of the core stakeholders, your day to day person, their boss, depending on the size of the organization, maybe the CMO if you’re not working directly with them, the CEO. It’s a nonprofit the Executive Director, the Director of Communications, maybe the Director of Technology, if they’re involved, probably board members, at least the chair of the board, maybe others. If your contact says, Oh, so and so is too busy to fill it out, it takes 15 minutes like this is not an enormously complex thing. If they’re like, they don’t have time to fill out, you know, 15 minutes of info, I guarantee that person is going to swoop and poop later. It’s just a question of when. From my experience, just a question of when. So you can use that not just the answers, you can use their participation to predict what will happen, and as you might have guessed, I’ve learned this the hard way. So learn it the easy way. Do a pre-sales questionnaire, do exploratory call, make sure the right people come to the call, do a pre-kickoff.

Tabitha Thomas 39:52
So what do you do if you know this person has not answered and you foresee that it’s going to be a swoop and poop later on? How do you try to avoid it going forward from them doing that?

Karl Sakas 40:05
One would be to make the kickoff call scheduling contingent on everyone filling it out first. You don’t have to, you know, if you’ve got a case where there may be three stakeholders, and you schedule the kickoff call for a couple of weeks out and say we need to by the end of this week, so we can plan you know, for the next week, okay, that’s probably fine. But the more complex the client or the busier they are, you know, currently, you might want to consider making scheduling the kickoff contingent on receiving the info. For instance, I’m onboarding a new executive coaching client. In the part of scheduling the initial call is to sort out the initial coaching call. I need to receive the intake questionnaire and other info so that I can analyze it to create his custom coaching plan to create the initial call agenda, things like that. So I need to know when he’ll get it done before I can schedule the call. And in fact, he actually got it done the same day that I sent it to him a new record. But the good news is like, okay, I was confident that I would have everything I needed. I got all the inputs very quickly. And so in that case, I could confidently schedule the initial call. On the other hand, you know, if you’re working with clients that are juggling a lot of different things internally, you know, you might need longer so I would say make it contingent you need it by this, it only takes 15 minutes yet people are gonna think about it. But the actual time to do it is not very high, and then schedule the kickoff. That’s something to consider. If you schedule it, schedule, the kickoff, and then you find you don’t have everything you might consider making the kickoff happening, contingent on receiving all of the pre-kickoff surveys. You need to have told the client that your day to day contact before you reveal this. It gives them an act case, they’re thinking, we can’t cancel this meeting, we need to get it done. We need to get it moving. And then they’ll apply internal pressure on the person who’s been, you know, tardy. You can use internal client politics in your benefit. Because you frame it as your contact benefits from getting things done. You’re basically creating incentive alignment, creating a win-win. But if you don’t think ahead to doing that, it’s going to be hard to do it. And then it looks like you’re being neat, rather than what you said you would do three weeks ago.

Tabitha Thomas 42:34
Yeah, I like it. I like it. So what does the pricing look like for working with an agency coach? I’m sure there’s a wide range because you work with lots of different, you know, different companies and different needs. But what does that typically look like?

Karl Sakas 42:49
So, you know, there are a range of options. I think on my pre-intake, I note that I have solutions anywhere from $500 to $50,000 plus, …. a big range, right? Um, you know, it depends on if you’re doing a custom engagement or more off the shelf agency roadmap project or executive coaching, you know, people will typically work with me, you know, if it’s a one-off call, of course, that that’s it, maybe they’re doing a couple of calls and might be a few weeks apart, you know, as people are implementing things. With executive coaching, people will typically start with a minimum of six months, but some of the bigger turnarounds take 18 months or longer. I have some clients that I’ve worked with them for four or five years. The key thing is you don’t have to commit upfront, you know, the idea is that it’s not a lifetime commitment. So even the clients who’ve been doing 4-5 years, that’s all on you know, whether it’s a month or project basis. Usually, I’ll have returning clients who will pre-pay for the year for the, you know, the tax benefit of getting the deduction at the end of the fiscal year kind of thing. So it’s a pretty wide range. You know, anywhere from $500 for a one-off call up to 10s of thousands of dollars. And, importantly, that’s in the context of, you know, six to seven figures of impact. So sometimes people will say, Well, you know, I want to do executive coaching, it probably makes sense for them to do that in a year or two, but based on their size, like if someone’s just getting started, don’t do executive coaching. Like you will one-off call or to get pointed in the right direction. And then let’s talk again in a couple of years and get all my free advice in the meantime, and, and I have different information products to help make things easier. For instance, just did a training, a one-hour training on creating a client onboarding process … agency, you know, spend $100 on the recording rather than doing an in-depth consultation, use that first, or get my agency profitability tool kit, you know, find the right slice of things. I expect to be doing a version of this for the next 30 years or so, I have a very long term perspective. So, you know, if someone isn’t a fit now, I will tell them that, you know, I’d rather be known as someone who has said no to clients who aren’t a good fit than someone who’s, you know, looking for a quick buck and, you know, we’ll take anything. And you know, and there are a lot of free resources and indeed, for those listening, do the same thing. You know, I have at this point, approaching 400 articles on my website, so that if someone asks for help on something, and they’re not ready to get one on one support, I’ve got an article, I’ve got a few articles. You know, the goal is to offer value, rather than just try to you know, squeeze out every dollar.

Tabitha Thomas 45:45
I like it. So where can people find the articles that you’re mentioning on your website? What’s the web address?

Karl Sakas 45:51
https://sakasandcompany.com/ If you go there, you can find all kinds of articles. I’d also recommend checking out my newsletter. I share tips twice a week. More than one person has described the newsletter as one of the only emails they read every time. And in fact, I saw an update from an agency owner in Brazil earlier this year, who posted on LinkedIn and according to the translation from Portuguese in LinkedIn, he noted that he and his two business partners anytime they get an email from me, they stop whatever they’re doing, and they spend 30 minutes discussing how they can apply what I just shared. So I work hard to produce a lot of value in every email. So you know, if you visit https://sakasandcompany.com/ , you can find all kinds of free resources. Sign up for the newsletter. And if you’d like one on one help, you know, certainly glad to chat. If you’re not a fit, I will let you know and point you in the right direction.

Tabitha Thomas 46:56
I like it. So how much time – I love that you’re in you’re promoting your own agency. And there’s so many agency owners that I talk to that like you said before, they’re so busy with all of their clients, they don’t take care of themselves …. And I think it’s great that you do that. How much time would you say you’re, you’re putting into writing articles and, and emails and newsletters and things like that every week?

Karl Sakas 47:19
It varies by week, I’d say in general, about 25% of my time. I and you know, a client had asked a couple of years ago, like, Oh, you know, I love all the articles you share, like, you know, do you have people who help you with that? And it’s like, well, sorta, so I write the articles myself. He was disappointed, I think to hear that I wasn’t outsourcing, you know, getting a ghostwriter to do things. I have team members to help in terms of you know, editing, and proofreading and loading things in the marketing automation system and things like that. But I am writing them myself. So if you’re looking for a magic bullet to just handle over to someone else, that probably won’t work or at least whatever they come up with is going to be fairly generic, it’s not going to have your voice. You know, the world does not need another top 10 Pinterest tips, you know, but the good news is if you listen to your clients and your prospective clients, that makes it easy to decide what to write about, you know, the questions that I get from clients or prospective clients, those tend to make great articles. You know, for instance, how do I work fewer hours in my agency, or, you know, this happened with my team, what should I do? Or how should I change my team structure as I grow? You know, if I hear a question from two or three agency owners in a week, I know that needs to be a future article. So you don’t have to do it all from scratch. But it does take time. You know, if you’re currently spending zero hours a week on marketing, and your pipeline is not very strong, that’s probably a factor. If you’re safe. You’re already spending 5 to 10 hours a week between you and the rest of your members of the team. And leads are so-so I would take a look at quality, you know, are you writing for a target persona. If you don’t have a target persona, figure that out. You know, I believe that everything needs to be targeted to your ideal client or customer persona. So you know, people will say to me, I read your article about such and such, it’s like you wrote it just for me. Or people will say, you know, it’s like, you’ve been like listening, you know, surveilling our office, listen to what we’re talking about, I have a very focused target client persona, right? It’s owners of an independent digital agency under 100 people. There are common challenges, right? I’m not trying to write for everyone. In one case, I worked with a client who did software development, both entry-level projects, you know, 10 to 30,000 dollars, as well as higher-end projects, 50 to 250 thousand dollars custom app development, and we took a look at where he was focusing, and I did some analysis. And between types of customers anywhere from small businesses to school systems to large corporations to this and that. And if you consider there may be multiple decision-makers within each type. I said, you know, you’re trying to target at least 16 different personas. It’s hard enough to do 2, imagine how hard it is, you know, there and he was struggling with profit margins because he was trying to do everything for everyone and his marketing was struggling. And so by focusing up a bit more, he was able to improve, but you have to want to do it. If you want to focus on everyone. You’ll probably struggle from a profit perspective.

Tabitha Thomas 50:40
Be ready to climb that mountain that’s for sure. I’ve been notorious for taking pictures of our clients and printing them off and like gluing them to the side of my screen. So when I’m emailing, I’m looking at that person. I’m like, am I talking to them? Am I … what he needs to hear? Not everyone but that one person and that was that’s how I ground myself I guess. So the last question that I always like asking anybody that’s on a podcast, is there anything currently that you are reading or listening to that’s helping you grow as a person or as an entrepreneur? Or as an agency owner?

Karl Sakas 51:13
Yeah. Well, this is a classic book, one that has informed my leadership management, client approach, things like that. The book is called The Human Brand. The Human Brand is by Chris Malone, who’s a former fortune 500 CMO, and Susan Fiske, who’s a psychology professor at Princeton. So it’s The Human Brand by Malone and Fiske. And they talked about the idea of warmth and competence. And it gives you a framework for working with your clients. And also if you’re in a leadership role for working with your team, and here’s how it works. We often think about competence, competence is did you get the job done? Did you do what you said you would do by the deadline as described for the budget, you know, did you do the job? And that is important, right? If if you’re in a situation where you’re working with someone who has low competence, like your clients aren’t going to be happy, you know? Warmth is about do you make people feel special? Do you make your clients feel special? Do you make your employees or your contractors feel special that it’s not just about work, work work, you know, what did you know, what did you do for me lately. So if you look at creating a high warmth and high competence experience, you will improve your client retention, and if you apply that your management approach will improve your team retention as well. I have an article about it on my website about warmth and competence applied to agencies, but I would recommend checking out the original book The Human Brand by Malone and Fiske to see how you can apply it best to yourself.

Tabitha Thomas 52:51
I like it. … you could probably apply it to your family life as well.

Karl Sakas 52:56
Yes, yes.

Tabitha Thomas 52:57
Like you say you’re gonna do and be warm about.

Karl Sakas 53:01
Exactly. Although, you know, I’ve heard you know, if you have kids, giving them sort of a pre-survey before doing things may not go very smoothly.

Tabitha Thomas 53:11
No, not really not really. Having three kids at home. I could tell you No, not really.

Karl Sakas 53:16
There we go.

Tabitha Thomas 53:17
Well, Karl, thank you so much for being on the podcast. I’ve enjoyed getting to know you and hearing some of your insights for growing agencies. I appreciate it.

Absolutely Tabitha. Thanks. And good luck to everyone.

All right. Thank you. We’ll see you guys next week. All right.