I feel like our agency has been getting into a nice rhythm over the past few months. After some disruptions to our org structure and headcount earlier in the year and the adjustment period that followed, we’ve settled into a more stable mode. However, getting into a rhythm doesn’t mean things are necessarily easy. We have unforeseen issues that pop up with clients and employees that need dealing, we have financial challenges to navigate around, and we have to keep working hard to win the next project. Every day, it’s chop wood, carry water. The hard decisions, difficult conversations, and the long list of to do’s don’t magically go away. We embrace them, and we take pride in getting better at these a little bit each day.

About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.

Highlights

DTC Patterns, 1 Year Later

A year ago, we launched DTC Patterns with 20 pieces of content around this concept: budget $500/month for our team to buy things from different brands, let them document interesting marketing and UX interactions, and publish short posts that highlight these “patterns”  as part of a collection that can come in handy for founders, marketers, and designers looking for inspiration.

DTC Patterns has grown to over 150+ posts showcasing dozens of brands and their marketing and UX approaches.

Since then, we’ve published over 150 pieces of content and grown quite a library of useful patterns. The project has helped to increase traffic to Barrel’s website and is also used for our social media marketing. In addition to being a useful marketing tool for Barrel, DTC Patterns has also been a great way for our team to sharpen their ecommerce knowledge by reflecting on and writing about the purchase experience. We also reference DTC Patterns content on client projects, which in itself pays for the investment.

We’re excited to explore ways to expand DTC Patterns in the coming year. There may be more opportunities to integrate what we’ve developed with our client work (e.g. DTC Patterns private research reports) or to introduce more content formats (e.g. short form videos) to engage a broader audience.

I’m very pleased that this internal project has been able to flourish. Our Design Director Christine Carforo has been instrumental in leading the way, curating the brands we buy from, encouraging team members to participate, and ensuring that our write-ups follow editorial standards. If we play this right, we should be able to grow DTC Patterns into a more broadly recognized resource and brand that strengthens Barrel’s positioning as a leading DTC ecommerce agency.

Progress in Marketing the Agency

Speaking of DTC Patterns and its impact on marketing, I just wrapped up interviews for a marketing intern role at Barrel to fill in for our Marketing Coordinator Chelsea Layzell as she takes leave for a few months. Going through the process, I realized that we’ve come a long way in building up our marketing infrastructure at Barrel over the past year. With Chelsea, we were able to establish a consistent discipline of maintaining a content calendar that featured social posts on LinkedIn every weekday, 3-4 newsletter campaigns per month to our list, and new content on our website that features new launches or a thought leadership piece.

Our Marketing Coordinator Chelsea shares our progress in marketing the agency on social and via our email marketing campaigns.

Our marketing efforts existed prior to Chelsea, but they were inconsistent and largely dependent on the availability of certain team members who could be too busy with client work. Bringing in someone dedicated to coordinating and executing these marketing tasks not only allowed us to have consistent output, it also removed a large chunk of the extra-curricular demands of agency marketing from the team. We still have various team members help with putting together news posts and thought leadership content, but the day-to-day marketing work has been centralized in the Marketing Coordinator role.

There will most likely be an adjustment period as the marketing intern ramps up on the responsibilities and replicates what Chelsea has been able to do. But knowing that we have a clear set of responsibilities mapped out already along with a yearlong track record of having done these things consistently, I’m fairly certain we can keep our marketing activities going.

The main KPIs we’ve tracked with regard to our marketing has been follower count on LinkedIn and email sign-ups. While we do look at things like web traffic, email campaign performance, and social media post engagement, what we’ve been most focused on are hitting goals around activity, the leading indicators that ensure we are putting ourselves out there: 20 LinkedIn posts per month, 3 newsletters per month, 1 blog post per month, and 10 DTC Patterns posts per month.

Our plan is to expand our marketing efforts to more targeted campaigns around content, webinars, and events – usually by collaborating with partners in the Shopify ecosystem – and layer those efforts on top of our foundational marketing activities. We’ve yet to really crack the code on generating “marketing qualified leads” because most of our leads are still based largely on referrals and not on any of our marketing activities. I believe our marketing as it is right now is useful as a retargeting mechanism, keeping us top of mind to those connected with us on LinkedIn or via our email list.

Analyzing New Business Wins

I asked our Director of Business Development Dan Fleishaker to run some reports on our new business wins over the past 2.5 years. After sifting through the data, we honed in specifically on start-to-finish Shopify website projects*. We had long considered these projects the bread and butter of our business, but after analyzing the past 30 months, we’ve seen a shift.

Deal volume for custom theme Shopify website projects has gone down but the average project budget has trended upward.

While the graphic above doesn’t show the full picture of new business activity – it excludes website audits, clients that opt for retainers or time and materials versus project-based scopes, and non-Shopify work – the trend for Shopify projects is clear: less volume, higher average budgets.

Having been burned on Shopify projects where we “priced to win” and went into the work knowing margins would be tight, we’ve become more cautious with our scoping and stricter with our minimum levels of engagement for these types of projects. The result is that we’ve passed on many projects that we might’ve considered just a year ago. As a result, we have way less active projects these days than we did a year ago, but the budgets are higher and the scopes are a lot tighter.

In 2021, we hit record levels of revenue but did poorly when it came to profitability. We were optimistic that we could match 2021 revenue while improving on profitability in 2022, but with one quarter to go, it’s looking like we’ll do less revenue this year. The upside is that profitability is looking better and could improve versus last year. This will only be the 2nd time in our history where our revenue decreased year-over-year, but I don’t think it’ll be a “bad year” in the same way I thought of 2015, the last time our revenue metric took a step backward (see my blog post reflecting on that year and the lessons I took away). I think we’ve done a lot of good things to strengthen the business from where it was just 6 months ago, so if we can finish with another profitable quarter where no projects go off the rails, we’ll be in good shape heading into 2023.

*Note: We narrowed this data set to Shopify projects where we built a custom theme versus those that used a theme from Shopify’s Theme Store. While most of our projects are custom theme projects, we had a handful of projects using Theme Store themes that had significantly smaller budgets. To help us compare apples to apples in project budget and scoping trends, we excluded them from this initial analysis.

Top of Mind

Finishing the Year Strong

Speaking of heading into 2023, I’ve been thinking about the key things I’d like to see happen and what it would mean to finish the year on a strong note. I’ve zeroed in on the following that we must accomplish in Q4 2022:

• Wrap up the three lingering projects from 2021 that have dragged on all year.
• Launch two time-critical client website projects as planned with no quality issues.
• Successfully organize and host a great team retreat in October.
• Sign at least 4 new client projects.

Wrap Up Lingering Projects

We have three accounts with projects that have dragged on for more than a year. They’ve all had issues around staffing, quality, and communications throughout the engagements. With close oversight – our Chief Experience Officer Lucas is closely overseeing one, our Chief Technology Officer Wes is closely involved in another, and I’m personally handling one as well – things are headed in the right direction, but there’s ongoing uncertainty about when these projects will end. We all feel that the end is near enough and so we’ve vowed to do whatever it takes to wrap these up in Q4 in order to have a cleaner slate in 2023.

It’s doubtful that these projects would be scoped the same way if we were to take them on today. In fact, I’m certain we may have passed on at least 1 if not all of these projects if they came in as a lead today. But for various reasons last year, we felt that taking on these projects was the right thing to do, and getting them to the finish line has been a real drag.

But like anything else in this business, there’s always a silver lining embedded in the pain. We’ve wisened up in our qualification, scoping, staffing, and delivery processes, informed by the mistakes we’ve made on these and other projects.

Launch Time-Critical Client Projects

In Q3, we signed and began work on a couple of time-sensitive website projects with the goal of launching them in time for the holiday season. Both were a high risk proposition, but we took the chance and put a great deal of resources and support into making things possible. Many of the lessons learned from past projects were applied here, and so far, things are moving along.

As we get closer to the launch dates, we can’t lose focus and have to stay on our toes. These projects represent opportunities beyond launch with ongoing retainers and subsequent project work, so a lot of future revenue depends on how well we deliver for our clients over the next 4-6 weeks.

We’re being especially mindful of quality assurance testing and making sure the sites are in tip top shape when it comes to functionality, performance, browser/device compatibility, and usability. A tight timeframe often makes it hard to stay on top of QA testing, but given the exacting standards of our clients on these projects, I think our team will do everything in our power to deliver polished work.

Successful Team Retreat

We’re having our first ever team-wide retreat in New York City in October. We’ve booked flights and hotels and are finalizing all the venues and activities. It’s a lot of work to stand something like this up, even if it’s for a relatively small group (~30 people total).

The goal for this retreat is to create memorable experiences for our team members to connect, get to know each other, and enjoy themselves. Many people will be meeting in-person for the first time, so it’ll be a welcome change to interact freely with others outside of a Zoom box. We’ve purposely kept the agenda simple and filled it with social group activities to maximize opportunities for people to hang out and explore NYC together.

Our Team Experience Coordinator Allison Hilario has been leading the charge with support from the Partners. There are dozens of details to still work out, so we have our work cut out over the next few weeks. I hope this retreat becomes a blueprint for future team gatherings and allows us to start a new tradition at Barrel.

Sign New Client Projects

Q3 was soft in terms of sales, so Q4’s expected revenue numbers aren’t great. We’ll need to close some deals to make up lost ground. After running a few different forecast scenarios for Q4, we’re fairly confident that if we can land at least 4 new client projects based on what we have in our pipeline, it’ll get us back on track. This is on top of numerous projects that we expect to close with existing clients.

I’m fully aware that winning work from brand new clients is tough and unpredictable. Last year, we made the mistake of viewing our pipeline too optimistically and hiring well in advance of signing work that never materialized. This time around, we’re running a much leaner team and also prepared to pull back on contractors or further right-size the team if the worst case (zero wins) happens. The operating mantra here is, “Hope for the best, prepare for the worst.”

Looking at our pipeline right now, we have a handful of deals that are far enough along with the right characteristics that give me confidence to believe we’ll avoid winning zero. However, the added challenge is timing. It’s very possible that we may win a few of these deals, but if the sign date happens too late in the quarter and the work actually flows over into 2023, then Q4 won’t really see any cash flow benefits. What we really need to see is 2-3 deals sign and start by end of October to make an impact on Q4.

We’ve operated with a sense of urgency all year long when it comes to new business (major props to our Director of Business Development Dan Fleishaker and Business Development Coordinator Riley Stone for keeping an aggressive pace), so I think we’ll continue to put ourselves in a position to be a top consideration for most of the deals we go after. What we can’t control are things like sudden budget freezes or cutbacks, projects being put on hold, or delays in the overall decision-making process. We can do everything right and still come up short, and that’s a possibility I’m not discounting.

No Pressure, Just Keep Going

As much as I can plan and prioritize what I believe are the most important things for the next 3 months, it’s also true that I have no idea how the next 3 months will really play out. It’s been helpful to think through the priorities above. Whether or not things will play out the way I hope remains to be seen. And even if they don’t, it’s possible that in failure, there will be seeds of later redemption and success.

A year and a quarter are just arbitrary time periods we use to keep score and keep plans tidy, but the reality is that time, life, and the world keep moving ahead. What matters most for me is that I’ve got a clear picture of what’s important for the business and doing what I can to align with the team to ensure we’re all rowing in the same direction. Just keep on going.

Shared with Partners

“Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously following through, and ensuring accountability.” (Larry Bossidy, Ram Charan, Charles Burck, Execution)

Been enjoying Execution: The Discipline of Getting Things Done. It’s a bit old-fashioned and harks back to the days when companies like GE an Honeywell were the models of corporate effectiveness, but nonetheless, some of the lessons around leadership are timeless and worth reading. I’ve mentioned multiple times in previous episodes about our need to execute, and this book has been a reassuring read, providing confirmation to our decisions (not always a good thing, but sometimes it’s nice to be comforted in our reading vs. thoroughly disoriented and challenged).

“Integrity includes but goes beyond honesty. Honesty is telling the truth—in other words, conforming our words to reality. Integrity is conforming reality to our words—in other words, keeping promises and fulfilling expectations. This requires an integrated character, a oneness, primarily with self but also with life.” (Stephen R. Covey, The 7 Habits of Highly Effective People)

I continue to find areas of my life and situations at work where I’ve fallen short in following through and thus violated my integrity. However, it’s so much easier to be critical of others when they don’t follow through versus reflecting and realizing that I ought to walk the walk myself. Having integrity is an endless pursuit.

“When we speak of standards of performance, we typically are referring to performance meeting a predetermined level of acceptance. If standards define what we will accept, then in no small measure our standards define who we are. In the same way, our business standards will define our business.” (Gary Keller, Jay Papasan, Dave Jenks, Gary Keller, Dave Jenks, The Millionaire Real Estate Agent)

The idea of “standards of performance” has been top of mind for us. We’ve started to re-evaluate and explore new ways to improve performance management at Barrel in a way that’ll encourage more frequent and timely feedback for everyone with an eye towards more proactively embracing growth development versus waiting until semi-annual performance reviews.