A key to longevity in this business is to have a lot of friends who also run agency businesses. I’ve been lucky to meet and develop relationships with dozens of agency operators over the years. They’ve inspired me with their discipline, creative thinking, leadership, and ambitions. They’ve been great sources of comfort when things haven’t gone so well for me, sometimes lending a patient ear to hear out my challenges and at other times commiserating over drinks while cracking jokes.
It takes work and investment of time to build and maintain a such a network. Groups like SoDA, Bureau of Digital, and Collective54 have been great sources. There are some private Slack channels that have also been great conduits for meeting agency folks. And for me personally, writing a newsletter and posting on this blog has led to valuable connections.
In a month like April, where things didn’t quite go our way (more on this in next section), it’s been helpful to talk things over with agency friends to gain some perspective, ideas, and encouragement.
About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.
Slow Month of New Biz Wins
April was a disappointing month on the new business front. We lost some deals, haven’t yet heard back from several new prospects, and ended the month with zero net new clients. After a fairly active Q1, this was a concerning start to Q2.
We’ll need things to pick up the first few weeks of May – we’re in the process of wrapping up some projects which means we’ll have resources available to take on new work. If new work doesn’t materialize, then we’ll be faced with underutilization, which can quickly erode margins and lead to negative cash flow.
We’ve got some interesting and exciting opportunities in the pipeline right now, so it’s heads down on doing our best to win.
Trying Another Outbound Firm
We engaged an outbound lead generation firm – the third such firm since I started writing Agency Journey. This firm has an unorthodox approach to its messaging – it relies on the promise of a gift to incentivize prospects to take a brief call. We’ve decided to be open-minded and go along with all of their recommendations. So far, the results have been spectacular vs. any of our previous outbound lead gen engagements. In April alone, we had nearly 40 “bites” to our outbound emails. We ended up taking 9 calls, one of which led to a proposal.
This has been a pleasant surprise for us, especially as a handful of these leads are with brands with real problems that we can help solve. We’ll need to iron out a few things with our process including doing a better job of qualifying who gets a phone call. We’ll also need to have a way to stay in touch and be top of mind with people who aren’t ready to buy now but may be interested later, most likely some kind of drip campaign as well as quarterly outreach reminders.
Getting an outbound engine going is something that’s eluded us, so finding some degree of success – actually landing a couple projects – would be a huge step forward in my book.
Vaulted Oak and BX Studio Showing Strong Results
We held our quarterly Barrel Holdings meeting in April. Our sibling agencies Vaulted Oak and BX Studio posted some very impressive results, showing revenue growth and strong margins. It’s been inspiring to see the work that each business has been able to do to improve processes, serve more clients, and strengthen team culture. Jason Fan of Vaulted Oak and Jacob Sussman of BX Studio have done a tremendous job of leading each agency.
At the holding company level, we’ll be doing more to support Vaulted Oak and BX Studio in a couple of different ways.
For Vaulted Oak, sourcing talent for its growing client base has been a challenge. Since there’s a great deal of overlap between the type of work that we do at Barrel and at Vaulted Oak, we’ll be exploring ways to flow some of Barrel’s talent acquisition efforts through to Vaulted Oak. One idea is to create a pipeline of pre-vetted candidates, providing finalists the option to interview at Vaulted Oak if Barrel no longer has an opening. There are a few other ideas and initiatives that we’ll experiment with in the coming months to provide Vaulted Oak with more quality candidates.
For BX Studio, continually increasing lead volume is a major priority. The Barrel partners have been leveraging our relationships with creative/design agency owners to help BX find more collaboration partners. These other agencies are key referrers of clients to BX Studio since they can trust BX to bring their Figma designs to life in Webflow in a seamless way. We’ll also be hitting up private equity and venture capital firms to introduce BX Studio as a low cost, high quality solution for helping portfolio companies have impactful marketing websites built on Webflow.
Top of Mind
A New Site Launch and the Importance of Returning Clients
In April, we helped launch the website for Delola, a new spirtz cocktail brand. The brand got immediate press attention through its affiliation with Jennifer Lopez. This was the third spirit brand we worked on with our clients, whose track record of successfully tying alcohol and celebrities is perhaps unparalleled in the industry.
We first worked with this client (they keep a low profile, so I won’t name them) back in 2018. We managed to successfully deliver a website at low cost and short timeline while also ensuring quality was top notch. It wasn’t the best managed project in terms of our own profitability, but overdelivering helped us win our client’s trust.
A year later, they came back for project number two. We managed to convince them to increase the budget this time around, and we also found ways to be more efficient on our end. The end result was another successful project where all sides were happy. This second website required some additional enhancements and expansions, which led to new add-on engagements over the next 2 years. The lifetime value of website number two ended up being nearly 3 times the budget of the first one.
The point I want to make here is that it’s important to have clients who are likely to return with more opportunities. These are clients who may not necessarily opt in to an ongoing retainer or sign a huge project contract, but they are ones that are continuing to launch new brands, invest in new ventures, or leading new initiatives within organizations. They may go dark for a few months or a few years, but they eventually come back. When I think back on some of our most impactful clients, it’s the returning clients who come to mind.
Returning clients are people whose trust you’ve managed to gain. You delivered for them consistently and perhaps provided other types of value throughout the relationship (e.g. made impactful intros, helped them hire someone great, etc.). They drive down the cost of sales – you don’t have to work as hard to pitch and convince them through a long and drawn-out process. They’re also likely to trust your pricing and sympathetic to your need to make a decent margin.
Developing and nurturing returning clients is critically important to the growth of an agency. The sad truth is that after all these years, we haven’t quite put in the thinking and effort to systematize and scale this. We’ve held to the belief “deliver for our clients and things will take care of themselves”, but I’m beginning to question whether or not this is enough.
We have some ideas around how to be more proactive around periodic outreach to catch up and being better about finding opportunities to add value free of charge. The key is to never let a successful project engagement go to waste – ride that high to continue deepening trust with the client, to be top of mind especially when the next opportunity comes along, and to increase the overall pool of returning clients. Lots of work to be done here.
Shared with Partners
“Boutiques should generate approximately 80 percent of their revenue from existing clients and 20 percent from new clients. If your numbers differ significantly, rethink your business development efforts.” (Greg Alexander, The Boutique)
Through Q1 of this year, we’re at 50/50 when it comes to revenue from existing clients vs. new ones. We still have work to do to build out a larger base of retainers and returning clients. We’ve improved a lot of systems to retain the clients we currently serve, so as long as we can get new clients in through the door, the base will steadily grow.
“It is quite a revelation to discover that the place you wanted to escape to is the exact same place you escaped from. That the prison wasn’t the place, but the perspective.” (Matt Haig, The Midnight Library)
I love this quote because it’s a great reminder that escaping, moving away, or hiding from things without confronting the underlying issues and challenges is a surefire way to guarantee that they pop up again later on. And usually, the underlying issue is most likely some matter of distorted perspective.
“Time is a choice; work hours often have nothing to do with how much you could be doing.” (Laura Vanderkam, Off the Clock: Feel Less Busy While Getting More Done)
I sometimes fantasize about a work schedule of 2 hardcore focused hours of deep work (no emails, messages, etc.), two 30-min meetings, and 1 30-minute block for emails as the entire workday. The 2 hours would require total concentration with zero distractions and same for the 30-min email session. I feel like this was how I operated during my last parental leave and I actually got more done then vs. my full-time schedule.
“People often ask me how I motivate my employees. My response is, “I hire them.” Motivation is for amateurs. Pros never need motivating.” (Keith J. Cunningham, The Road Less Stupid)
This resonates deeply and is also the reason why we know within the first few weeks whether or not a new hire will make it. The other piece to pay attention is to make sure that as leadership, we don’t do things to erode motivation. Poorly defined roles, chaotic work processes, underperforming team members, and tons of organizational uncertainty can deflate even the most motivated employees.