This past month has been about gearing up for some major personal changes in my life. After 16 years in Brooklyn, we’ve relocated to Hudson Valley as our family gets ready to welcome child #3. I’m excited about the move but will also miss various aspects of city living, being a quick e-bike ride from anywhere in Manhattan, and meeting up with people in-person on a near weekly basis.
Just four years ago, we were in the midst of expanding our Barrel office to take over the entire floor of our building in Little Italy / Chinatown. Little did we know that just months after we finished the build-out that we would never again use the office like we once had. We’ve since sublet most of the office as we run out the clock on the 5-year lease extension that we signed in late 2019. Besides our Team Experience Coordinator Allison, who goes in a few times a week and manages our tenants, I’ve been the 2nd most active Barrel member to use the office. I found it hard to work there all day when most of my time would be spent inside a private booth or conference room on endless Zoom calls. I’ve typically come in only for in-person meetings, maybe 1 or 2 Zoom calls, and then promptly bike back to Brooklyn.
Now that I’m 2 hours north of the city, I can see myself using the office (until the lease expires) as home base for visits to do in-person meetings. I imagine stacking 4-5 in-person meetings and making a day of it, heading in early via car or by taking Amtrak. This kind of situation would have been unthinkable to me just a few years ago, but neither was the prospect of having 3 kids and running a fully-remote organization. Things can change fast. I’ll probably feel wistful for a few beats and then adapt and get used to the new routine of things.
About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.
Small Deals, But Wins Nonetheless
In August we signed four new clients to small first-time engagements: a Shopify merch store build for a much-talked-about Welsh soccer team; some Recharge implementation work for a supplement brand; a design retainer for an events management app; and some landing page work for a different supplement brand.
These deals are all on the small side but we felt they were good opportunities for us to build rapport with the client and be on-ramps to further work. We’re talking about future projects with a couple of the clients already, so if we can deliver on the first project and establish a positive working relationship, additional revenue should follow.
We also signed a retainer with a client that we’ve been nurturing for over a year. We did an initial website audit back in 2022 but they did not commit to any follow-on work. We stayed in touch for the next year, checking in every month and keeping them in the loop about things we were doing with Shopify and Klaviyo for other clients. Finally, they felt it was the right time to jumpstart their web-related projects again and re-engaged us. It wasn’t an easy win, but given the patience and persistence required, it was a gratifying one.
Building Momentum with Bolster
While the majority of my time has been focused on Barrel, I’ve been involved with our brand design agency Bolster as it tries to gain footing as a business. In July, we launched our Bolster Omakase offering and promptly attracted several startups and small businesses to our waitlist, eager for a free brand refresh design (see my post on why we decided to do this). Our Creative Director Henry Alcock-White hustled hard to turn multiple brand design presentations around week after week. The work has been top-notch and people are starting to notice. We’ve begun to convert some of these free Omakase customers into paying ones.
Building up Bolster has definitely been much more challenging than what we’ve experienced with Vaulted Oak and BX Studio. While we do get brand design related inquiries almost weekly, it’s nowhere the volume of opportunities that we were able to pass on to Vaulted Oak and BX Studio in the early days. Barrel is known primarily for our web work not so much our branding work. Hence, it’s required us to build up the Bolster brand from a less established position.
I’m not 100% sure we’ll get there, but for now, the big picture goal is to find a way to deliver on 100 Bolster Omakase engagements–provide 100 different businesses with a free, unpaid brand design. It is our marketing, sales, and operations strategy – in doing 100 of these, we’ll end up building all kinds of interesting relationships, create a robust portfolio of work that we’ll share widely, and establish systems to turn around quality design with incredible speed. It’s going to be a hectic and intense pace for the team over the next 3-4 months, but I believe a real business with emerge as we hit critical mass with the Bolster Omakase.
Top of Mind
Drilling Down Deeper Into the Business
One of the striking takeaways I’ve felt from working with our CEO/business coach has been our inability to answer the question: “How will you achieve the X% in sales growth next year?”
When we used to ask ourselves this question in past years, the answers would skew towards the generic:
- We’ll get organic growth through new clients we gained this year — they’ll do more work with us and they’ll also refer us more clients;
- We’ll finally crack outbound and get some wins there;
- We’ll do more partnerships and get referrals that way.
Rarely did we ever try to quantify and model out these efforts into how they might impact sales. Much of it, in hindsight, was wishful thinking.
The problem was, we sometimes did have organic growth and we sometimes did get a few more deals from partnerships. Outbound, of course, never seemed to work, but we could always punt that to the next year. Usually, we had just enough positive momentum year-to-year to convince ourselves things would be fine again the next year.
Through our coaching sessions, we’ve come to see that greater rigor is required to create the results we want to see. Rigor starts with knowing our business at a more granular level. We spent much of the first 6 months with our coach putting together a more detailed picture of the business: accurate pipeline activity including lead volume, win rates, and deal sizes; up-to-date P&L statements including dialing in our gross margin, EBIT, and costs; client concentration, retention, and lifetime values; and countless other figures we had largely glossed over for many years or only examined in isolation but hardly connected across the entire business.
We’ve recently been diving into what next year will look like and building a revenue bridge model to understand where we’ll be starting and how big of a gap we’ll need to fill through our sales and marketing activities.
The big levers for us to attack are:
- Finding ways to get existing clients to spend the same or more next year – while this isn’t possible for every client (since some clients did one-time large rebuild projects with us this year), the cost to sign a new SOW with an existing client is so much lower than trying to land a net new client. We have really exhaust all opportunities with our existing clients.
- Running measurable campaigns to highly targeted prospects – rather than haphazardly doing some outreach, some social posts, or some ad spend here and there, we need to devise and implement an orchestrated effort towards a well-defined ideal client profile and measure the outcomes. This may involve various channels (paid, SEO, outbound, events, etc.) and investments (content creation, sponsorships, sales & marketing headcount, etc.), so we’ll need to keep track and find ways to attribute leads and deal wins to these campaign efforts. The key here is to build a repeatable system and framework that replaces inconsistent, ad hoc activities and drives a much higher volume of quality leads.
- Improving our win rate – we’re hovering around 30% for the year in terms of win rate (by dollar amount – $ in wins over $ proposed), which is historically lower than in past years (around 36%). This is sometimes a tricky stat to consider. We can juice up win rate by going after less deals where we feel like there’s less than a 50% chance of a win. But earlier this year, we won a deal where we were one of 18(!) agencies and the client has been a fantastic addition to the roster, signing on for additional work. So I don’t think we’ll purposely send less proposals qualified leads to improve win rate, but what we can do is extract win/loss feedback (via incentivized surveys) and use our learnings to tweak our sales messaging and process.
- Layering on services to increase project/retainer size and volume – we’re down over 20% off of our top-line revenue in 2021 because we shuttered our growth marketing services, spun out maintenance contracts to Vaulted Oak, and passed on Webflow development work to BX Studio (on the flipside, aggregate Barrel Holdings revenue has grown since 2021). Our Shopify web-related services revenue has grown over the last two years, which is a good sign. We are optimistic about continuing to expand our retention marketing services, which is primarily centered around our Klaviyo email marketing work for clients. We will continue to refine our offering and aim to sign more email marketing audits as well as ongoing retainer packages that either expand our current retainers or can standalone for clients who just need retention marketing services.
Today, much of our activities are reactive and dependent on the quality of inbound leads that hit our inboxes each week. Six months from now, I’d love to look back and feel that we’ve taken a materially significant step up in the way we treat sales and marketing at Barrel. It’s going to take a great deal of work and experimentation, but I’m eager for us to get going on this.
Shared with Partners
“If your promise is not unique there is no incentive for a customer to pick your company over any other competitor. If a legitimate difference does exist between you and your competitors’ promises, your promise should clearly indicate that difference. Otherwise, there is no differentiation in the mind of the customer. Actual product differences matter only if they help you differentiate the promise you make to your customers.” (Victor Cheng, Extreme Revenue Growth)
We’ve struggled with having a unique value proposition that differentiates Barrel from other Shopify-focused agencies. As part of the sales and marketing efforts outlined above, one of the exercises in generating our campaigns will be to test bolder messaging to see if we can find positioning that resonates with our prospects.
“Do we have a culture of positive outcomes for clients? Our culture may have accepted mixed outcomes in the past, but it needs to evolve so that 100% of outcomes are positive for clients. We have always done what clients expected of us, but clients have not always been as demanding as they should have been. We should always exceed their expectations. The work that we should be most proud of is that which works for our clients, driving improved results, even if this is not exactly what they are asking us to do. Work cannot be great if it does not contribute to their business success.” (Michael Farmer, Madison Avenue Makeover)
This quote from Huge CEO Mat Baxter is from a book detailing the agency’s efforts to re-position and rethink their services offering, moving more into a fixed-fee “product” approach. At Barrel, we define our agency’s purpose as “providing our clients with exceptional service and work that generates impactful results” which is all about positive outcomes for our clients. But defining, measuring, and documenting positive outcomes for clients requires a lot of work and attention that can fall by the wayside if a team gets complacent, so it’s something we need to continually monitor and ask ourselves if we’re being true our purpose.
“If all you have are the models and habits for $2.5 million, those borders will become a box that you will have to break through should you desire to achieve more. Before you can move forward, you’ll have to unlearn your old models and old habits and reinvent yourself with appropriate models and habits to support your new larger goals. On the other hand, if you can begin with the models and habits of someone at the $80 million level, then the borders will simply serve as steps you climb on your way upward.” (Gary Keller, Jay Papasan, Dave Jenks, Gary Keller, Dave Jenks, The Millionaire Real Estate Agent)
I really appreciate this quote but it’s taken me a while to realize that in order to unlearn old models and old habits in the first place, it’s important to recognize and understand what those models and habits were in the first place. So much of the activities within an organization develop in organic ways through hundreds of small decisions via inputs from numerous people. Certain behaviors and beliefs come into being without us being fully aware, and this is why change is so hard. It takes a great deal of reflection and self-analysis to identify what we’ve been doing and why certain things have or have not worked.