Agency Journey Episode 39 (Y17M6)

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On my mind during this year’s Thanksgiving weekend has been the feeling of how fleeting life can be. I’ve seen family members get older and enter different stages of their lives. It’s very possible that with some, we may only get a handful more holidays to spend together. I’ve been feeling it with my three young boys – it was just a few years ago that none of them were here and now they’re such a big part of my life. And in a blink of an eye, as they grow up and make their own way, I’ll be amazed by how quickly that went.

The same goes for Barrel. I recently had a conversation with a college-age son of a fellow Columbia alum. The son was interesting in pursuing his own agency business. He asked me questions about my time at Columbia and how Barrel started. Recounting the story, it felt both like yesterday and also ancient times. I can’t believe it’s been 20 years since I crossed paths with Sei-Wook at Lerner Hall (the student center) and struck up a friendship and partnership that’s continued to this day.

I’d be remiss if, on this Thanksgiving weekend, I didn’t take the time to express my gratitude. There’s much to be grateful for, from the people in my life to the wealth of opportunities and comforts that I’ve been lucky to experience. I’m especially grateful for life itself and how, in this short and unpredictable time we have here, we’re afforded a canvas on which to experience, experiment, grow, learn, love, and do so much. It’s not always easy, and we all experience some incredibly brutal and rough moments, but to have had a chance to live in the first place, that in itself is worth celebrating every now and then.

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


Account Planning for 2024

We had a couple of productive sessions with our Client Services team and the Barrel partners to review every single client we worked with this year and what we felt would be our opportunities to either grow or maintain each of the accounts. We challenged our account managers to think “best case” stretch goals for accounts that had potential to grow, reasoning that we could apply a discount after the fact to give ourselves a conservative target. Better to think big first and get our creative juices flowing in terms of how we’d be able to bring more value to our clients through new or expanded engagements.

It was promising to see a handful of accounts that were in position to grow in big ways. These are clients that we’ve invested a great deal of time in understanding their business, getting to know various stakeholders on their side, and building trust with different departments and levels of leadership.

On the flipside, I was a bit discouraged that the number of such accounts were limited. Most other accounts were of capped upside – we would be lucky to hold on to our existing retainer or would really need to push hard to present a case for additional engagements. It’s not that these relationships are impaired or anything, but depending on the stage of the business and the capabilities of the client’s internal team, we find ourselves with varying degrees of budgets to work with as well as bandwidth on the client’s end to even initiate the work.

I don’t see an easy solve to this challenge – we’ll continue to press forward in our efforts to generate more leads and land new clients with high potential for long-term high-value relationships. We’ll also keep refining the way we service our accounts and proactively bring ideas and insights to the table as a way to open up conversations about future workstreams. We’ve made some strides this year in tracking and talking more about our clients’ e-commerce performance figures (e.g. AOV, conversion rate, subscription churn, etc.), which in turn has led to stronger cases for website enhancement or redesign work.

A Sizable Client Going Away

Right in the middle of our account planning sessions, one of our larger accounts suddenly notified us that they would be pulling back on their monthly recurring commitment over the next few months and then, come February 2024, would bring it down to zero. The company was unable to raise a round of funding and was in cash conservation mode. Many of the plans they had drawn up with us for the coming year was now on pause. They would manage what they could with an internal full-time developer. There’s a chance we’ll be working with them on a project basis throughout next year. For now, though, what felt just weeks ago like a sure thing became a gaping hole that we would have to fill next year.

We’ve experienced a range of outcomes when it comes to our more sizable accounts. These are typically clients who book out a dedicated team from us and can be counted on reliably to pay a monthly sum for ongoing work. When it works out, we deliver a great deal of value while the client continues to retain us year after year, sometimes layering on additional projects or increasing the monthly commitment. When it doesn’t work out, it’s usually a combination of our team falling short somehow and the client’s business struggling or shifting resources/priorities. In such cases, the writing is often on the wall and what had the potential to be a 4, 5, or even a 7+ year relationship can turn into a churned client within a year. Many clients fall somewhere in-between and for clients to have had a good run for 2-3 years before leaving us.

While we’re bummed about this particular client going away right as we head into 2024, we’re quickly shifting resources and focus to other high potential accounts to ensure they can grow to make up for the difference next year.

Some Wins, Some Losses, and a Couple of Launches

New business pipeline activity has picked up in Q4. We have nearly 50% more inbound leads at this point in the quarter versus the previous one. What’s more promising is that we’ve qualified and proposed more than 150% in dollars at this point in the quarter versus the previous one. Last quarter (Q3) was a really tough one where we landed perhaps the lowest dollar amount in deals in quite some time, so a bounce back is critical. The numbers are pointing in the right direction, but the next few weeks, when we find out about some key deals, will really determine how well we’re set up for the early part of next year.

A few key wins to note so far this quarter: a new Shopify website for a business that sells water systems parts and accessories, a marketing website for a new high-end eco-travel business, UX design work for a packaging supply business, and analytics work for a fashion brand.

In the loss column, we missed out on a couple of Shopify website retainer-type engagements, one with a cleaning products brand and another with a packaged water brand. One of these clients had us go through a multi-round (I think it was 4+ rounds) process filled with tests, grill sessions with different team members, one-on-one with a board member, and further written work before letting us know we didn’t make it. It was a bit frustrating to be told we were a “finalist” before being rejected, but we chose to participate, so we’ll just have to accept the result. We haven’t received any feedback yet on why we lost out but we made sure to ask.

A couple of client website launches to share – for Headspace, we helped them launch their Headspace for Organizations site in collaboration with BX Studio, who executed the Webflow development on Barrel’s design work; we also launched a new Shopify website for Patagonia Provisions, the food business division of Patagonia, the popular eco-conscious outdoor clothing company.

project screenshots

Left, a screenshot of the new Headspace for Organizations website. Right, a screenshot of the new Patagonia Provisions website.

Top of Mind

Present Needs vs. Building For The Future

We’ve been heads down in 2023 with a focus on these two key areas: delivering for existing clients and trying to land new ones. During some stretches, it’s felt like a losing battle with shrinking budgets, some client churn, and not as many wins as we’d like. But we’ve managed to show up every single week, deal with what we have to, and have kept things going.

Personally, I’ve found most of my focus on present and short-term matters. Making sure we’re in an okay financial position, doing what I can to help increase lead volume, and pitching in to stabilize accounts that need help. While these have all been necessary activities, I need to remind myself that I can’t let these be the only things I do.

In recent weeks, I’ve tried to reorient myself by asking the question: “Where do we want to be in 3-5 years?”

It’s been a tough exercise given how this year has shaped up, but maybe that’s precisely why I should be spending more time thinking about the future. Instead of being stuck in a reactive state of addressing present needs and challenges, the way to break out and achieve different results is most likely by envisioning the future and trying new things.

A few thoughts that I’ve been working through along the “build for the future” line of thinking:

  • What do our services and offerings look like 2-3 years from now? It’s clear that much of website design and development has become commoditized and less valued by clients. Better software enabled by AI will only speed up the compression of cost and what we’re able to charge for a lot of the work we do right now. I think more of our work will shift to helping clients “make better decisions” by providing them with insights on how to use data, how to link up different technologies, or how to arrange different customer experiences vs. doing the actual execution (although this, to some extent, will never completely go away).
  • How will our org structure evolve to meet the needs of our clients? If our services and offerings evolve, then our org structure will also have to change. It could mean the creation of new roles, the development of skill sets that aren’t as prevalent within the company right now, and the elimination or reduction of other roles. We’ve mostly experienced very incremental changes to our org structure over the past 10 years, but I have a feeling that we’re at an inflection point where we could see more drastic changes in the next 18-24 months.
  • How will we position ourselves? We’ve made do with our “we make Shopify e-commerce websites” positioning for the past few years but we’ll need to keep experimenting and go deeper. If we are to double down on Shopify, there may be opportunities to position ourselves more specifically around different Shopify use cases (e.g. B2B or subscription-focused businesses) or different industry verticals (e.g. CPG, home goods, etc.). The positioning also needs to support the evolving menu of service offerings, which could mean shifting away from a focus on “websites” and adopting language around platforms, tech stacks, and ecosystems that resonate more with our potential clients.

These types of questions, after we’ve spent time answering them to the best of our abilities, then lead to the follow-up question of: “What are the investments (in time and resources) we need to make in order to create this new future?”

It’s hard to predict how 2024 will shape up much less the next 3-5 years. However, one thing I am 100% certain on is that if we continue to do exactly the same things we are doing today in terms of our services with the same personnel, our business will struggle and eventually fade away. Building for the future means willing to reinvent and experiment, and we can only do that by taking the time to imagine what the future can be.

Shared with Partners

“Failing is a part of life. It is merely a setback and an opportunity to reset the goal with new conditions of satisfaction, and new by-when dates.” (Chip Wilson, Little Black Stretchy Pants)

We started veering off our annual forecast fairly early on in 2023. From there, as we worked through client attrition and lower budgets, we’ve been resetting goals and adjusting our outlook. While initially discouraging, we’ve accepted that missed goals can happen from time to time and the opportunity is to take new information and set new goals that continue to push us forward.

“Potential buyers will steer away from boutiques that do not institutionalize their relationships. Evidence of this can be found in well-documented client account plans. Buyers will want to see these account plans housed inside a customer relationship management system that is used by all. A risk that a buyer takes when buying a boutique is key employee turnover. Sometimes key client relationships sit with key employees. When the key employee leaves, they take the clients with them. Buyers will not acquire your firm if this potentiality exists. The acquirer will want to know that these relationships are with the institution and not with the employee. If the employee quits, the billings do not go away. This requires institutionalized relationship management.” (Greg Alexander, The Boutique)

All of our clients have both an executive sponsor and an account lead, which provides some redundancy when it comes to client relationships. I can’t say that we keep well-documented client account plans but we do have folders of assets and docs that can help newcomers to the account piece enough things together. It’ll be worthwhile for us to continue building our account infrastructure and knowledge base to allow for easier onboarding of new team members and to further “institutionalize” relationships.

“Savings is a hedge against life’s inevitable setbacks. Savings confers on us options and flexibility, the ability to wait, and the very possibility to participate in the rare superlative opportunities that may present themselves during one’s lifetime. But the most important reason for saving is personal freedom and control over time. This allows us to devote more attention to the meaningful aspects of our lives, such as relationships, creative pursuits, health, and philanthropy.” (Gautam Baid, The Joys of Compounding)

This quote refers to personal savings but I think it also applies to businesses. Having a certain amount of cash reserve can provide much needed protection from unexpected costs. Whether it’s severance payouts for layoffs, an unexpected tax bill, or settling with a client over a mishandled project, having cash on hand has been clutch in giving us options. It’s also helped us make key investments, like starting BX Studio or initiating internal projects like DTC Patterns.

“Great account people embody other qualities: patience, discipline, grace under pressure, a sense of humor, meticulousness, a sense of ownership, a spirit of collaboration, self-effacement, a sense of context, a service orientation. All of these are incredibly important.” (Robert Solomon, The Art of Client Service)

These are the intangibles that we also look for in our account people. When you spot these qualities in an account person and provide them with the opportunities, great things happen. The challenge always becomes – how do you get more of these people?

“Once you see that the trouble you are going through is merely a separate set of circumstances that has no relationship to your commitment to change yourself and your life, it will no longer panic you. You will not confuse the circumstance with the commitment ever again, which leaves you free to focus on and enjoy the fruits of your commitment.” (Dusan Djukich , Straight-Line Leadership)

I absolutely love this statement. Circumstance vs. commitment. Circumstances might cause temporary pain or stress to life, but I can always continue choosing to take actions in a disciplined manner in order to make progress in my life. Very empowering.

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