This cycle may be familiar to many agency operators: when you don’t have enough work, you scramble to ramp up your business development efforts while cutting back on recruiting; when the tide turns and the work starts pouring in, you scramble to ramp up your recruiting efforts in order to have the people to deliver on the work, all while neglecting or cutting back on sales and marketing efforts.
It often feels like we’re 2-3 deals from being in either direction, and this scrambling back and forth is something I’d like to better manage. When business is slow, I want sales and marketing efforts on full throttle, but I also want recruiting to be proactive and continuing. When business is popping, I want recruiting to be on full throttle, but I also want sales and marketing efforts in high gear, no letting up.
Recruiting during a slow business period doesn’t have to mean adding headcount. It can be geared towards identifying future talent acquisition targets, building up a relationship, expanding our pool of freelancers, and using small projects to vet contractors. It’s no different than the sales and marketing equivalent during a busy period: you might not say yes to every project that presents itself, but it’s about continuing to stay in touch with people, share your work publicly, expand your network of future lead sources, and qualify & pursue attractive opportunities.
Always. Be. Playing. Offense.
About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.
Riding the Pipeline Roller Coaster
We entered the new year with what felt like a robust pipeline but after a couple of weeks, we started getting news that we had lost out on this and that deal. Soon enough, the pipeline stopped looking so robust.
One of the losses was with a major existing client. We had a big redesign project scoped out and projected for January sign and start date, much like it had gone the previous year with this same client (they own multiple brands). But a few weeks in, we got word that this project would most likely be punted to 2025.
We’ve also been trying to recover from the scale-down of one of our largest accounts at the end of 2023. We got confirmation that after February, they’d most likely be completely done with us on a retainer basis. We’ve struggled to fully re-allocate resources in the aftermath and it hasn’t helped that other engagements have also either wrapped up or scaled down.
But, as is the case repeatedly in this business, our sentiment did a 180 as we got some good news towards the end of the month. We landed projects with new clients and also signed new scopes with existing clients. The new clients include a popular gluten-free snack brand, a famous NYC landmark, and a flower e-commerce business. The existing client scopes include a website platform consolidation project with a breast pump device company and the continuation of an ongoing relationship with a moving company business.
And we’re continuing discussions with a handful of other promising new client prospects. A few of the higher quality opportunities have been the result of our ongoing outreach efforts to reconnect with former clients, former prospects, investors, and agency peers. I go into greater detail about how we’re thinking about sales and marketing in the Top of Mind section.
We want to close as much new business as possible in Q1 to provide ourselves with a good foundation for potential account growth throughout the year. We know that if we can deliver superbly on initial projects with new clients, we’ll be well-positioned to sell in additional scopes or retainer engagements that can add up.
New Barrel Website Launch
We finally unveiled our new Barrel website this month. Our CXO Lucas did a great job leading the effort, applying his design and Webflow chops to build the site from the ground up. Even with his heavy workload of overseeing our business development efforts, partnerships, and delivery, Lucas made time to tinker and ultimately push through a completely new site.
The new site does a better job of articulating our Shopify focus and we’ve rolled out brand new case studies that better represent the impact we have on our clients’ businesses. My favorite part is how tight and optimized the site feels on mobile. With many sites, you often get clunky blocks of images and text that requires too much scrolling. We’ve tried to avoid that by sizing things down while still making the site very readable.
There’s still a lot of work to be done on the site. We are building out pages for our different service offerings as well as focused landing pages for key industry verticals. We also have several more case studies to add.
A new agency website feels like a new haircut or a new outfit – you get that extra pep in your step because it looks good and you feel a bit more confident. Of course, we’ll measure and see if that translates into more leads and more wins for us going forward.
I’ve come to treasure our quarterly get-togethers for Barrel partners and our holding company leaders even more so than before. Living up in the Hudson Valley and committed to the daily routine of dinner with my family and getting the kids ready for bed, it’s a welcomed change of pace to occasionally head into NYC for a day-long get-together with my business partners and then to enjoy a fun dinner afterwards.
The Barrel partners had a great morning session discussing two books: The Referral Code by Larry Pinci and Phil Glosserman and Same as Ever by Morgan Housel.
With The Referral Code, we talked about the importance of overcoming the three fears when asking others for referrals: fear of looking like you’re push, fear of looking like you’re needy, and the fear of feeling rejected. Many people who’d be more than happy to refer business to us simply haven’t because we haven’t asked.
Same as Ever contained a number of lessons that we spent jumping around and discussing. A couple that resonated deeply were: “stress focuses your attention in ways that good times can’t” and “best story wins.” With the former, we talked about all the times of uncertainty and turmoil at Barrel and how those moments really galvanized us to take bolder action. With “best story wins”, we talked about the power of connecting emotionally with audiences (employees, clients, partners, etc.) and how honing our storytelling skills can make us better at sales and leadership.
In the afternoon session, we were joined by the leaders of Vaulted Oak, BX Studio, and Bolster. We all shared our last quarter and 2023 annual results as well as highlights from new clients, existing client accounts, process improvements, and pipeline. Discussions centered around ways to increase lead volume, better service existing clients, and improve talent acquisition – timeless topics for our respective businesses.
Each business made a great deal of progress in 2023. I was impressed with the financial performance of Vaulted Oak and BX Studio. With Bolster, I felt we had turned a corner and become well-positioned to grow in 2024 (early signs in January are very positive). We aligned on financial goals for 2024 across all the companies before concluding.
We’re entering year 3 of this holding company concept. There’s a lot of work to be done to solidify some of the support services we can provide each of the businesses, especially around lead generation and talent acquisition. Sei-Wook and I have been dedicating our Thursday mornings to building out more holdco infrastructure. Over the course of 2024, we plan to shift more of our time and attention from Barrel’s day-to-day to the overall holding company operations.
Top of Mind
Sales and Marketing Approach This Year
In 2023, 17% of Barrel’s revenue came from the initial scopes with new clients. The rest, 83%, came from existing clients or follow-on work with new clients throughout the year. These were a mix of projects, change-orders, retainers, and time & materials billings.
Another way to look at our revenue: 25% was from brand new clients that we started working with in 2023 and 75% came from existing clients. So the follow-on work from new clients was an extra 8% of revenue. Some of the 75% came from clients who were new clients back in 2021, were relatively quiet in 2022, and ramped up their work with us in 2023. It’s important for us to remember that clients may not be ready to spend with us right away or in successive years. It’s worthwhile to take a longer term view and see how an account can increase in lifetime value over a 3-4 year period. It’s doesn’t always work out this way, as clients can always switch agencies for various reasons (e.g. new internal stakeholder with an existing agency relationship they prefer), but I’ve seen enough situations where a client, after an initial spurt of activity, may pull back and then come back a bit later with a lot more work for us.
We recognize the importance of growing existing accounts and that is a major focus of our sales and marketing efforts this year. A few things we’ve been developing:
- Marketing and selling in complementary services that existing clients may not be aware of
- Having more conversations and reporting around key metrics and how our work impacts results
- Proactively asking clients for feedback (we have a system in place but ensuring this continues)
- Offering value-add research (via our DTC Patterns project) and ideas for existing clients
- Investing in in-person get-togethers with clients
- Connecting more deeply with different stakeholders in the client’s organization (expanding our network of relationships within the client org)
I think these and other accounts-related efforts (especially the core effort of consistently delivering to expectations on our work) will be the foundation of Barrel’s ability to sustain a revenue base, giving ourselves a chance to get back to a growth trajectory.
Some other thoughts on sales and marketing activities for 2024:
- We’ll be pulling back on attending conferences, especially those where brands are greatly outnumbered by vendors and agencies. We’ll be looking to attend some of the smaller ones with key partners or ones where we can be featured speakers. We discussed internally how shifting some of the savings from not attending conferences can be used for travel to in-person get-togethers with clients and prospects.
- We’ve been ramping up our focus on consumer packaged goods (CPG) food and beverage clients. We believe we can provide a unique blend of DTC e-commerce, omnichannel marketing, and retention marketing services to these clients at very reasonable budgets. Many of these brands think of their own websites as secondary or tertiary channels versus retail and marketplaces (e.g. Amazon) but there are still valuable ways to connect directly with customers, conduct product development exercises, and cultivate brand ambassadors through their web and email channels. We’ve been testing a sponsorship with a newsletter in the CPG space and will also be looking to invest in other partnership formats (e.g. webinars, podcasts, events, etc.).
- Lucas and I have continued to post regularly on social media. My focus has primarily centered around running agency businesses and Lucas has had an e-commerce focus. We’ve gotten enough positive feedback (e.g. new business leads, new connections with like-minded people, partnership opportunities, etc.) that we’re encouraged to keep it going. We’ll continue to fine-tune our storytelling so we can increase reach and engagement while still ensuring that we don’t fall into lazy click-baity content. Video may also be in the cards as that format seems to be outperforming purely text posts. We’ll also be mixing in posts that speak more directly to the work we do at Barrel, including case studies and videos of work examples with less generic context and stories.
- The Barrel partners have kept our practice of reaching out to at least 10 contacts per week (see my post on this). It’s typically a mix of former and existing clients, investors, agency operators, and solutions partners. The quality of conversations that we’ve been having along with the warm leads we’ve been able to generate has me convinced that every month we keep up this habit, the more opportunities will compound in the coming months and years.
- I’m not 100% giving up on outbound. We had 245 responses, 29 calls, 3 proposals, and no wins from our outbound campaign last year. This was the result of thousands of emails sent out per month for 6+ months. A bit disappointing, given that we invested over $15,000 into the campaign. I think our outbound approach has to evolve to play a longer game. Instead of trying to convince people they should work with us right off the bat, we need to create a more compelling funnel where prospects opt in to get value without having to commit to anything. This sounds like a super basic content marketing campaign (outreach >> send to gated content >> nurture with drips >> monitor activity and engage in sales convos) which I’m also not sure is an effective approach anymore. We’ll need to be more creative and differentiated. I have a few early ideas that I’d like to test out.
To sum it up in a more concise way, this is how I’m looking at our sales and marketing efforts in 2024:
- Engage and market to existing accounts
- CPG food & bev focus
- Executive social media posting (me and Lucas)
- Weekly partner outreach
- Outbound experiments
Some very basic, fundamental stuff mixed with a couple new things. Our results will depend on staying focused and disciplined throughout the year.
Shared with Partners
“Permanent information is harder to notice because it’s buried in books rather than blasted in headlines. But its benefit is huge. It’s not just that permanent information never expires, letting you accumulate it. It also compounds over time, leveraging off what you’ve already learned. Expiring information tells you what happened; permanent information tells you why something happened and is likely to happen again. That “why” can translate and interact with stuff you know about other topics, which is where the compounding comes in.” (Morgan Housel, Same as Ever)
A big reason why reading together has been so beneficial for the Barrel partners is that we’re able to acquire “permanent information” and retain them through immediate application into our business practices. Also, our ability to reference past books in our discussions have enriched our comprehension and analysis of new books.
“Perhaps the most indispensable tool for human beings in modern times is the ability to remain calm in the midst of rapid and unsettling changes. The people who will best survive the present age are the ones Kipling described as ‘those who can keep their heads while all about are losing theirs.’ Inner stability is achieved not by burying one’s head in the sand at the sight of danger, but by acquiring the ability to see the true nature of what is happening and to respond appropriately.” (W. Timothy Gallwey, The Inner Game of Tennis)
Things like AI, shrinking budgets, and stiff competition can be enough to really test an agency operator’s mettle. But there’s always a choice we can make to turn uncertainties and changes into new opportunities.
“The greatest threat to success is not failure but boredom. We get bored with habits because they stop delighting us. The outcome becomes expected. And as our habits become ordinary, we start derailing our progress to seek novelty.” (James Clear, Atomic Habits)
Like many inspiring quotes, this one requires contextualization and case-by-case judgment: some activities/habits in business are indeed bedrock behaviors that should not be interrupted but that also doesn’t mean it’s bad practice to scrutinize and revisit how you do things periodically with an eye towards continuous improvement or perhaps preemptive disruption in light of big macro shifts in the world or industry.
“Our goodwill compounds when we share with others. We should act as a funnel, not a sponge. As Charlie Munger so beautifully puts it, ‘The best thing a human being can do is to help another human being know more.’ In life, the winners also lose occasionally, but those who help others win can never lose. So always help others rise. This is how goodwill compounds over time.” (Gautam Baid, The Joys of Compounding)
This desire to help others by sharing knowledge and my experiences is a big motivator for me. I’ve already felt the goodwill compounding but also feel like I have so much more to give.