How Genuine Empathy Can Reduce Agency Churn Rate

Is your leadership style genuine and sincere? Do you have empathy where your team is concerned? Do your clients display empathy for their end-users? When Lonn Shulkin first started working at Bam Strategy, they had just lost their biggest client and were in the process of pivoting and taking the opportunity to shift their focus to find their ideal customer. Eleven years later, Lonn is now the CEO  at Bam Strategy and is dedicated to motivating consumer behavior through strategy, media, platforms, and creative initiatives. He sat down with Jason to discuss how they went from losing their biggest client to getting to eight figures, how they started building their sales team, and how empathy has helped them increase client and employee retention.

3 Golden Nuggets

1. Building their sales team. Losing a client that represented 70% of their business meant the agency had to find a way to pivot and use that experience with a global client to diversify. After realizing what they were great at, they got specific on who their perfect audience was and then focused on the business development side to build the sales team around that.
2. Investing in leadership. This agency has been able to improve its employee retention by understanding that each individual employee needed the time and attention and the effort from them to understand their role in the company. They worked to create an honest relationship where an employee could go to them if they had other job offers and give them a chance to discuss why they should stay. They also started doing more social activities as a group to create bonds and created leadership programs to start building up their leadership practice. Putting in that work results in a culture fit that permeates to all employees.
3. Teaching their clients empathy. Just like they built employee retention and loyalty by implementing empathy into their company culture, Lonn says they now try to extend that concept to clients to teach them how to care about their customers in the same way. It’s been a big driver of growth and success caring about the end-user in the same way because that's what creates brand loyalty today.

Sponsors and Resources

Verblio: Today's episode of the Smart Agency Masterclass is sponsored by Verblio. Check out Verblio.com/smartagency and get 50% off your first month of content creation. Our team loves using Verblio because of the ease in their process and their large pool of crowd-sourced writers.

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Grow Your Agency & Increase Employee Retention Through Empathy

{These transcripts have been auto-generated. While largely accurate, they may contain some errors.}

Jason: [00:00:00] What's up, agency owners? Jason Swenk here, and I have another amazing guest who has grown an eight-figure agency, very, very profitable. Done it through amazing team, amazing systems and done it with empathy. And so let's go ahead and get into the show.

Hey, Lonn. Welcome to the show.

Lonn: [00:00:28] How's it going? Great to be here. Thank you for having me.

Jason: [00:00:31] Yeah, man. Uh, so tell us who you are and what do you do?

Lonn: [00:00:34] Uh, so Lonn Shulkin. I am CEO at Bam Strategy. Been with the agency for 11 or so years, and just very passionate about growing teams and certainly what we do, which is working as an agency with pretty large customers bring brands that you would know that really focuses on digital experience. So not necessarily the UX stuff, but how we can actually engage customers and communicate with them on a one-to-one basis.

Jason: [00:01:05] Awesome. Tell us kind of the progression or the different cycles that Bam has actually gone through in the past… I guess two decades.

Lonn: [00:01:14] Yeah, it’s quite the ride. I'm sure it's a common ride as a, as I've heard from other guests on your show. But, um, when I joined 11 or so years ago, we had that, that one really big flagship client was taken up 60 or 70% of the business and… yeah it was pretty scary times. And I think at the moment they had actually told us they were, they were a global brand and they had told us that they were going to consolidate all of their marketing in the US and we're based in Montreal in Canada.

So that was a moment where I had just joined the company and we had to figure out how we were going to, um… Luckily, we had a bit of a runway from the client, so they gave us a couple of years notice there, but usually you don't get that in my experience. Um, but we had to figure out, you know, how we were going to pivot and shift and how we're going to use a lot of our experience with this big global brand to diversify.

And so that was probably phase one coming in… the agency is actually 25 years old so coming in as sort of the new guy, there was a lot of work to do as far as aligning teams. And, and for me as a new leader, just sort of figuring out who are my people who share my vision and who buys into that and who can help me craft the company that we, we want it to be and grow it, because at the time growth was not always in an upwards sort of direction.

So lots of up and down. And then we had that big client and so really shifted to focus on those leaders in the company. And that's when I'd say we started shifting into phase two, which is more focused on biz dev, not a ton of RFPs, I would say, although we won a few. But a really big focus on when we had opportunities going all in and choosing those right opportunities cause we started to understand a little bit of what we were great at at the time.

And just putting our all into the pitches that made sense and throwing away the ones that didn't, and I think that was really key for us. And that's when we started winning a few and got a little bit of diversification.

Jason: [00:03:25] I like that you got specific on who your perfect audience is. It sounds like. And then you built the sales team around that. Too many people go, oh my God, I'm gonna lose my biggest client. And my gosh, that was so nice of them to give you a huge runway. And that doesn't happen. I've seen so many agencies go in there. They give you a good runway. And I liked that you focused on the sales team because a lot of times people just say, hey, sales, go find business, but they don't give them direction.

So let's talk a little bit more about the sales team that you guys created. Were these hunters? Were these farmers? Talk about the makeup of what you guys did.

Lonn: [00:04:09] So we've tried everything, as a joke between my partner and I, I mean, we played with the concept of telemarketing having hundreds of calls going out. We had a junior or mid-level salesperson. We had a software sales guy at one point who was more senior and, but it was still outbound calls.

And what we found time and time again is that, and it's still like this today as we've grown to be much bigger, we have our core what I'll call farmers who are really good at client relationships and growing those relationships.

And as I guess, leaders of the organization, what we need to do is leverage those farmers to develop leads as well as our own networks, because the blind pitches, while we've won some, and they are, you know, if I listed our clients, they would be some of them, the longest standing most meaningful relationships we've had have not been what I call formal pitch clients. Or formal RFP that goes out to 20 agencies.

So we don't have this Biz Dev person sitting here who just, all they do is call people and try and get opportunities for us. We've just not seen that deliver the kind of results we want. And we find that it, um, we still get the word of mouth leads that we would get, and we still get the blind RFPs that, that we might get, but we tend to just build on those relationships we have and get referred and find leads that way. And that's, that's, what's worked for us.

Jason: [00:05:49] Do you know, there's two winners to every RFP?

Lonn: [00:05:53] I'm sure.

Jason: [00:05:55] There's the one that wins the project and the first one out. Like, I always hated RFPs and I actually always turned them down. I just realized that RFP stands for like requests for punishment, real fucking problem.

Like it was just like, I hated RFPs because just like you were saying, unless I had someone on the inside or we wrote the damn RFP because that's usually who wins the RFP.

Lonn: [00:06:23] Yeah. I mean, listen, you can, you can sell your soul to the devil in an RFP and maybe get a pretty serious look on price, but then you're not happy that you have the business.

Jason: [00:06:33] I was chatting with a guest not too long ago, and he was telling me after the show… I wish I recorded after the show. I think maybe that should be a whole new segment because that's when a lot of the good stuff comes up, but he was telling me he on a lot of pitches, sometimes they'll spend a million dollars on a pitch.

And I'm like, holy cow, like that's a huge gamble. He's like, well that’ll win like 3 million for the year. I'm like, that's not a gamble I would do. And I do a lot of dumb stuff.

Lonn: [00:07:03] No. I mean, even if you're a really great agency, I can understand the margins on that would not work. So I think we need to be able to show in the pitch that we care.

And if they don't give us an opportunity to do that, we're out of the pitch for sure. Like that's, it's just either, it's going to be so easy that I can just send a spreadsheet in an hour with, with some sort of price and I'll just take a shot at it. Or I really need to be able to show who we are and showing who we are comes as you know, from a lot more than some document.

Jason: [00:07:33] So now that you started building the sales team that are farmers, what was the other part of the teams that you actually your leadership that you started putting together in order to really kind of take the agency to the next level?

Lonn: [00:07:47] So Chris, our founder, had always created this… I joined a company that had an incredible culture. Let me, let me start with that. And there was, I'd say for the size of the agency at the time we had more of an investment in HR and leadership, than other companies I had been at. And so my background previous to them had actually been at a company that sold HR solutions specifically around motivating and engaging people.

And so I would say that with me coming in, we, we doubled down on that. We doubled down on the concept of having more HR investment than other agencies. We figured out that if we could get really awesome people in and keep them here, because that's a huge problem for agencies, that alone would allow us to have sustained relationships with customers.

And that has proven time and time again, to be an awesome investment for us.

Jason: [00:08:43] Give us some examples of what you doubled down on in HR.

Lonn: [00:08:48] So at first we thought, uh, and this it sounds funny and COVID times, but at first we thought that ping pong tables and fruit and all those things were important. And they were.

We quickly shifted to understanding that each individual employee needed the time and attention and the effort from us to understand their role here, what they actually were going to do and how they were actually going to grow. That was critical. And so every single employee had a performance discussion. And so HR would get very involved in creating those forms and making sure that every person had those discussions.

And we would do those multiple times for per year. And we still do those. We, we changed them from very formal and like scoring based to much more conversational, getting to that human side of things and actually understand what makes the person tick.

And with the ultimate goal of, of course having great people and them being happy, but ultimately knowing the market that we're in and how much people get poached and move around to, to make more money we wanted, I guess that goal was to have a chance when someone was poached, we wanted them to either say no, or give us the first chance. That was sort of my, always the, the goal I put out there is that I want it to be so good that someone would even with a big paycheck in front of them, someone would come to us and give us a chance, basically.

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Yeah, I was going to say in our mastermind, one of our members, he always does this and I always preach this to the mastermind. He always said to his employees, if I do anything or anything happens in the agency that you don't like that demotivates you, or you're not happy with where you think "I need to go take an interview", or "I need to get my resume ready", come to me right away and let's chat about it.

And there's been so many people, so many mastermind members that have saved great employees from literally just starting the interview process, because once someone gets an offer somewhere else and then they tell someone about it, dude, they're gone.

Lonn: [00:11:57] Yeah. It's tough. It's tough at that point. So we started recognition programs. We started doing a lot more social activities as a group, so to create bonds, to create… There's a great book actually called, um, 12, which is by the Gallup organization. That's just about the 12 reasons, 12 things that motivate employees that are non-compensation based. And we started doing that with all our managers.

We started doing a leadership program internally with our managers, where we would go through personality types and conflict types and all the classic leadership programs to start building up our leadership practice so that, that could trickle down to people. And that retention, I think is a huge driver of client retention.

Jason: [00:12:43] Yeah, I think that's huge because you know, I look at there's six stages an agency goes through and the last stage is really building the leaders in the organization.

It's kind of like, you know, in the very beginning, it's kind of getting leads. Having a sales system and then the owner gets to a certain level, but, and then a lot of times people stop there. But if the leader that one leader is smart, they'll try to build multiple leaders where they're not the toll booth.

And that's, that's really pretty smart about figuring out what works because everyone's different. But the people you hire, I find if you hire on values, they're going to be very similar in their values, but different in skill set, different in everything else.

Lonn: [00:13:31] Yeah. And so that culture fit, we always emphasize that and we call it being a Bammer, but that's critical.

And there's been a big shift in that permeating from me and our leadership team to now everyone knowing what that feels like. And we can't necessarily articulate it, but it feels like something. It's very cool to see that permeate down to, to everyone, even a new person who comes in and they're like, oh wow I, I feel it too.

And we're on zoom every day right now, so it's, it's very cool to see that start to happen. And the other thing I'll say that I think is really interesting is that as we've grown those people, we invested in as leaders, 10 years ago, our, our leadership today and so that's really cool.

They've been with us for 10 years and even if they were leaders back then they are much more mature and awesome leaders that I would be happy to give the keys to the car.

Jason: [00:14:30] Yeah. The one thing I learned about selling the first agency was when I turned into an employee, you don't have to motivate the good employee. But you have to worry about de-motivating them.

And I was de-motivated by a number of different actions. That's the biggest thing I worry about with my team and I tell the mastermind members, I'm like, if you have to motivate an employee, you hired the wrong employee. I’d tell them like, like, get rid of that person.

Lonn: [00:15:01] A hundred percent. Yeah. If they're not happy here, they, the writings on the wall, right? Like that's… We want them to go because they can be happier somewhere else. And I think that's the other concept of empathy is I would rather them be somewhere else and be happy than be unhappy here.

Jason: [00:15:15] from someone that's been fired from almost every job that is totally true. Some people held onto me too long. Wendy’s fired me the first day. So they, they had no empathy. I appreciate them because I wouldn't be where I was without them firing me and telling me I can't work at fast food anymore. So thank you, Wendy's. I've never publicly thanked them before.

Well, awesome. Um, this has all been amazing. Is there anything I didn't ask you that you think would benefit the audience?

Lonn: [00:15:48] No. I mean, listen, we're working a lot on extending that concept to our end customers and trying to teach them how to actually care about their customers in the same way as we care about our employees. And I think, you know, that's for us been a big driver growth and success now is how we actually sit with our customers and say, you, you need to care about that end person buying your product in the same way you care about your employee because that's what creates brand loyalty today.

And that's to me, the joy of, you know, the cookie going away and all those things that people are scared of is actually, we have to actually show a value now. And to me, that's exciting. And if you're an agency who can deliver value to customers and help your customers figure that out, it's a bit of a holy grail, I guess.

Jason: [00:16:31] Awesome. Well, what's the website people go and check out the agency?

Lonn: [00:16:34] bamstrategy.com. B-A-M strategy.

Jason: [00:16:37] Awesome. Well, Lonn, thanks so much for coming on the show. You did amazing. Make sure you guys go to their website, check it out. And if you guys want to be around amazing agency owners on a consistent basis, that can see the stuff that you're not able to see and be able to hear the strategies that are currently working, not strategies from 10 years ago. But are currently working right now.

And just have a lot of fun and connect with amazing people. I want you guys to go to digitalagencyelite.com and fill out an application. If we feel that you'll be right, we'll have a conversation and we'll chat about it. And then we'll start introducing you to all the other amazing members all over the world that run agencies that can help you grow and scale faster and have a lot of fun.

So until next time, have a Swenk day.