Wed, 1 May 2019
Are you looking for a creative way to reward your agency team? Ever considered giving your key employees a stock option? This can be a great way to incentivize and reward your loyal and hardworking team. The real key is to do it the right way so you don't lose ownership or control.
In this episode, we'll cover:
Today, I talked with Matt Fickin, Sales Partner at Techwood Consulting, an SEO and paid ads agency. I love having salespeople on my podcast. They can help give agency owners a unique perspective. Matt's agency's culture is all about value. So, when it comes to providing employee value, he decided to set up a profit-sharing model. The more success employees achieve, the more money goes into their wallets. He's on the show to explain the benefits of using profit sharing to incentive your agency's team.
How Profit-Sharing Can Boost Your Value
Here's the question — why should you think about profit-sharing? Let me ask you this: how do you currently motivate your employees? Is it your culture? Or, are you offering promotion incentives? Maybe bonuses? Hey! Those are all great! But, what if you could directly reward employees based on your entire agency's success? That means employees aren't getting rewarded based solely on their projects — the whole agency needs to succeed.
That is baking success into your agency's DNA! It's a great way to get all your team members collaborative and accountable while spreading responsibility throughout the agency... when everyone succeeds, everyone wins.
I'm not saying this will work for every agency model. And, you can definitely find ways to bake value into your agency without giving your employees a financial stake. But, it can help boost the team as a whole and incentive your key players.
What is an ESOP and Why Have One?
Matt set up an employee profit-sharing based on the ESOP model. ESOP stands for "employee stock ownership plan." Basically, it means giving employees stock as an incentive. So, the better the agency performs, the more money the team makes! When your agency's value increases, their wallets get fatter!
Usually, an ESOP involves a vesting period. So, employees may not be able to cash out their shares until they've worked for you for at least 3 - 5 years. This means your most loyal employees are going to be benefiting the most. If an employee leaves, your agency simply purchases their stocks. It's cash for agency-wide wins. Matt also says that you can fast-track executive staff or key employees. In fact, you can even give execs partial ownership using the same methods — which I advise against.
Even better, an ESOP comes with some pretty hefty tax benefits. You should definitely talk with your tax person first — these are going to vary by business, state, etc.
Should You Be Offering Free Audits?
Of course, I couldn't have a salesperson on the show and not ask about the sales pipeline. Matt says one of the best ways to get clients in the door is to offer up free audits. Sure, some of your prospects take your audit and do the fixes in-house or with another agency. But, by and large, most prospects are going to stick with you once you give them a free audit. If you establish trust up front and prove your authority with audit itself, there's no reason they'd need to look elsewhere.
Audits are a great way to impress your prospects and help you get your foot-in-the-door. Now, a caveat here -- Matt admits that he doesn't offer free audits when clients want complex circumstances. But, you can figure out when and where a free audit would be appropriate.
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Direct download: Employee_Profit-Sharing_to_Incentivize_Your_Agency_Team.mp3
Category:general -- posted at: 5:00am EST