Surviving A Merger: How to Safeguard Your Digital Agency and Team

Do you have trusted referral partners? Every considered merging with an agency partner? A merger can be a good way to expand your service offering, but surviving a merger is a whole other thing. The right partner gives you access to highly skilled professionals, more creative ideas, and proven methods to maximize success. Today's guest found a great, longtime partnership. However, when it came time to merge their agencies, both opted to maintain ownership of their individual entities. He explains the thought process behind this decision and the road that led to his eventual acquisition.

Gus Wagner is the president and owner of The Rocket Group, a full-service agency based in Missouri. In its long history, the agency has worked in all sorts of different sectors with businesses, organizations, and nonprofits; focusing on government communications and politics. Established as a virtual organization since its beginnings, the agency has always worked with independent contractors to help build and perform their client marketing tools and activities. For this episode, he recalls his agency journey and how he and his partner decided to set up a separate agency to work together and not lose control of their individual businesses.

In this interview, we’ll discuss:

• Protecting agency ownership when collaborating with a partner.
• Should you sell your agency to a competitor?
• When and how to announce an agency acquisition.

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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 of their process and their large pool of crowd-sourced writers.

 

In 2001, Gus, a sales and marketing manager for different manufacturing companies, quit his job and decided to start his own agency. After 21 years of working with The Rocket Group, he had completed numerous opportunities and projects, specializing in tools to help his clients communicate online and in the real world with their customers and prospects. Gus is also a certified social media strategist and enjoys training interested parties in these ever-changing modern communication platforms. Over the years, he has made valuable strategic partnerships, with some colleagues working with his agency for more than 5 years. On a daily basis, his agency works with 19 state associations, 200 individual member public utilities, and one national organization.

Protecting Agency Ownership While Collaborating with an Agency Partner

However, there was a time when Gus decided to set up a separate agency to protect ownership of his original business. This happened when he officially formed an agency partnership to maximize his success. Instead of merging their agencies, they created a third entity owned by both of businesses. Whether because of different industry niches or partners who didn’t want to get too involved in the entire agency’s operation.

Many agency owners are always networking and passing business back and forth but keep their businesses separate. In fact, clients are often aware of this. For Gus and his partner, it was a case of simplifying things for the clients. This way, they would have to deal with one entity instead of two.

It seemed like the best way to go about these partnerships since Gus also didn’t want to sell a piece of his agency. This is because many businesses don't want to give up ownership of their organization, especially to someone they don't trust. When it comes to selling your agency, there are many things to consider, such as your employees, clients, and the value of the agency itself.

Should You Sell Your Agency to a Competitor?

If you decide to sell, it's important to make sure that the buyer is someone you trust and that the process is done right. In Gus's case, he was approached by a competitor who wanted to acquire his organization. They accepted and closed the deal in March 2020. The buyer was a known competitor who had been working with the same pool of clients for some time. It was a smaller agency trying to win social and digital campaigns for public utilities. They were trying to do it differently and weren't being very successful with that client base. They were put in touch by a client who had worked with both and they got to compare strengths and weaknesses. The conversation grew from there.

At that time, Gus’s agency was growing more than he and his partner were comfortable with. Hence, it was attractive for them to form a larger structure to take over that growth. It took about six months from the initial conversation to signing the paperwork and making the announcement.

How and When to Announce an Agency Acquisition

Announcing an agency sale can be challenging as clients may assume the services will quickly lower in quality. However, if you wait until they have positive comments about the service to announce the sale, they’ll see there was nothing to worry about. In Gus’ case, the buyer was excited about the purchase and the new capabilities it brought for their agency, so they made the announcement right away.

Gus has been in this industry for over 21 years with The Rocket Group and about 15 years before that. He advises keeping things simple, keeping your eyes on the prize, and keep moving forward and upward. He also emphasizes the importance of protecting ownership of your agency, which he did by setting up a separate agency and forming agency partnerships. This way, you can maximize your success without giving up control of your original business.

 

Do You Want to Transform Your Agency from a Liability to an Asset?

If you want to be around amazing agency owners that can see what you may not be able to see and help you grow your agency, go to Agency Mastery 360.  Our agency growth program helps you take a 360-degree view of your agency and gain mastery of the 3 pillar systems (attract, convert, scale) so you can create predictability, wealth, and freedom.