Are you looking for ways to differentiate your agency? Have you considered expanding your agency’s offering with proprietary technology? Today’s guest markets to franchise systems and offers a platform built for their specific marketing needs. It’s a great way to cater to clients’ specific pain points while increasing his agency’s value. He details the unique challenges and opportunities of marketing for franchise systems, the strategic decisions behind developing proprietary technology to better serve clients, and the challenge of getting most clients to adopt this solution.

Alex Porter is the CEO of Location3, a partner agency for multi-unit brands and franchise systems. His agency has been delivering enterprise strategy with local activation for clients and helped them drive digital transformation since 1999. Tune in to gain valuable perspective on growing and scaling your agency and learning how having their own platform has helped them differentiate from the competition.

In this episode, we’ll discuss:

• Finding their perfect niche.
• Marketing to franchises.
• Offering a dedicated platform for franchisees.

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Agency Blueprint: Do you need help accelerating your agency’s growth? If you’re having trouble scaling your agency, maybe you're just too close to the identify areas where you need the most help. This is why we're setting up a free strategy session with our Scale Specialist Darby where he’ll walk you through a framework for scaling your agency faster. Just schedule a chat with Darby – no string attached – at JasonSwenk.com/Darby. Together, you'll figure out your next steps for scaling your agency faster.

Podcast Takeover!!

Get to know your Smart Agency Guest Host: Dr. Jeremy Weisz is the co-founder of Rise25, an agency that helps companies launch and run podcasts profitably. He followed Jason’s podcast and eventually joined the mastermind and has been a guest on the podcast before. Today, he’s helping Jason bring something new to the Smart Agency podcast audience by interviewing a special guest and getting a new perspective to the show.

Why Franchises was the Perfect Niche for This Agency

25 years ago, Alex was ready to go back to college for a PhD in Sports Psychology when he ran to an old buddy who told him the internet was going to be the next big thing. He offered him a job at his startup where he could learn about internet marketing. The appeal of getting very early into something like that was exciting, so he changed his plans and followed his friend and began his career in marketing.

About five years ago, after working for Location3 for many years, Alex and the team decided the agency would focus on the franchise space after one of their biggest clients went out of business. This event led the company to reevaluate their purpose and strengths. They realized they had a strong track record of working with franchise brands and enjoyed the relationships they had built in that industry.

One of the key insights looking into this space was that there were very few agencies specifically catering to franchises. This presented an opportunity for them to differentiate themselves and provide targeted solutions to franchise systems and their individual franchisees.

What It’s Like to Work With Franchises

The success of franchise marketing lies in the mindset of innovation. Alex and the team not only understand the business of their franchise clients but also focus on driving revenue. They constantly test new tactics and ensure that each dollar is spent efficiently.

However, franchise marketing also presents unique challenges, particularly in navigating the corporate versus individual franchisee relationship. Location3 primarily starts at the franchisor level, as they are responsible for assisting their franchisees in their marketing efforts. This why they first take the time to understand how this particular relationship works from a funding perspective in each case and aim to become the franchisors preferred vendor that they will then recommend to franchisees.

In terms of engaging with franchisees, most franchise systems have annual conferences to discuss operations, finance, and marketing. Location3 typically attends these conferences and provide education on new marketing strategies and showcase data-driven results. Throughout the year, they continue to engage franchisees with webinars and information to keep them updated on the ever-changing digital marketing landscape.

Bridging the Tech Gap for Franchise Marketing with Their Own Technology Solution

Franchise marketing is unique in that each franchisee acts as their own Chief Marketing Officer (CMO). The success of their marketing efforts directly impacts their individual lives, making it a highly invested interest for them. Location3 recognized this and developed its own platform called Local Act, which allows franchisees to understand and optimize their local digital marketing efforts.

Through Local Act, franchisees can track metrics such as website traffic, reviews, phone calls, and conversions. They can also analyze the effectiveness of their local marketing campaigns and make data-driven decisions to drive customer acquisition and revenue. The response has been very rewarding.

According to Alex, the decision to build the platform was primarily driven by client demand. Location3 saw there was no existing solution in the marketplace that met their clients' needs. The franchisees wanted their information platformed, and instead of building an Excel dashboard, they saw the value of hosting that data. Additionally, they believed that incorporating technology into their business would increase their company's value and enable them to transition from a services-based business to a technology-enabled services business.

Implementing this technology-enabled service required hiring various roles within their software engineering department, including a database person, a UI (user interface) designer, a project manager, and data analysts and data scientists to help understand and incorporate AI and machine learning findings into their data analysis.

Despite the company's belief in their tool for franchisees to drive customer acquisition at a reasonable cost, the adoption rate has not reached its full potential. This may stem from the fact that some franchisees still rely on traditional marketing methods like direct mail and is something Alex will continue to address moving forward.

Growth Plans: Calculated M&A Pursuits

In terms of growth strategies, Alex is considering the possibility of acquisitions. By acquiring companies that are similar to them but lack the technology platform, Location3 can seamlessly integrate them, further enhancing their services. Additionally, they plan to invest more in sales and marketing to attract more brands and establish more touchpoints with senior leaders in franchise systems. In this sense, they hope to attract more franchise systems with more than 50 locations, with strong management teams, and willing to invest in technology.

As to how they continue to add value for customers, they’ve implemented digital recruitment. Recognizing the hiring challenges faced by their clients, they developed hyperlocal campaigns across search, social media, and retargeting to directly reach potential candidates. This approach allows clients to connect with qualified candidates on a one-to-one basis, rather than relying on expensive job platforms where resumes are sent to multiple competitors. By targeting candidates directly, Location3 has been able to reduce the cost per recruit and successfully fill open positions for their clients.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

Do you have a hard time letting go of agency operations and overall control? Have you embraced your role as the visionary and taken a step back from minor tasks? If you haven’t, why not? Today’s guest realized at one point that autonomy was his personal core value and that his agency would fail unless he prioritized it. This realization led to a new point of view, where he imagines how he would run his agency if he knew nothing about the business. This exercise has greatly helped him detach himself from agency operations and trust the agency can run without him. Tune in for an interesting discussion about autonomy in business, having employees vs. hiring contractors, and the benefits of building a personal brand.  

Nicholas Kusmich is a digital marketing expert who helps businesses rapidly scale revenue using Facebook Advertising. He’s behind the highest campaign ROI's in the world thanks to his “Contextual Congruence”– a proprietary process based on the marriage between direct response marketing and understanding social behavior.

He’s also the founder of H2H Media Group, a paid media agency that has been helping brands be heard since the onset of Facebook. Nicholas shares his journey of starting his agency in 2008 and how he transitioned from being a one-man show to building a team of autonomous contractors.

In this episode, we’ll discuss:

• Strategies vs. tactics to build businesses.

• The power of personal brand.

• Putting autonomy first.

• An exercise to help take yourself out of the equation.

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Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

Long-term Strategies vs. Tactics as a way to Build Business

Back in 2008, Nicholas was told having his own business would require selling an ebook and a course. In order to sell said ebook, he started running ads on Facebook. Once he became good enough, people were contacting him to do these ads for them. Suddenly, he had an agency. Since then, his agency has had the fortune of working with big brands and helping businesses that needed to be heard become brand names.

In the beginning, Nicholas admits he was charging way less than he should have, with an initial fee of $500 a month. However, compared with today’s landscape where you can get offers from people promising to work for free, it seems far more tamed. As an alternative, to get the attention of your first clients, he suggests being clear on what the fees are from the beginning but offering to only charge them after they see results. It’ll allow you to build leverage, get those new clients and not ruin your reputation.

Furthermore, you’ll get much better results by building your reputation using long-term strategies. Instead of emailing a prospect offering to send them a video, create 10 custom videos that offer value and send them over a certain period. You’ll be much more likely to get their attention and start a conversation. For Nicholas, “strategies build business and tactics make sales.” Yet everyone in the business seems to be using tactics.

Too many marketers are constantly chasing the latest trends in an attempt to capture attention and make quick sales. To some extent, of course it makes sense to always be aware of new developments and using new technologies. However, the consistency and focus on long-term strategies is what will allow you to build a successful business.

Recognizing the Power of Building Your Personal Brand

Nick, unintentionally, built the agency’s brand around himself and his knowledge. Now he’s spent the last few years pushing off the notion that working with his agency means working directly with him. In the beginning, he was very much the button pusher, running the ads himself and taking sales calls. However, he realized he wasn’t living the entrepreneurial dream he’d wanted and was burned out and stressed. Learning about Dan Sulllivan’s unique ability principal, he realized real growth and development would only come by surrounding himself with people with their own unique abilities. These people would then take over every other tasks outside his specific expertise.

Next, it was time to build his brand, but was it better to build his own or the agency brand first? It seems no one can agree on whether it’s best to develop your personal brand or agency brand first. But we can all agree on this: personal brands are very powerful. Logan Paul and KSI took out heavy hitters like Coca-Cola not because Prime is the best energy drink in history but because they had really strong personal brands.

No one wants to engage with a brand, they want to engage with a human being. Nicholas recognized the value of his personal brand in attracting clients. His unique point of view on acquisition and advertising strategies is what sets his agency apart from others. In essence, your personal brand is something that will stay with you for years to come. Will you also need to build a separate agency brand? Yes, because that’s maybe something you’ll sell or license down the line while you keep the personal brand you’ve worked hard to build.

Establishing Autonomy as a Core Value in His Agency

Nick strongly believes in upholding autonomy as his number one value in all aspects. Going against this, he says, would only bring frustrations. This is why he set out to create a business where he would either not have employees or strictly hire autonomous individuals who don’t need to be micromanaged and know how to take initiative.

Taking this step felt simultaneously liberating and like he was going against industry standards. He felt like team culture was very important for owners but something that went against his sanity overall. In the beginning, he admits to going too far with this approach, diving so much into autonomy that he ended up being a bad leader. It was one thing to give people space to operate and a very different one to feel disconnected from his team. He had to go back and bridge that gap.

In the past, having employees had been a source of pressure. Therefore, he set out to look for specific team members who value autonomy and initiative just as much as he does. This approach has worked out well for him. Of course, working with contractors has its down side but it’s what is right for him.

It’s a vision that a friend of his called “netting up”, which means maintaining his net revenue while working less and having fewer employees. Importantly, Nick always had a vision of building the agency as a lifestyle business. Diving deep into building an agency where he could maintain his autonomy was his way to continue to scale the business on his terms.

An Exercise to See the Benefits of Taking Yourself Out of the Equation

For Nicholas, many agency owners find it hard to give up full control of their agency’s operations and sales because they started the business as a skilled person working by themselves. If you have the skill and do the work, when it comes time to hand that work off chances are you’ll think “I can do it better!”

An interesting exercise for these cases is to imagine how things would be if you started a business you knew nothing about. In this hypothetical case, you wouldn’t build the business around yourself but rather hire great people to execute the business while you come up with strategies in your visionary role. It’s an exercise that helps agency owners detach themselves from their business allow them to reach new heights by taking themselves out of the equation.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

What does it take to succeed in business, especially in the agency world? How do you surround yourself with the right people who can support you, challenge you, and help you grow? How do you overcome the obstacles and fears that may hold you back from achieving your goals?

Today’s guest is an agency owner who shares his personal experiences of being in both conducive and detrimental social circles and highlights how the latter can negatively impact one's mindset and success. His philosophy underscores the importance of having a balanced perspective by interacting with people at different levels – those who are less experienced, peers, and more successful individuals. Tune in to learn about how surrounding yourself with the wrong people can leave feeling stuck and miserable, the fallacy of comparing yourself to others, and the importance of finding a community that will help you reach new heights and keep you accountable to your goals.

Ian Garlic is a marketing expert specializing in video marketing and storytelling. He is the founder of video marketing agency authenticWEB and is the mind behind Storycrews. He also hosts The Garlic Marketing Show, is part of the team at Video Case Story, and consults on video shoots. Ian known for his profound insights and innovative approaches in the digital marketing landscape. His journey in the industry is marked by a deep understanding of the intricacies of business growth, particularly in the agency sector, and a passion for helping businesses harness the power of effective storytelling in their marketing strategies.

In this episode, we’ll discuss:

• Curating your support system.

• Overcoming the barrier of overthinking and self-doubt.

• Choosing the right group for you.

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Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

Who’s In Your Corner? Curating Your Support System

Agency owners everywhere find themselves chasing the wrong yardstick, pushing relentlessly toward finish lines not their own. Gripped by others’ narrow definitions of success, they wake one morning in quiet panic.

The team too often hears from agency heads who built ventures according to the “right” metrics. Yet after reaching a certain level of success they find themselves stressed out and disillusionment sets in. Soon enough, they start thinking about selling because of how unhappy they are.

Ian knows that pain firsthand. Surrounded by big league players, he pushed his agency to serve ever-larger corporations. But in that quest for status, the work lost meaning. At a point, he felt far removed from the local businesses he set out to empower.

It was time for a change. He needed his own definitions, his own scorecard - rooted in his values rather than others’ demands.

If you find yourself chasing ideas of success that don’t fit with your values, look around and evaluate if you’re surrounding yourself with the right people. For Ian, being in the wrong group, even if technically you’re surrounded by very successful people, can have a negative effect on one's confidence, motivation, and performance.

By contrast, the right people will offer support and help you find the right answers. In this sense, Ian speaks about the importance of being with people who are at different levels of success - below, at the same level, and above you - to ensure a balanced perspective and growth.

Peers at all stages can become guides or critics. Just take stock of those given VIP access to your mind. Do they fill your cup or drain it? Nourish dreams or deflate them? With perspective, those draining more than giving face demotion.

Shortcutting Analysis Paralysis Through Shared Perspectives

As agency scale specialist, Darby speaks with many agency owners every week to help them come up with growth strategies and keep track of their goals. In this role, he has found that overthinking is a common barrier for agency owners that can lead to analysis paralysis, where one gets stuck in indecision and inaction. Making decisions is tough, and agency owners can fall in the trap of seeing all the angles and choices, which leads to worrying they’re making the wrong move.

He recommends seeking a supportive environment, such as a mastermind or a support group, where they can get feedback, advice, and accountability to help them make decisions and move forward. On your own, you may get too deep into what you’re trying to do and give up before giving yourself enough time to find the right way.

Having the right people to support you can help you transform not only your business but also your mindset. You’ll learn to receive feedback, which can be hard but is very important to get out of your own head and see things from a different perspective. Like most things, it takes practice, and being in an environment where you frequently get feedback will help you build that muscle.

Maybe you feel it’s not something you need right now but it will surely become important at some point in your growth. Anyone that says they succeeded completely on their own is either lying or in denial. After all, some of the most successful people out there couldn’t have made it without the right support system.

How Do You Know if a Group is Right for You?

You may find it takes a few tries to find the right community or group for you. It’s not just about getting to share your struggles, you also need to feel challenged. If you’re the smartest person in the room and everyone there thinks everything you’re doing is great, you’re probably in the wrong group. Do you feel good about what they’re doing and how they go about things? Do you like being around them? Are they going in the same direction you want to go?

Furthermore, look for a group with people who’ve already faced the challenges you’re currently facing. If you’re working on scaling your agency past eight figures and are currently in a group where no one has done that then can they really help you get there?

It all goes back to what you want to do and who you are. If you’re trying to build an agency, then you shouldn’t be in a general marketing group. In his case, Ian prefers groups that are not just money motivated but also think of the bigger picture.

It’ll take work to find your “pack” and you may even find that it changes over time as you evolve and go through stages. Maybe you’ll hit a stage where you want a lifestyle business and seek out people with the same goals. The important thing is that you understand what you want and what you’re going after at the moment.

Think of a Mastermind as an Investment in Your Growth

Focusing on relationships that better you as an agency owner and a person will be a huge step in your growth journey. Join a mastermind, start a mastermind, and figure out the groups you want to be in. You won’t necessarily get it right the first time, but it’s an important investment in the future of your business.

Start by getting clear on what you want and why you want it and, define what success looks like to you. Then push yourself to look for a community that will help guide you in the steps you need to get to that success.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

Have you considered bringing on a partner to lighten the immense pressure of solo agency leadership? Do fears around lacking key skills or experience hold you back from taking the entrepreneurial leap yourself? When today’s guest launched his first agency, self-doubt around “going it alone” led him to take on a co-founder partnership. But without aligned goals from day one, hairline fractures quickly formed.

As their once amicable agency grew and priorities diverged, he outgrew the partnership and they went their separate ways. In this interview, he’ll talk about why he didn’t go into a partnership for the right reasons, how the dynamic between he and his partner worked, and how they went about the adjustment process after the split. Tune in if you’re an agency owner trying to figure out whether a partnership would be right for you.

Rob Rosasco is the founder and driving force behind Too Darn Loud Digital Marketing, a boutique agency that specializes in assisting law firms to amplify their presence and reach. Rob reflects on his early days in the industry, his eventual venture into starting his own agency, and the initial fears that led him to start his business with a partner. He goes into the dynamics of the partnership and how eventually he found himself outgrowing it, both professionally and in terms of the vision for the company.

In this episode, we’ll discuss:

• Building an exit strategy after outgrowing your partner.
• Dividing the agency when selling is off the table.
• Preparing an ironclad clause for an agency partner breakup.

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Gusto: Running payroll and benefits is hard. Especially when you’re a small business. Gusto is a tool that helps make payroll, benefits, and HR easy for small businesses. You no longer have to be a big company to get great technology, great benefits, and great service to take care of your team. For a limited time, Gusto is offering a deal to Smart Agency Master Class listeners. Check out Gusto.com/agency for 3 months FREE once you run your first payroll with them.

Outgrowing Co-Founders: Building Exit Strategies into Agency Partnerships

After working for a larger company in the legal marketing space for eight years, Rob felt starting his own business would be a natural transition. His journey into entrepreneurship began with a mixture of ambition and caution. Initially hesitant to venture solo into the competitive arena of digital marketing, he decided to start his business with a partner. This decision, born out of a desire to mitigate the challenges of launching and running a business independently, marked the beginning of a significant phase in his career.

At the heart of Rob's professional expertise is a profound understanding of sales and client engagement, a skill set essential for the growth of his venture. Despite his extensive experience, he recognized the need for support in areas like back-office operations, web development, and SEO. So he resolved to partner with someone who could complement his skills and share the entrepreneurial journey.

The relationship worked exactly as he had envisioned for a while, with his partner working his excellent selling skills to get clients while Rob ran the business. As the business evolved, Rob found himself at a crossroads. Both he and the agency outgrew his partner who got comfortable staying at a certain point in terms of growth. After seven years, the differing visions and philosophies between him and his partner necessitated a reevaluation of their partnership. However, their operating agreement did not include language for this specific situation where one partner was dissatisfied with the other’s contribution.

Rob's experience is not just a tale of business strategy and partnership dynamics; it emphasizes the importance of having clear terms in any business partnership, especially provisions for situations where partners may need to part ways due to divergent goals or strategies.

When Selling's Off the Table: Divvying Up Split Partnerships

Not all partnerships have to end this way. If you have a business partner and are thinking about parting ways, think hard about whether you have irreconcilable differences or just need to make a few changes. Having fundamental differences in your approach to the business, vision, and philosophy is very different from just needing a new role. If you do decide you just don’t see eye to eye in the business anymore, then it’s better to part ways sooner rather than later.

By the time both partners accepted it was no longer working out, they considered different options like splitting or one of them buying the other out. Selling the agency seemed like a possibility in the beginning, having already received some decent offers. However, Rob and his partner couldn’t agree on what constituted a fair amount.

Rob pushed to buy his partner out to have the company as a whole, but it wasn’t possible. Since neither of them wanted to sell, it came down to splitting their customer base down the middle. It wasn’t what he wanted, but it was the solution that ultimately avoided a long legal battle.

Preparing for Bitter Ends: Ironclad Clauses & Agency Breakups

After the split, Rob and his former partner were able to chart a new course through thoughtful negotiation. With the client base divided 50/50, it was time to also decide who their employees would continue to work with. Four of their employees went to work with Rob while another two split their time between both as they went through the transition. As to their clients, they were informed as soon as the deal was made. However, it would be another four to six months before they’d see real changes like new bank accounts and invoices. Overall, it was a very successful transition, considering they didn’t lose neither clients nor team members in the process.

Golden Nugget: While their approach went smoothly, the experience revealed gaps in his agency legal safeguards. When co-founders part ways, air-tight client contracts become essential. Specifically, it’s important to include a clause in your client agreement clarifying you can transfer those contracts in case of a sale.

For context: smaller agencies (under $5M revenue) typically transact as asset sales. This means the buyer purchases all client contracts and can onboard accounts without seeking added approval.

But without explicit clauses permitting easy account transfers, securing signatures of dozens (or hundreds) of clients amidst an agency sale sounds nightmarish. As does trying to exclude accounts unwilling to switch over.

Come sale time, this clause spares chaotic scramble to confirm who stays and who goes. The buyer inherits your book of business cleanly. No need to parse accounts in the midst of a turbulent ownership shuffle..

It may feel premature early on, but it ultimately provides flexibility to pivot strategically as your agency evolves. Whether a bitter founder split or lucrative acquisition offer, you dictate the terms without complications.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

Are you getting ready to sell your agency? Are you looking into potential buyers? How will you protect your interests in an M&A process? Today’s guest has a lot of experience, and even a book, in this area having sold the same agency twice and coming out mostly unscathed from the initial failed deal. He’ll share some of the good, the bad, and the ugly aspects of selling your agency and the challenges of managing a large agency team. Tune in to gain valuable insights on navigating the process of selling your agency.

David Rodnitzky is a digital marketer who started and later sold 3Q Digital, a team of 500+ rockstar/ninja/guru online marketing pros who offer expertise in online analytics, decision science, strategic consulting, creative, and conversion rate optimization. He also founded Agentic Shift, a boutique consulting firm dedicated to helping agency founders successfully exit their businesses through mergers or acquisitions (M&A).

Recently, David poured all his M&A expertise into his new book, Selling Your Marketing Agency, which you can get on Amazon.

In this episode, we’ll discuss:

• The Key to managing an agency team of over 100 people.

• An ironclad acquisition contract clause that will save your agency.

• Lessons to help you avoid pitfalls in the M&A process.

Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

Accidental Agency Owner in Search Engine Marketing

According to David, he sort of glammed into the world of search engine marketing after started in digital marketing in 2000. He worked at a series of startups in Silicon Valley, for about eight years and moved on to a company where he found the culture was not one he agreed with. He was traveling to India three times a year to manage a team while his wife was pregnant and decided it was not a smart family decision. So he quit and set up shop in a coffee house in Pacifica, California.

Soon people started calling him to help them with search engine marketing consulting and he had an agency. That agency Today is 3Q Digital, part of a bigger organization called DEPT.

The Key to Managing Over 100 People: Maintaining Consistency of Quality and Processes

For David, it’s a lot harder to go from managing two people to 25 people than it is to go from 25 people to 100 people. No individual can manage hundreds of people. You can only dedicate so many hours per week to checking in with your team. In this sense, he has learned the importance of maintaining consistency of quality when it comes to the people he hires, as well the importance of processes.

Most agency owners would agree it's relatively easy to manage and monitor two or three employees and make sure that they are doing a great job. However, the more people you hire, the more you have to delegate that responsibility and the less you sort of know about how well your team is performing. So David has learned to remain constantly obsessed with quality on the team.

As to delegating, processes will be key to maintaining quality, and unfortunately, most agencies don't have many processes. At David’s agency, when a client is onboarded, the success or failure of that client is based on the person assigned to that account. The results could vary since everyone has their unique ideas. That’s why you’ll need a solid process to ensure consistency because you can't have a brand without consistent results.

An Ironclad Acquisition Clause to Save Your Agency from Ruin

Initially, David wasn’t planning on selling his agency, until the offers came pouring in unsolicited. So he hired an investment banker to keep track of these inbound leads and screen them to determine which ones were legitimate buyers.

At this point, David decided to do a "mini process" where he sent letters to some potential buyers hoping to get official offers. The idea was to create a competitive environment and increase his company’s perceived value. The result was three great offers with one clear winner. This offer was a lot higher than David had expected, as its owners were bent on buying an agency. In the end, they took the offer for $30 million in cash and $35 in an earnout over three years.

But business veterans know big payouts often come with equally big headaches. So before ink hit paper, David negotiated an ironclad clause: until the full earnout paid out, he would retain absolute authority on all agencies like finances, sales, and hiring. Furthermore, if the company failed to meet the initial terms David would have the option to buy the agency back. He’d soon confirm adding that clause was the right decision.

Earnout Loopholes and Buying Back the Agency to Rebuild

Under the deal signed with their new parent company, David would get his earnout if he managed to double the agency’s revenue in three years. They had to get from $17 million in revenue to $35 million in three years. Looking back, David believes the buyers didn’t think they’d be able to do it. However, after about a year and a half, it became clear the agency would reach that goal.

Unfortunately, the parent company was now facing some economic struggles and it became clear they’d be unable to pay the $35 million. This led to a second process that was the opposite of the first one. With their parent company struggling and trying to sell just two years after acquiring them, no one seemed interested in buying.

Finally, saving his agency came down to securing a $5 million loan to buy it back. Under this deal, they would give the parent company $5 million in cash immediately and remove the $35 million debt obligation, to which they agreed.

David took the company back and focused on scaling it and nine months later he got purchase offers once again. In the end, he sold under a traditional private equity deal.

More Lessons on the Agency M&A Process

Having sold his company once, David was prepared for the push and pull of negotiations and figured he’d had to make some compromises. He focused on making sure his interests were protected after the deal was done. “People are very nice during the M&A proves, but afterward it’s the contract that speaks,” he says.

Whatever the negotiation point you want to secure, David recommends getting it in writing. You’ll occasionally see a different side of people when money is involved, which is why he recommends working with people you trust and hiring the best lawyers you can. You can’t anticipate any wrongdoings, but you can protect yourself to the best of your ability by looking at every corner case before the deal is signed.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

Are you paying attention to the changes AI is bringing to the agency world? How have you been finding ways to incorporate it to streamline processes? Would you consider hiring a dedicated innovation role to keep track of these technological advances and not fall behind? Today’s guest has been in the industry for over 20 years but has been active in staying on top of new technological developments that will change how marketers operate forever. He’s actively testing new uses for AI and working to keep his team excited about learning everything they can about these developments. Discover why refusing to learn and adapt will leave your agency in the past and the importance of a good AI prompt to get the best results.

Jeff Lizik is the president of RedShift Digital Marketing, an ROI-focused business that defines itself as more of an “anti-agency”. His team promises to increase clients’ visibility, boost website traffic, and grow their business while building real relationships that will impact their businesses.

Jeff shares how his accidental success as a paintball retailer led to his venture into the world of digital marketing. He also dives into the challenges he faced with Google's algorithm updates and highlights the need for agency owners to be versatile and adaptable in a constantly evolving industry.

In this episode, we’ll discuss:

• The power of an expertly crafted AI prompt.

• Will you eventually need a director of innovation?

• Why you should hire highly skilled talent sooner rather than later.

From Accidental E-Commerce Success to Leading a Top Agency

Jeff found accidental success in the e-commerce industry in 2001 selling paintball supplies he got on eBay. Within a year, he had sold a million dollars worth of products and became the second-largest paintball retailer globally. At one point, he even participated in the beta testing for third-party selling on Amazon.

After his e-commerce venture, he initially decided to take a break and go back to a corporate job. It didn’t last long though; once he missed the entrepreneurial lifestyle, Jeff started building affiliate sites and was making more money than before. However, once Google implemented the Penguin update, all its sites plummeted in search rankings. Unwilling to rebuild the sites, he decided to start his own agency instead.

How Technology Has Transformed and Continues to Transform Marketing

With over two decades in the agency business, the main changes Jeff sees are powered by technology; nowadays there are very efficient tools that have helped marketers improve their jobs.

According to Jeff, technology has made marketers more efficient and effective in their strategies. Search engines, particularly Google, have evolved to become more complex. Everything about Google's search results has changed, such as the placement of ads at the top and the decrease in organic search visibility.

But most people now rarely use Google for searches and instead rely on YouTube and other platforms. Hence, videos have become more important in the decision-making process and social media platforms such as Instagram will play a larger role in driving consumer behavior and sales.

On the other hand, nothing is as simple as 20 years ago. Back in the early 2000’s marketers could still scam the search engines. That’s not possible nowadays, so you have to be good at your job. And we’ve yet to see the full impact of artificial intelligence (AI) on the industry, probably the biggest transformation marketers will go through.

The Power of an Expertly Crafted AI Prompt

By now we should all understand there are potential dangers associated with AI, which is why its use should go hand in hand with human oversight and the correct prompts. There’s always the possibility the AI is giving you false information. Treat it as a tool, not a replacement for human expertise and judgment.

AI prompts are powerful tools that have the potential to revolutionize the way marketers approach their work. They can significantly enhance productivity and efficiency by streamlining processes and reducing time spent on tasks.

When it comes to creating the perfect prompts, there are already services that create these prompts for you, which not a lot of people know. These premium prompts are built by experts in the field and provide complete context and background information, ensuring that the AI understands the desired output accurately. By investing in advanced prompts, marketers can gain a deeper understanding of AI capabilities and maximize its potential.

In his case, Jeff works with very detailed prompts that produce very efficient results. How does he use this tool? After uploading detailed information about his agency and the type of clients they work with, he uses AI to create different personas and works through that until he gets one ideal customer profile. He then asks the AI to create headlines based on this customer’s pain points, as well as ideas for every social media platform. In detail, he’s experimented using AI for several areas and can confidently say he can use it for content strategy, lead generation, topic ideas, and lead magnets, and has continued to fine-tune it to get more efficient results. Done correctly, AI prompts can be a marketer's best friend.

Why AI Implementation Will Eventually Require a Dedicated Role

It can be tricky to get your team excited and comfortable using AI. They’ve been doing things a certain way for so long that they may be wary of so many changes. Jeff is slowly turning this around by offering individual members tips and ideas for how to use their prompts and save time. Furthermore, he’s also pushing for them to learn all they can about AI and its uses. Eventually, he plans to record SOPs from which they’ll learn the processes he’s currently figuring out. However, information about AI changes constantly, so he’s been holding off on doing that for now.

One important aspect of the future implementation of AI use in his agency will be hiring a dedicated role responsible for overseeing its implementation and maximizing its potential. Ideally, this role would be tied to all kinds of technological developments changing the industry, rather than just overseeing the use of IA prompts.

This director of innovation would be responsible for staying ahead of emerging technologies and trends. They would be tasked with identifying opportunities for implementing AI in various facets of the agency's operations and developing standard operating procedures (SOPs) to guide the team in utilizing AI effectively.

AI is set to become an integral part of the agency business, which warrants dedicated attention. In this regard, having someone in this role full-time will be crucial for potential cost savings and efficiency gains.

Why You Should Hire Highly Skilled Talent Sooner Rather Than Later

At this point of their agency growth, there are some roles where Jeff and his partner look to hire people with the highest skill level possible. They no longer have the time to teach them and mold them into the role.

In the past, hiring people who don’t have the capacity needed for the role has burnt them and made the agency worse. Team loyalty is important, of course, but Jeff now recognizes the need to prioritize the agency's growth and success. In a sense, he recommends holding people accountable. Once you do that, they’ll either step up and become great in their role, or they’ll see themselves out.

Knowing how having highly skilled team members can significantly contribute to the agency's growth, Jeff wishes he’d invested more in talent since the beginning. However, after the pandemic, hiring outside your state and even your country has become much more common. This has opened many more options when it comes to finding talent. Hence, newer agencies are coming up in a new landscape where they can much easily find the best talent for their needs.

Don’t Fall Behind, Pay Attention to Coming Changes

If you’re not learning about AI and testing the many ways you could be implementing it in your agency, what are you waiting for? Way too many people in the agency industry are ignoring AI. Make no mistake, if you don’t adopt AI, you will be left behind. By the time the agencies not paying attention to the impact of artificial intelligence start to pay attention, it’ll be too late.

Additionally, with the rising prices of Google ads and Facebook ads Jeff he also encourages agency owners to think about the future. What if the search is no longer affordable for your clients? How will you get eyeballs on your client’s products and services? Options like video content and podcasts will be game-changers and we should all be on the lookout for more of these options before we’re blindsided by reality.

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

Looking to dig deeper into your agency's potential? Check out our Agency Blueprint. Designed for agency owners like you, our Agency Blueprint helps you uncover growth opportunities, tackle obstacles, and craft a customized blueprint for your agency's success.

Jason Swenk and Manish Dudharejia delve into the world of agency management and business scalability, shedding light on the complex yet rewarding journey. They explore how past challenges can be transformed into valuable lessons for growth, highlighting the indispensable roles of continuous innovation and strategic thinking. Through their discussion, they unravel the subtle differences that set exceptional work apart from the average, offering listeners practical insights to propel their own business ventures toward unparalleled success and distinction.

Manish reflects on the evolution of a growth-obsessed mindset, both personally and in business, acknowledging past mistakes as pivotal learning experiences. He shares his journey from conventional lead responses to a more focused, core-driven approach, underscoring the value of adapting and evolving business strategies over time.

00:00:00 - Opening Insights: Navigating Agency Management Mastery

00:01:23 - Introducing the Visionary: Insights from Manish Dudharejia

00:03:38 - Agency Growth Uncovered: Planning for Scale and Success

00:04:27 - The Power of Reflection: Innovating for Business Breakthroughs

00:06:46 - Transformative Decisions: How Past Lessons Shape Future Success

00:08:57 - Strategic Focus: The Key to Business Acumen and Achievement

00:10:43 - Pursuing Excellence: Elevating Business Practices to New Heights

00:18:58 - Concluding Wisdom: Summarizing Game-Changing Strategies

00:20:09 - Final Thoughts: Wrapping Up with a Special Opportunity

Resources: https://e2msolutions.com/smartagency