Ep 124: Agencies need to focus on this in 2023

03-02-2023 • 39 minutos

Subtitle:

2022 flew by and 2023 is here. That means it’s time to reflect on 2022 and what you want to change for yourself and your business in 2023. In today’s episode, we break down our goals, predictions, and thoughts for 2023 along with what we think all agencies should focus on. We talk about profit, efficiency, value, processes, Severance, shooting for the stars, and more on this week’s episode. Let us know your thoughts, goals, or questions in the comments below.

Summary:

In this episode, we discuss our goals, ideas, and theories for 2023 along with some changes we will be making in our businesses. Each agency is unique and has different strengths, yet there are a few things we all could be doing to improve and spark change in the coming year. The first of these being focusing on and prioritizing profit. Profit is mistakenly viewed as greed driven or selfish when it is often in fact the opposite. In order to serve your customers well, you have to be able to fund ways to do that, this is where profit comes in. Most midsize agencies make around 15% of profit per year, and small agencies make around 10%. This is simply not enough to successfully run a business and allow for growth and investment. Profit also ties into efficiency and value. Profit is based on value, and value requires efficiency. So in order to increase your profit, you need to evaluate and improve your efficiency and improve the way you communicate your value to your clients. This is where mindset comes into play. You have to believe that you have earned your profit and that what you have to offer is valuable. It’s also crucial to recognize the importance of processes and evaluate how you can implement them to create more efficiency. We also talk about the advancement of technology, what that looks like, and what that means for agencies moving forward. It’s important to identify your ‘Lego blocks’ and improve your attribution.

Top 3 Curtain Pulls in this episode:

Focus on profit. One of agencies’ most common misconceptions is that high profit is for the greedy and selfish. This is due in part to agencies’ low profit and their mindsets. Instead we must understand that profit is not greed, but instead a tool for our businesses to better serve our clients and employees while also growing and investing in the future of the business. “Unhealthy, low profit businesses don't help anybody, not the people that work for them, not the people that own them, not the people they serve.”

Improve efficiency and the ways you communicate value. Profit is built upon value, so one of the ways to increase your profit is to communicate your value in a creative, meaningful, or practical way. Value is due in part to time and therefore efficiency. Value, profit, and efficiency are all tied together, so by strengthening one, you inadvertently strengthen all three. “It's important for agencies, especially smaller ones, to understand that profit is based on value.”

Change your mindset. Many agencies view themselves as service providers when in fact, they are media companies. Because they view themselves in this way, they often fall into the trap of validating themselves through busy work. To avoid this, agencies need to shift their mindset to one that shows that they are media companies, and that profit is a way to better serve their clients due to the high value they as an agency produce. “You need to shift your thinking from just being a service to seeing yourself as a media company.”

For more tips, discussion, and behind the scenes:

About The Guys:

Bob Hutchins: Founder of BuzzPlant, a digital agency that he ran from from 2000 -2017. He is also the author of 3 books. More on Bob:

Brad Ayres: Founder of Anthem Republic, an award-winning ad agency. Brad’s knowledge has led some of the biggest brands in the world. Originally from Detroit, Brad is an OG in the ad agency world and has the wisdom and scars to prove it. Currently that knowledge is being applied to his boutique agency. More on Brad:

Ken Ott: Co-Founder and Chief Growth Rebel of Metacake, an Ecommerce Growth Team for some of the world’s most influential brands with a mission to Grow Brands That Matter. Ken is also an author, speaker, and was nominated for an Emmy for his acting on the Metacake Youtube Channel (not really). More on Ken:

Show Notes:

[1:05] Bob opens this week’s episode with a chat about how the meaning of phrases or words change over time due to new societal context.

[3:00] Brad talks about the importance of having a holistic and balanced life and how work can, “disconnect us from who we are”.

[3:24] Ken says that, “there's no such thing as business life and personal life.” but we often separate the two mentally.

[7:09] Bob asks the guys about their thoughts, and predictions for 2023 and any goals or changes they’ll be making in their businesses.

[7:34] Brad talks about some of his new focuses for his business in 2023. “We are focusing a lot more on new business development, looking at our processes and services and really challenging what we do, making sure that our clients get the best value, but also that we are competitive, really offering value where our customers can't find that easily, and looking at our current customers and trying to figure out how do we serve them better?”

[8:24] Brad dives more into serving his current customers better and his ideas on how to do that. “We are shifting our models, diving into our sales data to understand where our key profit centers are, and trying to package a little bit more of our services in a way that is more better clarity. We've hired somebody to kind of spearhead that, a Director of Client partnership, and just really understanding, you know, where our sweet spots are trying to dive into that further.”

[9:43] Ken talks about an analogy he uses to identify and create replicable things to sell.

[11:01] Brad mentions the importance of recognizing, “processes run your business and people run the processes”.

[11:52] Ken discusses his thoughts for 2023 regarding the importance of profit and how that enables you to serve your clients. “A lot of people associate profit with greed. And if I have a high profit, my clients won't be happy. That is a common misconception; it's the exact opposite.”

[12:59] Ken says that, “10% profit margin margin is not enough to run the business. Any MBA will tell you and the standard is around 30%.”

[15:00] Ken elaborates more on profit and its relationship with efficiency and value.

It's important for agencies, especially smaller ones, to understand that profit is based on value…Agencies tend to validate themselves with busy work more often than other businesses…Unhealthy, non profitable, low profit businesses don't help anybody, not the people that work for them, not the people that own them, not the people they serve.”

[18:27] Bob talks about changing our mindset and beliefs of profit to one that allows you to, “learn how to charge more and realize I'm going to be able to serve my clients.”

[20:30] Brad applies the adage, “when you shoot for the stars, at least you’ll land on the moon,” to setting goals for and dreaming about your business.

[21:51] Ken talks about the role of your inputs and how that impacts your ability to shoot for the stars. “Whatever star you're hitting, is probably in line with the inputs that you have.”

[22:22] Ken asks a few questions that all agencies should be asking themselves in order to prompt a mindset change that will help them to begin to pursue their big goals.

[27:10] Brad discusses the importance of presenting value in a creative way or a way that makes sense, and uses an example from his business recently to demonstrate its importance.

[29:37] Bob breaks down his thoughts and predictions for 2023 including technology’s advancement, smaller agency sizes, and understanding your business’ attribution, and how these things will impact agencies and what agencies of the future will look like.

[33:58] Bob also talks about blockchain being integrated into marketing, data integrity, investing in technology, the commoditization of services, and changing your mindset of being a service to being a media company. “You need to shift your thinking from just being a service to seeing yourself as a media company. Some of that might be print, some of it might be intellectual. But 90% of what we do is we create media.”

[38:41] Ken summarizes this episode with three key points for agencies to focus on. “Focus on profit, focus on efficiency, focus on value.”

[38:48] Brad wraps up by saying, “If you guys have any questions, or if you guys are doing things this year in your business, reach out to us.”