About This Episode:
In this episode of The Agency Profit Podcast, we invited Troy Wruck, GM of Services at Vendasta to discuss how he runs and scales one of the fastest-growing white-label service teams in Canada. We talk about people, processes, metrics, scaling and everything in between. You won’t want to miss this episode.
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Timestamps
Valuable Insights and Questions from this Episode:
- Introduction – 0:08
- What is Vendasa? – 2:20
- The Importance of Excellent Whitelabel Delivery Team – 4:00
- Creating and Documenting Services/Processes – 5:55
- Keeping a Small and Effective Team – 8:32
- Ensuring the Team and Processes are Up-to-Date – 9:25
- How Does Process Improvements Work? – 12:00
- How to Add New Services Successfully – 14:42
- Ensuring Your Team’s Quality of Work – 18:32
- Scaling and Managing Your Team – 27:11
- Hiring Process – 31:00
- Creating Trust Within Your Team and Letting Go of Control – 34:00
- Importance of Reporting and Data – 39:34
- Conclusion/Outro – 42:55
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The Secrets to a Successful Agency
Being witness to the rise and fall of multiple agencies (and the success of Vendasta), we asked Troy about the qualities of successful agencies and what makes them different from those who failed.
According to Troy, it all boils down to being able to offer what your customer needs. As an agency, it should be your goal to understand the pains and goals of your customers. You should be able to create a service for that customer that addresses all those points. Also, it helps if you accept the fact that there is no one-size-fits-all approach to service and that every customer will have different needs.
He also added that one of the secrets to Vendasta’s success was that they veered away from hiring generalists. He explained that while generalists, on paper, are great hires – they often become the reason why businesses can’t scale properly. This is because generalists tend to spread themselves too thin doing multiple things at the same time.
If you want to grow as an agency, it should be your goal to hire and/or develop experts. This ensures that you have one or a team of individuals who are good at what they do and that you can trust them enough to create excellent output.
Another thing that Troy mentioned which caught my attention was that keeping your teams small helps as well. This makes them manageable and allows enough flexibility while still being able to provide consistent output. The number will vary depending on the roles, but generally Troy recommends having no more than 8 direct reports per manager or team lead.
How to Improve Your Business
Improving one’s business is crucial, not only to earn profits. But, to have a structured and ever-developing business process to deliver consistent results and services to our clients.
How do You Expand Your Service Offerings Profitably?
Let’s assume you have your first few clients and you see that business is doing good. You’re thinking about expanding and adding a few more services to your agency. This is a very exciting phase in a growing business but for many agencies, this becomes a slippery slope that starts causing “delivery indigestion.”
Since Vendasta has successfully added many services over the years, we asked Troy about his thoughts on how an agency can add service offerings while mitigating the downside risk.
While on the surface, it looks like these services are added on a whim, Troy claims new service offerings go through a thorough process before they are made available to all their clients.
For starters, the service needs to be scalable. Troy’s team has to ensure that a process can be developed that will be consistent in scope and deliver repeatable results to clients. This is the first and most important criteria for new services being evaluated.
Next, Vendasta does some market research to find out who is offering these services, how they do it, what the going rates are and how the unit economics works out.
Once they have a solid business case built that is approved by the rest of their executive team and team leads. It goes through a pilot process where it’s tested with select clients so the process can be battle-tested and hardened before scaling out to more clients.
Troy also added that when you are adding a new service, or trying new strategies in your agency then you should accept the fact that it may not work. Sometimes they discover during this process that service just can’t be reliably scaled, or doesn’t have the economics to work as a white-label offering.
Lastly, he claims that the best way to mitigate risk with new services is to rely on process and documentation. Through process and strategy documentation, you will be able to take note of the problems, issues, and successes as you develop service offerings.
Troy also recommends running pilot projects and tests with long term clients or on your own business to tailor such processes to what works best for your clients’ business. He added that using white-label service providers (like Vendasta) to deliver new services can be a great low-risk way to start proving out the process and de-risking the sales pipeline before taking a new service offering in-house and investing in staff, tools and process.
The Importance of Processes
It has been established that one of the many things that differentiate a successful agency from one that struggles to scale its use off processes. They say that the right processes will always be core in every agency.
We asked Troy to tell us about what he can say to agency owners who are having a hard time creating and keeping up with processes. Troy mentions that agency owners should not hesitate to use tools. Tools are there to follow processes and create strategies easier. He added that when creating new processes, owners should ensure that the process can easily be replicated and/or scaled depending on the needs of the customers.
He also highlighted the importance of having a rhythm in the business to document new processes and review outdated ones. At Vendasta, every team is regularly meeting to review their process to ensure it’s delivering the right outcome and working for their team and clients.
They’ve also developed a host of internal tools – some of which are now available to their clients to use, to help them manage their processes and teams.
How Do You Deliver Consistent Results and Service to All Your Clients?
As a white-label service provider, the ability to generate predictable and consistent results is paramount. For some agency owners, this seems like an impossible wish as they get marred by inconsistency, change, and other challenges from one client to the next.
When we asked Troy about their secret to be providing quality service to customers at all times, he said that the secret lies in knowing your customers. In their case, they have multiple types of businesses but they have efficiently grouped them into certain categories.
Now, each category more or less shares the same qualities and they require the same kind of service. For an agency to be successful, you have to understand each client (or at least each category of the client).
You have to look for your customer’s pain points and try to create a service to answer that specific pain point. You should also be able to convince yourself and your team that pivoting regularly will be a thing if you want to keep your customers happy. This also means having to update a process for a specific client if needed.
In essence, it’s finding a balance between having processes (which create the consistency) and flexibility to document the nuances that lead to success for specific clients.
Keeping Consistency Amidst the Challenges of an Agency
From an agency owner’s point of view, there are a number of challenges that can shake the status quo of businesses. One excellent example is with regards to handling talent within the agency.
While it’s always exciting to have a team of individuals working together, it’s not always rainbows and butterflies. Some people perform better than others. These things can severely affect the team dynamics and consistency of an agency.
Troy says that managing people will always be a challenge for agency owners. That’s why you have to create processes that newly hired employees can follow to achieve success in their roles.
This means developing very specific training and onboarding plans for new hires based on their role and measuring how quickly they get up to speed so they can be benchmarked against previous hires.
Another important factor is the team size, Troy prefers keeping teams of 5-7 per manager. He says they’ve found this size works best for them as it allows the team to have redundancy in the case that someone quits or has to take time off but doesn’t sacrifice agility and adaptability.
Troy also emphasized the importance of having a business forecast. This means looking at your business from a high vantage point and using data to see where your company is heading. This allows you to have a good grasp of your agency’s capacity. When you’re likely to exceed that capacity and get a lead time on hiring additional people to support your growth and put them through a full training process.
He also mentioned that the best way to prevent any issues with management is to ensure you get the right people from the start. Fine-tuning your hiring process can get pretty tricky but it is a surefire way of saving you headaches in the future. With a good hiring process and a standardized training program, you can get your agency stable and ready for any challenges in no time.
Challenges of Being an Agency Owner
The life of an agency owner is tough. As a matter of fact, it’s not a life you would wish on your friends and Troy agrees. For him, it is always hard to be an agency owner because you have to learn how to balance growing the business, making sure it’s profitable, making sure you are offering consistent and efficient services while being able to keep up-to-date with new business trends/models and tools.
This is why Vendasta was created in the first place. To offer a service that takes some load off the agency owners so they can focus on the important things. By letting a white label program handle some of the work, the agency owner can focus on what they’re great at.
Scaling Means Giving Up Control
A lot of the agency owners we know have a tendency to hover and monitor (even do everything by themselves). As the business grows, agency owners often need to let go and let the team handle the tasks. This step is a big one for a lot of owners and it can get pretty scary. To them, it’s like letting another person hold your baby for you.
For Troy, one of the biggest blockers for an agency owner is his/her self. Oftentimes, the owners limit themselves and their agency because of their own processes. This is mostly because owners believe they can do things better themselves so they don’t trust their team to handle everything.
While it is true that there will be growing pains when you pass on tasks to your team, it will pick up speed as time passes by. Being patient is key. You also should be able to understand that mistakes happen. Your team might do something wrong and that should be fine as long as they learn. However, you should go and ensure you instill a fear of making mistakes. Troy mentioned that just trusting people can often push them to do things better.
At the foundation of scale is a process that gives you the confidence that when followed properly, outcomes should remain consistent. Having structured processes in your agency should give you a base of confidence to start letting go of delivery and scaling your team.
Importance of Data and Reporting?
Towards the end, we talked with Troy about the importance of data and reporting. Troy explained that data is absolutely critical to Vendasta’s success. Without it, they’d be running blind.
He explains that it’s normal to see you’ve got a lot of clutter when you are using different tools and processes. Looking at data as an agency owner lets you see the company from a vantage point that allows you to see who’s performing well, who is encountering what problem, and who might need a little bit of coaching. It allows you to pinpoint the specific parts of your company that needs checking.
He added that data helps you make decisions. There is also a misconception that data has to be totally accurate for it to affect the owners’ decision making. Truthfully it doesn’t have to be 100% accurate but it should be directionally accurate (80%) It’s the smoke signal before the fire which allows you to see where your business requires attention before it’s too late.
Agency Profitability Tool Kit
If you’re looking for more resources to help you improve your agency’s profitability, then check out the Agency Profitability Tool Kit – it’s full of the same templates and checklists we’ve used with consulting clients to help them improve their profitability by over 100% in under 60 days.
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