This week, Marcel is joined by author and founder of Agency Mastery, Jason Swenk, to discuss transforming agency burden into an asset and how the agency space has evolved over the last few decades.
About Jason Swenk
Jason is one of the prominent thought leaders and coaches for digital agencies in the space. He’s literally written the book for growing an agency from nothing to two eight-figure agencies. One of the most sought-after advisors to agencies in the World, Jason shows them an eight-system framework that worked for growing his agency, working with brands like AT&T, Hitachi, and Lotus Cars, which eventually led to selling his agency.
Host of the Smart Agency Masterclass podcast, and author of Accelerating Your Agency and Perfect Digital Agency Avalanche, when Jason isn’t working he enjoys flying and climbing mountains.
Points of Interest…
- Running an agency in 1999 and how it’s evolved 2:08
- The turning point for Jason’s agency – CRM 8:06
- Facets of agency life that have become easier/trickier 9:20
- Priming yourself for success today 13:05
- Next frontier in specialization: streamlining internally 15:00
How agency life has changed since 1999
I’m super excited today to have one of our very few repeat guests. The last time Jason joined us on the show was back in 2019 when we really unpacked his book at the time – Accelerating Your Agency – and talked about a whole bunch of really great frameworks, The 0 Dollar Change Order. To this day, it’s still one of my favorite nuggets that has such a huge impact on limiting the dreaded scope creep.
This week, however, I’m interested in something a little bit more meta. Jason, having been in the game for quite some time, has witnessed a lot of change within our industry – while helping (often accidental) agency owners turn their “burden” into an asset that produces not just wealth but freedom.
Jason knows all about being an agency owner by default given this is part of his backstory; he was a web developer before he found himself running his own firm. At that time, what was it like to run an agency and what was really different from how things look today?
“My gosh! We could talk for years about how it was different. I started my agency in ’99. So there was no social media. There was no Google… there was nothing there because we were basically kind of creating websites for people. So it’s really changed.”
Back in ’99 I bet everyone was just billing for time; digital and advertizing agencies were essentially offshoots from professional consulting and professional services – who still predominantly bill on time. Also, in terms of competition, it wasn’t the global affair it is today, but rather a more localized scenario whereby you’d only be competing with those in your physical vicinity.
With competition and talent more globalized pricing models have proliferated and agencies are typically now billing in ways that allow them to allow them to potentially reap a lot more upside, but also take on a lot more risk. Does this align with Jason’s high-level view of what’s changed at the business model level?
“Your niche, when you started an agency a long time ago, was your local marketing. We just couldn’t reach so many people. I remember literally going through the yellow pages and calling people… So, yep, very local and not specialized in the very beginning… I remember I got to a point where I was really literally about to close down the agency. And I was like, ‘Let’s look at the best clients I have.'”
Once Jason defined his niche, the agency started winning clients across the States and that was circa 2008. And the international clients followed. Even then, they bill hourly.
“Hourly billing was huge and we would charge basically more for execution than strategy. Because people didn’t trust us, right? Because we weren’t putting out content. So how could they trust us until they actually engaged with us?”
***Myself and Jason get into this, RFPs, spec work, and putting everyone through the ye olde “pitch circus” avec portfolio briefcase from 7:20***
The turning point for Jason’s agency – CRM
So I want to dig into Jason’s perspective on what’s changing fastest, where we’re heading, and how to adapt as an agency in the optimum way to set ourselves up for success. But first, what was the turning point for his agency in terms of selling what was effectively a brand-new service to clients? Well, he was among the first to really start monetizing findings from data.
“We developed a social CRM before there were really all of these things. We would take all the data from Twitter around conversations. For example, we went to Porsche and said ‘We’ve extracted out all the data that people are talking about your brand, plus Maserati, Ferrari, and Lamborghini. And we want to let you know the keywords and phrases we need to go after’.”
They also turned around and did this for Lotus to see who they would land first. They actually landed Lotus because in Jason’s words…
“They love the data and we sold the data! At the time, this was a huge difference – especially before the proliferation of accessible AI. If you have the data and you can run it through AI, then AI helps you come up with a strategy. It’s a game changer. I mean, it’s so easy to do an agency right now!”
Facets of agency life that have become easier/trickier
If you look at today versus the late 1990s, what does Jason see as advancements for agencies over time? Obviously, technology has been game-changing, and also finding global talent, but what else beyond that?
“Flexibility, we don’t care how many hours people work as long as they get the stuff done! I remember, even when I had the systems and the agency was running everything, I still felt like I had to be the first one in and the last one out.”
Think about all the hours humanity has collectively wasted by sitting at your desk. In an office. Effectively doing nothing. You just wanted people to think that you’re working, even though you’re finished working. That’s not a good use of anyone’s time.
“I hear a lot of agency owners that are like, ‘We’ve done it this way all the time.’ And I’m like, ‘Well, you’re not going to be doing it this way next year because you’re going to be out of business.”
As for what’s become a hell of a lot tricker over the course of time? Competition going global. Moreover, it’s people declaring themselves as competitors when they are not, in fact, experts in the field, they just claim to be.
“Anybody and everybody can run an agency and say they’re an expert… There used to be really traditional marketing agencies, but now there’s agencies for everything. You can be a one man person with an agency.”
As for how one sets themselves apart from all these other agencies? You need to create content that brings value. As Jason puts it; you need to separate yourselves from everybody else by positioning yourself as the most trusted advisor.
Once you define your target market’s pain point, you then need to solve it for them in a seamless and accessible way. That’s what we aim to do on this podcast. We dispense helpful information which builds trust between us and our viewers. Then, ideally, more people will want to work with you!
“A perfect example of this? Gary Vaynerchuk. He blew up the agency world, and a lot of the traditional agencies, because he put out so much content. All these big brands wanted to work with him. So it obviously works.”
Priming yourself for success today
So, accessibility to technological advancements has been something of a double-edged sword. For instance, it’s lowered the bar for entry; anyone can start an agency. Consequentially, it’s created a lot of extra noise, reinforcing the need for you to create legitimate value in the marketplace – plus being consistent with that.
One of the tactics that people will also use is developing more expertise – or perception of expertise – in the marketplace by becoming increasingly more specific. I’d imagine, when Jason started out in ’99, that merely being a digital agency was niche enough! Then, by 2008, that wasn’t so much the case anymore, so he had to zoom in to increase specificity and differentiate himself from the pack.
What other things does he view as important in this now hyper-competitive climate? What does today’s agency have to do in order to be successful?
“You got to keep up with trends. If you’re positioning yourself as the trusted advisor, your clients are going to be coming to you for what’s the next. ‘Hey, how are you using AI? How are you using this tool?’ Their expectations are so much higher, and you should actually be looking at how can I take all of a client’s data and really dive into it.”
I mentioned before how we’re moving from billing hourly to assuming more of the risk and charging accordingly; well, it turns out Jason favors a hybrid model. He delves into performance models from 14:45 minutes***
Next frontier in specialization: streamlining internally
What I feel, personally, most bullish about is the next frontier of specialization. It’s not going to be your specialization in the market, but rather your specialization as an agency internally. Defining what work you do and what work you don’t do. You don’t leave clients hanging by the by; you can either refer the work you don’t do to other agencies or push it to partners.
You need to streamline your business, internally, that’s what will make it next level. So, that’s my view. As for Jason’s experience with how the insides of an agency (once figured out how to position and get clients), are shifting for the clients that he’s working with…
“One of the exercises I tell our Mastermind Members to do – at least once a year, if not once quarterly – is look at your most profitable clients. Figure that out. Also, you need to look at what your most profitable services are while listing out all the services you’re doing. A lot of agencies have 8-to-10 different services, and I’m like ‘Holy Cow, how can you keep up on the trends and deliver on all this?'”
Jason also advises looking at the services that aren’t as profitable, or the ones that are actually losing money, and defining if it leads to your core offer. For instance, does that offer get your foot in the door? If it doesn’t lead to your core offer and it’s not the most profitable, you should delete it. Alternatively, you can look at how you can streamline that service, or that solution, where it is profitable.
People overly focus on the quantity of revenue so they lose sight of the quality of revenue. Not only that; having a bunch of services that aren’t performing is such an operational drag! Not to mention the emotional drag of clients who are constantly upset.
Meanwhile, your best clients aren’t getting as much attention because they’re not the thing that’s broken. They should be your focus. More on this from 18:44***
Key takeaway…
Be willing to go in and – for the long haul – add value, and create necessary content. If you do that for long enough, eventually the cream will rise to the top. You also gotta keep up with the trends, continuously understand the client expectations, and you must run the data. And it’s never been easier to run the data than it is right now.
For somebody that’s not niched, I can’t imagine how stressful that would be right now. The surface area you’re trying to track and keep up with is just so wide. One of the useful proxies of niching down is that it reduces the surface area to something that, ideally, you’re really interested in. It’s something you’re an expert in, and then you can stay on top of being diligent about the trends.
See more from Jason Swenk…
Did you learn anything new from this episode? Let us know in the comments below! We have helpful blogs designed to bolster your agency profitability, such as How To Calculate Your Billable Employee Cost-Per-Hour.
Our next installment of #APP, on October 18th, will see Marcel joined by Chris Moore. Our previous APP blog – Episode 124 with Alife Wenegieme – can be viewed here…
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