“So it's pretty rare that I'm happy buying from an agency”.
That's an actual sentence said to me by a client. And it's not the first time, it's not rare, it's not unique. It's the standard. Here’s some thoughts as to why and if you read this repeatedly I believe you’ll have happier clients.
I think by and large, a stereotypical sentence, most agencies charge way too much. Their costs
are way too high. They care too much about their business. And too little about their customers.
It's almost like they'd much rather sit in a bastion of people saying, “Wow, you're so amazing, your so rich, your so pretty, your so wonderful”, rather than sit with their customers and clients say, “Wow, how do we fix this challenging problem”
That's just how their brain works. They would much rather have their ‘friends’ (I should be saying admirers or sycophants) around them than their clients (the people actually paying them money).
Which I get, I totally understand. It's easier.
But if you're an agency and you're not obsessed with your customers' problems they are 100% going to go elsewhere. No ifs, ands, or buts. And most agencies, by the way, do this AND just simply charge way too.
A hilariously large amount of money.
It's kind of their fault and kind of not their fault.
For example if you are a private client of mine, I will charge you $1500 a month and do your campaigns by myself. I will use a very simple, low cost, always working campaign and make it super simple.
And because I'm doing it myself, I have 100% margins.
If you came in through a referral, I will pay that referral person money until you cancel. So I guess I have 90% margins.
Yes there is time it takes me to fulfill and keep the client happy but it's negligible and totally worth it. It takes me a little amount of time because I'm good at my job, I've got lots of education, background, & experience, know how to research, and I'm absolutely 100% devoted to figuring shit out.
And that's why I have private clients that haven't left me in three years.
And yes they've gotten emails and text messages and solicitations and demos by my direct competition.
And when they do the price reveal my clients laugh their ass off.
“Like, really, dude, $5,000 a month”.
“Why is it $5,000 a month?”
Then the agency defends their position. Pretty well I might add.
And the client comes back to me and says “How come you charge only $1500?”...
“Because I'm not building a business to brag. Because I don't care about being on stage and saying, Wow, I made a million dollars in 10% margin. Raising your fee will only make you leave earlier and I'd rather have you stupidly hilarious happy then have a speck of a thought of cancelling.”
I would much rather have a super lean business with a customer that is super happy that I understand their business and know what works and walk them through frameworks that I've learned in MBA school or Michael Porter's five forces or, or from a speech by the CMO of Deloitte, or a business book.
And honestly Mr. Johnson, when you're buying, you're buying me and my knowledge and expertise incorrectly paid by a former Starbucks barista that says “Oh I'm so sorry your campaign isn't performing.”
And when I run into agencies that have an unknowingly and hilariously high cost business, I kind of giggle to myself, because that $1500 a month client that I am servicing by myself I make $1500.
When I have a $1500 client my margin is $1500. I am working on the client, I like working with the client, They don't bitch a lot. And maybe like 15 minutes, once every two weeks, we just talk. It's like ‘alright, cool, just check in and see’ that type of stuff.
There are other agencies out there that when they charge $3,000, they're still not making $1500. When they charge $5,000 they are still not taking home $1500.
There are agency owners that take home 10%, maybe 20%.
That means that very agency has to charge $7,500 to $10,000 to have the same take home as my $1500
That's because they have a HUGE cost structure - they've got all these account managers, appointment setters, sales people, media buyers.
And then that's not even including the dollars they are spending on ads (when they should simply be making their clients so hilariously happy, add in a referral program, blog the hell out of everything, and get dream clients.
They literally have a high cost business model, which is the antithesis of the agency model. It's the opposite of the lean model. It's literally your grandfather's business model that will have you stuck on zoom calls, in conference calls, spending 100s of hours figuring out why an SOP needs to be updated.
This aint the slack version mad men. Quit trying to be.
I personally know agencies out there that are doing a steady $15,000 a month at 80, 90, or even 100% margin of super happy customers that would never leave them and actually want to sign a three, six, or 12 month agreement at a 10% discount so that they do not solicit their competition.
I also personally know agencies that do $1,000,000 a year and the 2 partners take home less than $8,000 a month each.
So these 2 partners have all the ‘shit’ of a $1m a year business with high costs and employees and ads and labor when they should have the ‘shit’ of 5 $1500 clients with near zero costs zero employees, no ads, and no labor.
But 99% of agencies out there are so absolutely obsessed with themselves and bragging about how much you spend on an advertisement when they should be obsessed with their customers.
I remember I did consulting for an agency that does 4 million a year and they focus primarily on chiropractors. And I remember sitting in one of their board meetings or their all hands meetings or whatever calling it and I go ‘Alright guys, you're calling me with a problem. You're paying my consulting fee. So what's the problem?’
They say our customers are leaving us too fast.
I go What do you mean? She says, well, customer lifetime value….
Look if somebody says customer lifetime value I know they're doing something wrong.
Nobody in business with customers that love them actually talks like that at all. Ever. That's just marketers talking to marketers. Nobody in business talks like that.
And even if they did, do you really deeply and honestly want Starbucks talking about you as a Customer Lifetime Value?
So they went on and said their customer lifetime value is only $5,000. It needs to be $10,000. They leave after 3 months and they’ve invested all this money into client retention. And it's not working.
I go, Okay, cool. Everyone turn your camera real fast.
Alright, everyone, raise your hand real fast, and keep your hand up if you've been to the chiropractor in the last six months.
Everybody put their hand down.
I go guys, well, it's pretty clear.
You're obsessed with your business and not your clients? Why are you not going to the chiropractor?
And then there's always some bullshitter-y excuse as to why they aren’t, no time, didn’t know, etc etc.
It's literally the BEST and CHEAPEST way to learn about your client, what works, and what to not do.
Hell if you have a client in the area, you BETTER be buying their stuff and visiting their site.
I have a blood center clinic and 2 weeks in I drove by their office, parked, and looked at their building. I walked around it, looked at the art, and acted like a future donor. When they called 30 days in saying no one visited I said “Yes that's because you don't have a sign in your gravel driveway, the art should be replaced with your logo, and the security guard whose name is Michael didn't know your business was on the second floor.”
It's that level of obsession you 100% need to get to.
If your selling agency work to Kitchen Remodelers, you best be getting quotes, calling around, and talking with them. Understand how they sell, ask for quotes, get prices, shop around, read their journals, magazines, industry articles, who their suppliers are,
You can even gather your findings, create a report, and immediately become a legitimate agency in less than a week and directly beat out the competition because of your direct experience..
I personally go to the dentist every six months, not to actually get dental work. But to go in and hear the pitch, experience the business.
So when my other dental client calls me and says, You know, I don't understand why patients are buying.
I can say well...Mr. Client did you know that there's a direct proportion and there's a direct connection between how the front desk greets and acts and whether the future client trusts the dentist enough to buy..
(I know this because I spent an hour researching the hell out of dentists businesses)
Here’s the 3 scenarios
1) Somebody slides the glass over and says ‘Mr. Miller Come In’ vs.
2) Somebody opening the door halfway and saying ‘Mr. Miller Come in’ vs.
3) Someone coming up to the chair and saying ‘Mr. Miller, we are ready for your consultation’.
That is a direct connection between whether or not people actually make a purchasing decision and trust you to make a personal purchasing decision. So Mr. Johnson, which one of these are you?
So it's that type of client obsession that most agencies miss and they miss that because they're not obsessed with the clients. They are obsessed with themselves or social status or winning awards, or just telling people that they do business,
Then their don't renew and all of a sudden they are like Oh my god, what am I supposed to fucking do?
Their margins drop
They need more business
They make less money.
The solution is simple. Get obsessed with your customers' problems.
There's no if, ands, or butts.
Facebook does not pay you money at all. Callrail does not pay you money. Clickfunnels, Ghl, Active Campaign. Any of the tools that you use does not pay you money.
The only person who pays you money is a person.
That's it, and these people are willing to pay to solve their problems.
Just go get obsessed with them.