This is October’s monthly Progress Report for ATTN Agency and it was a big one. We made some major progress and our structure and future planning.
We structured the growth of our company related to our media buy teams. One of the main conclusions was the importance of pods of media buyers that work together on accounts across different platforms.
As we approach the new year, we’re beginning to talk about goal setting and whether having a small business department aligns with our goals or not. Do we build a small business department or refer all those smaller accounts off to other people and focus on the bigger accounts.
We’re debating if we want to have client success managers or media buyers be a major part of client communication. Are media buyers going to be on the phone calls? What about Slack?
Many accounts come to us and want to avoid paying service fees at the start and offer equity in lieu of paying service fees. Which is enticing for a promising opportunity, but most companies don’t make money for two years, so it's a lot of work for no cash.
Pod media buyer discussion
Yet another weekend finds me slogging away, to get ready presentations for two big accounts. Bagging these accounts will completely change the landscape of our business. Last week we signed a big account, so the search for employees begins.
I read many books and I am currently reading ‘Traction’ by Gino Wickman. This book is like a blend of The One Thing, The E Myth, and Sticky Branding too. These types of business books give me good guidance and direction to grow my business. We need systems in place so that we can onboard the best people and have the best company.
We had a meeting yesterday with one of our earliest and biggest clients. We wanted their opinion and reaction to our expanding services, like creatives, SEO and content creation. I am obsessed about being the best in what we do. As we grow, I will have to delegate many tasks to employees. I have to make sure that I get the best people I can get.
I am connecting with buyers on LinkedIn, trying to learn how things work at their agency. We are growing at a fast pace and I am always open to new accounts, big or small. Our exemplary work ensures we do not lose accounts. A competitor just sold for $220 million. In four years, they reached $17 million and sold for $220 million. Hmmm...that is one goal to emulate.
Year one we are targeting half a million revenue, and at this projection we should have $3 million by year two. Hopefully we can keep it up, but we need systems in place.
The competitor that sold worked in pods. Earlier, I shared Justin’s outline for business growth, with units of people who work together consistently and not necessarily on the same accounts. However, there could be pods that worked together, like three people working on one company, four people working on another company, one each on Pinterest, Twitter, Facebook, Google, Snapchat, etc. These people work together as a team on an account and report to the team manager.
Good job by Justin to visualize this kind of setup for our company!
Goal setting and small business
Return on Courage by Ryan Berman talks about making courage your brand. Based on this, my business partners and I discussed a vision for the company, our goals, goal setting, our core values, and things we want to take a strong position on. We were trying to envision our company image in the future.
The discussions go on, and we are planning a partners' retreat where we will devote an entire day just to work on the business. We aim to set definitive core values, vision for the company, the way we interact with each other, whose roles are what, and fix responsibility. Our discussions included all these points:
Being at capacity: A client asked if he should refer us to a new account. He enquired if we were at capacity to take it up. I basically told him, we are not at capacity, but even if we were, we would just eliminate small accounts and make room for one large account.
Small accounts: To continue taking up small accounts or not, was also discussed at length. I think they help with our cash flow, but I do not want to lose the quality control, because of the smaller businesses.
In order to make any money on that part of the business, we need a medium buyer. The buyer will benefit substantially from more senior buyers. It would be a way for them to grow in the company and see a future place for themselves. However, all this would require us to do much management for the buyer.
New Buyers: Since I am more involved with business development, we discussed who would be involved with ad buys, manage new buyers, etc. Points like hiring someone to handle the buys, paying them, delegating the entire buy work to them, were all discussed. Tough questions as there is still a lack of clarity as to the exact direction of the company and the fear of losing control as business owners.
We talked about growth and broke down some numbers. We're at 7800% growth this year from Q1 to Q4. To sustain this, we would have to sign one small business account per week, and two large business accounts per month. We could sign three in a month or one big one, and then ramp up by signing more accounts as we get into summer of 2020. All fluid, but that is the pace that we need to sign clients at, which is extremely achievable based on our capability.
Payment Structure: We talked about how to structure payment for these people. We met with a CPA and he recommended a fixed bonus structure to avoid confrontation or conflicts with people about their pay. Commissions lead to confusion and frustration, especially with ad buys.
We discussed if we should pay people more as salary and bonus, or do we have a lower to average size salary (fixed dollars amount) with commission for targeted growth achieved. What would attract buyers that we desire, and still suit our pocket?
Equity as Perks: Ideas like giving equity to buyers, to tempt them away from having a side hustle, and put extra efforts into the products they have equity in.This means getting the agency to an extremely comfortable income level, and then stopping excessive growth on the agency side and reinvesting that time and energy into products, which would ultimately make us more money.
Structural Changes: This year we are going to have a payroll company that launches. We will change our company from an LLC to a C Corp, which will give us many advantages.
Communication: I put a form together last week for the kind of communication which should happen. My business partners are better at the business operations, have a structural mind and they can just see the way it should operate. They should just dive into that role and embrace it.
While closing deals is important, the operation side of an agency is supreme. It is the ultimate stability of the entire company, and revenue will always be more consistent than sales. Therefore, it becomes important to clearly divide and define the roles of us partners. We need to put our org chart together and decide the POA to achieve our goals.
Corporate Hierarchy - Team leads and client communication
We need more structure at a high level. It cannot be individual teams. The structure that we came up with is like this:
- Top tier is clients - 5, 10, 15 clients.
- Second tier is two people in charge - the team lead, who is responsible for media by performance, and account manager, who is a relationship and sales manager.
- The team lead, will be responsible for the social media marketing manager on the account, the search engine marketer and others like analytics. This way we eliminate buyers working on 10 or 15 accounts and also responsible for talking to the client. Each team lead has 5 accounts, but the buyers may be working on 7 or 8 accounts and report to that one team lead and that team lead is responsible for client communication.
- The account manager is also responsible for client communication. He has to work on new business, client satisfaction and retention. And the team lead can focus on ad buys for their list of clients.
- The team needs to be able to talk to the team leader about what is happening strategically. If there are specific questions related to what is happening, you need to be able to assure the client of a reply. We have to get rid of time wastage.
- Our strategy to help streamline the whole communication process. We have to list what the buyers need to provide to the team lead, or the account manager. Things like strategy changes to the client, or any general changes that have been made to the account, things we are waiting on, etc. This information is provided by each buyer - the Facebook, Google, Pinterest, Amazon buyer. Each week the team leads should have this information on all platforms. What has been tested in the last week? What AB tests have gone up? What do they look like? How are they doing? What looks bad and why? The client is going to know that and then also what looks good and why? What has been done to achieve their goal this week?
- The team lead and the account manager, need to understand the new reporting we have. If you are a buyer managing 10 accounts you must fill this information out for the team lead, who will then call and communicate with the clients.
Strategy Changes: To optimize keywords. The idea is to get buyers, who do not want to be in meetings and who do not want to get everything together for reporting, into giving streamlined information to the team lead each week. It is necessary for team leads to get information from the buyers because they are going to be managing the accounts to make sure that they are performing right.
Equity vs Fee for services
As we are growing, I keep getting offers from new brands, existing brands, semi startup brands, to become an equity partner in their business.
Basically this would involve not charging a service fee for ad spend, and providing all marketing services for free, in return for equity of their company. If the company does well, we start to take payment as a shareholder in the company. Our contribution to the company would be managing all the advertising.
The problem is I want cash to grow the business, hire more employees, sign more clients. On the other hand, the prospect of equity is enticing. Equity will give me that long tail growth of the company that can make us more money potentially. What is the right move?
I am at a crossroad here. It feels like taking cash, hiring more employees, growing, providing myself and my other business partners just a little bit more free time to be able to make strategic moves, would be the right decision at this particular juncture.
Maybe a year from now would be the perfect time for us to think about equity. By then, we will have grown. At the moment we are completely involved in every aspect of the business to succeed and maintain quality. At this juncture, to run the traffic, with our own money, for an owned product, would be challenging. Yes, there are many instances of profiting immensely from running traffic, but we are undecided for now.
We know the kind of assets we need. We know how to write the copy, run it, and we know it will convert. We have developed our own products from scratch. We know what we are doing, and we know what to look for. We know the difference between cashflow and profit. As long as the partner we are with knows how to operate a product, we should be in good shape.
It is a smart and wise move for any company to offer equity to qualified marketers like us. They offer us an equity stake ensuring we have a vested interest, to go above and beyond our best marketing skills.
Opportunities will continue to come our way with better and more projects, and we need to decide the course of action to take.