Group Coaching Call: December 14, 2016

Hello everyone. Welcome to our third call. I am going to give you a few moments to get situated and to come in to the room. If you do hop in to the room and you see me then, can you say, hey Jeff what’s up, I hear you, I can see you. And just let me know that all is clear. In the meantime, I am going to have a little bit of water.

Okay, it looks like some of you are hopping in right now. Let me know if you hear me and you can see me. Say hi Jeff. Maybe I started a little bit early actually. Maybe I was supposed to start at exactly 9 am.

Alright, so Jason is there. Jason can hear me. Welcome Jason. Alright, let's see if few of you are in there. People are hopping in. I am just going to give you a few more moments to get going.

How is yearend going for those who are on the call and the chat, is this yearend super stressful, is it not as bad as normal? Is it easy, is it hard? Give me a little bit of indicator as to how things are going for you as you celebrate year end, or holidays, whatever you want to call it. I know that, people are in different parts of the world. Just don't want to make any assumptions but I know that the calendar year is ending for all of us in about two weeks.

And I've noticed that a lot of the content that forms and everything, it seems like people are not participating as much as they had in the first lessons. I am wondering if that year end is factoring into it. And whether the factoring into it, if anybody wants to comment on how it's affecting your ability to go through the course and everything. I think that really helps me out.

Thomas is saying that it's good timing because of this--because it's a little bit slower. I would agree with that. I found that during my hard core agency days the best time of year for me was actually next week. Next week which is like the time that week leading up to Christmas. If you're into Christmas just week leading up to December 25th and then all the way to the new year, it's just amazing. It was great for me, so.

Paul is busy with his retail store and staff, I can see that. I mean that's retail is--this is the busy time so can absolutely understand that. Anybody else having to share about being busy or not? I ask for several reasons but this is a beta program and we're going through this all together. I am also trying to get an indication as to timing and as to whether we should give breaks in between some of the lessons we have. Just so people can get caught up in the lessons.

This week is going to take us through lesson no. 20. And is everybody going to be ready to be done with lesson no. 20 by this week. Should we release lessons 21 through 25? Or should we give a couple of weeks to get caught up and let people enjoy their holidays?

I am thinking that either one might be a good idea. But I'll like if we can share the chat, to hear your comments on that as well. I am not sure how much of the delay I have right now. I can't really tell. I see chats coming in but it seems like a little bit of a delay from what I am saying. I'll give some time for that to come in.

What I am going to do right now, I am just going to look at the report that we have from the people who have answered our survey. And so we had a survey that we asked you all to fill out in advance and we'll go from there.

Fred said that break will be alright. Alvaro is good with the pace. Okay. Thanks for sharing that. Looking for the rest of you to give your feedback as well. The biggest thing here is participation. So I want to get as many people to participate as possible. And I've noticed that every call there is couple of fewer people getting on the calls. And then the surveys themselves, which I am about to show you, I am not getting as many responses as I'd like to see. So, it gets a lot easier to do these things with more people there.

Jason says good pace but break will be good too. George is really busy. So, I think we're all busy, that's definitely something we all have to deal with. I'll keep on looking for your feedback on the side here, but it sounds like people will be alright for the break.

Thomas wants to keep on track, that's good to hear, okay. We'll vote for keeping it on track, perfect. Let's just see what everybody says. Either way I am going to be sending out a halfway survey at the end of this week, just to get your thoughts on how we are going so far, the pace and everything, and to get some more feedback from you all.

Dietmar likes to keep on track. Great, that's good to hear. Perfect. Either way, just so everybody knows, there is a week off, the week of December the 25th. December 26th, that week we are not going to have any videos released, we are not going to have a call that week. What I was proposing is, maybe next week we get that as well.

But either way let's look at our results here on the survey. We only have six responses. Again, I am not sure if there is an awareness problem that people don't know that there is a survey that you can look at or what's going on there. But, I'd like to see more results, to be honest with you.

Let's see with the ones we have. So, we have rating the quality of your current relationships. So on average it looks like people are a little bit less than a four. And I think that's good. So it's above average. The relationships you have, everybody is looking to improve them. One of you has rated yourself having a lower relationship. Hopefully in the free form comments we can get to the bottom of that.

Does your agency have a good relationship, yes or no? Most of you are saying yes, but some of you are saying no. So, again, those of you who had said no, we’ll look at your comments and see how we can help solve that for you or help get a lead on, how to solve it.

Who is in-charge of your relationship? Looks like, half of you are saying that the owners are the only ones that have relationship. Some of you are big enough to have account managers and then some of you are saying everybody is in there. So that's good to know. I think you can go with all of these models, and the bigger you get then you either are going to have to choose account managers or everybody. So, it's good to see there is a little bit of mix there.

Most of you don't know your client budget cycles. Hopefully you have all watched the client budget cycle lesson at this point, but you can see how important that is right? You can see how important that is to know what their budget cycles are. Then you can see when things are coming in, when revenues will come in, how you can predict it.

That was one of the biggest things that we did at my agency. It was just really to understand our clients and to know when their planning and to get a lead on. Tell them - hey we want to know what your plan is, and we want to be part of that plan. I think that's really important. So for those of you who are saying no to this, It really depends on your clients and how long you had them and how much you trust them and how long you plan on keeping that client.

But if you’re getting to the point where you have strong clients and you're keeping them for multiple years, you are going to want to know their cycles. And then for new upcoming clients, a lot of times it is easier to ask these questions right when you are first getting started than it is to wait until you're years into it. So maybe even make it part of your on-boarding process.

Damien has mentioned in the comments that he has a FAQ section of frequently asked questions that they ask every new client, when they are bringing them on-board. I think you might want to think about doing that here as well.

What is your budget cycle? How do you make decisions? When do you need to know, who you are working with? How much do you allocate? Whatever questions you can get the answers to. They are not going to give you every single answer, but try to get as much as you can. That's all about building relationships, that's what we're talking about here.

In general is building relationships with their clients, getting to know them, getting them to give us information. I have clients who still would give me the insider information and give me information even though I don't work with those companies anymore, they still give me the inside gossip. So try to get as much as you can out of them so these things aren't coming as a surprise. Because when they do come as a surprise, we see here that we are all getting our revenue inconsistently.

Now I would say that, there is nothing wrong with getting inconsistent revenue. And actually inconsistent revenue can become consistent. So if you are getting inconsistent revenue all throughout the year, you are still getting the revenue all throughout the year. But as much as you can plan around when things are going to come in and know when things are allocated, I think that's really important.

For example, my agency, the big agency that I am still a shareholder in, they know when the year starts that they are going to have committed contract of 5 or 6 million dollars. So they've lined that all up. So at the beginning of the year they know the clients are going to bite in and they are going to basically be at 80% of the revenue they were a year before. And the rest of the year is filling in the gaps. In order to get there and they want to grow, then you need to get even further than that. You need to hit bigger targets.

So that's what I mean when I say try to get your revenue sorted out even before the year starts. And hopefully you've all been paying attention to the lessons where we mentioned that. That’s really the big key here. Is that if you can get majority of the revenue you want, just booked and ready to go, by the time the year starts, you are not spending all of your time uncover new stuff. You are spending your time trying to develop that 20% that you still need to get. So, if 80% of your revenue is booked, how do you get that 20% or you can focus on growth areas and everything. So, that's why this is such a good model to go through, and a good way to do it.

You really need the luxury of having multi-year clients to be able to lock up that much revenue, in the year when it starts. So you need to have good contract terms, where you are saying this is a 6 months or 12 months agreement. I have mentioned this in the video, but what we would do is we'd say maybe a 3 or 6 months agreement when we are first starting with somebody. Just so we both have outs, with 30 days out clauses too, so if we didn't like each other, we'd always say, we're never going to hold you do a contract, if you don't like working with us. If we are not proving the value, we can be as good as gone.

And they loved hearing that and they never really exercise that. There's good to know that, they had that in their back pocket, if we didn't do a good job. And also it made us perform, right. Makes sure that we perform. And so we would sign the first contract that would be may be 3 months, 6 months. Just to get to know them, to on-board them, we’d charge them an upfront fee because it was more expensive to get somebody on-board than it was to maintain the relationship.

And then once that term was up, if we liked them and we thought they were revenue producing. IF we thought that they’re profitable, then what we would do is if they were profitable, we would try to get them into a 12 months contract.

Now I see Fred's comment and it actually that I am thinking about it maybe that's a little bit different. This is saying new revenue but it's also important to realize that new revenue comes in cycles. Maybe new revenue doesn't come in consistently from new clients, but there are things you can do to make it more consistent.

The example I was giving you was actually how do you lock down your existing revenue. Having these contract things, hopefully that helps you to understand how we would go through this process and how we would try to lock down that 80%, so we can go out there and focus on new revenue.

It is sort of at the will of clients but it does tend to happen around end of quarters, end of years, beginning of quarters and beginning of years, at least that's my experience.

Jason said what type of on-boarding fee would I charge? I do two months retainer to three months retainer. So if we did a $5000 a month program, we would call it a strategy fee or set up fee or we can call it something along those lines and we would charge 10, 15, 20 grand for that. Whatever we can get away with. We had to really justify it or understand it, but it was about 2 months worth of work to get somebody on-board, is what we would charge.

Now it depends on what we were doing. Depending on the service we were offering as well.

Yeah, Fred having that the revenue lock down is really nice. It's great, it does help you sleep at night and it does make you feel really comfortable going into the new year. That's how we’ve been able to be steady for a long time. Now growth is always difficult too. Even growing that extra 20%, or growing beyond that. It takes time to grow big accounts.

How long is your average client relationship? So some of you are five or more years, some of you are doing just one off projects, six months to a year, other, if we have the other answer in here. I don't know if we have a fill in for other here. That's across the board, right. Some of you are working on projects as you get them. Some of you have really long term relationships.

What we’ve talked about in class is that, the longer the relationship, the better it is. Because then you can count on their revenue, you can establish a rapport and then if they move on then you can find their replacement and make them happy as well.

Jason, that was in addition to the monthly we were charging. So usually we would have a set up fee of some sort, billable pretty much right away just to get us on-board. And then we would move over to the monthly retainer. So usually the contract terms would be 10 grand strategy or set up, I don't think we would call it set up because people don't like to get charge a set fee, they always think they can get that waived. We would have to give more strategic name (or strategy fee) and then on top of that six months at $5000 a month and then 30 day out clause.

And then what we would do is we would take that revenue that we would get and we call it $40,000 and we put it on our revenue forecast. So if that got signed then we have $40,000 in our revenue forecast and we can use that for projecting profitability as the company moving forward. We would spread that across each month, so it would get added into our budget and then we would see whether they were up or down compared to what we thought we'd do.

So definitely that factored into our budgeting process as we went along and then if we thought that client was going to renew we would just actually forecast that for the rest of the year. So if we signed contract in April, it's $40,000, 10 up front, 5 a month for six months and then if we knew it was going to continue on, we'd eventually extend that 5 a month moving on into the future as well.

How do you charge your clients for your services? A lot of you are project rates, you can do multiple billing methods, retainers. I think we are going to find that a lot of us are project based, maybe even hourly. I know that some of you just haven't filled it out yet but you are an hourly rate. I think a lot of us want to transition to retainer after watching the lesson and seen the map. It makes a lot of sense, but the reality is, we are going to have multiple billing methods when it comes down it a lot of the times.

So even if you are project now, and looking to transition to the retainer you are going to have some projects that’ll come up and that's okay. I've mentioned before that, like a project that comes up at this time of year for example, in December if somebody is like hey, I am going to have you do this project, I'd take that money, because you've already budgeted everything else. That money is going to be pure profit.

So if you take on a project in December and you can get paid for it, that's going to drop to your bottom line. That's going to be a profit for your company. So project work can be really helpful in certain areas and can be really nice if it drops down to the bottom line at the end of the year.

How much do you charge per hour? This is interesting. Looks like you are across the board again. I'd like to see more responses here because it is hard to draw conclusions but anywhere from 25 to 50, maybe couple of you 75 to 100, 100 to 150 two of you and then 150 to 250 there is one of you. So definitely across the board.

I don't know if anybody wants to share their rates in the chat. That will be helpful as well. I know some people are specifically looking for this. Saying I really want to see the rate pieces. So we have it on to make sure that we were able to share some of that.

In my case, it depends on what I'm doing. I'll just tell you right now, I have charged so many different hourly rates that I can hardly even keep track of them. If I was doing a side project and didn't really care, I would charge $100 an hour, some of the stuff I do with teaching and speaking and stuff like that, that's $500 plus an hour. So it's anywhere between $100 and $500. I try to get at least $300, if somebody is paying me by the hour. But it really depends on the work you are doing.

You all probably know that as well. If you are just looking for experience, you might take less or if you want the experience maybe less. If you don't want to do the work, you charge more. That's generally what I do. If I really don't want to do the work, then I'll charge more. That way at least I'm getting compensated for doing it.

Fred raised his rates. How did that go for you, Fred to raise your rates by $20 an hour? And Thomas, I hear what you are saying that you started $150 and if they're taking a lot of your time then it can drop down a little bit. That's one of the keys to operating a strong agency, is to know analyze first of all. How much to spend on something versus what you're charging them. And then can you recoup that money. It is difficult. It is a tough conversation to have. I'd love to hear it.

Fred says, he actually got them to say no problem and he thinks he left money on the table. That's pretty cool.

Jason wants to know, do I recommend breaking fees down in to services versus charging a blended rate. I would say, I don't charge a blended rate for service at all. So if I am doing PPC and I'm doing management the rate is the rate.

So the rates to do PPC management is X. Usually it's $2000 minimum or 12.5% of spend, whatever is greater. So that maybe $2500 or $5000 or whatever. I charge you $5000 to manage your AdWords account, that's what it is.

And then actually, when it comes to labor cost, what you do is, you budget the labor based on the PPC resource costs you to deliver that. So when it comes to blended, I guess you could just divide the service by blended. I don't price the service based on my blended rate of my team. I price the service based on what the market will bear.

But blended is sometimes how you figure out labor cost. So for example, if we are $125 blended which is an easy one to do. Sorry, I am reading the comments as I am speaking. When I say blended rates, it's $125 because it's easy to do math on that and you charge $5000 for a retainer. Basically you have 40 hours a month at $125 that you can allocate to that. That's the rough math.

We will use the blended rate to say, if we get this contract for $5000 and then we have 40 hours to do it, that means an average person, if they work 160 hours a month, then this person can take on four $5000 accounts. That's one of the ways that we would roughly forecast headcount.

Now lesson 21, I gave you a different way of forecasting headcount, because we use multiple methods. There is the back of the napkin math. Which I think, blended hourly rate is really a back of the napkin calculation for me. Because it's not really getting into the nitty-gritty of what a PPC person cost us versus another person in the company. It's basically saying this on average what does this cost.

So, I'm not sure if that answers your question but we charge a service based on market and then we figure out headcount or at least workload for somebody based on a blended hourly rate. That's really the rough way of doing it.

But when we brought in our accounting manager or a controller of our company, they didn't want that back of the napkin math. That was more of a sales person math. The actual accountant will get a lot more detail than that. They don't want to hear that salesman crap.

I've been all the roles. I've been sales person, I've been account manager, I've been on the finance side, agency owner and everything. So I do blend these things together a little bit but basically blended rate was a sales person term for me.

Thomas recommends Toggle. I've to check that out as well. We do make some recommendations around hours and time tracking we share that in the project manager unless which I think goes live for all of you today. But I'm not sure if Toggle is on there or not but we'll make sure that we at least check it out.

Fred, so the math basically on PPC was, we had a minimum retainer or a percentage of spend, whichever was greater. Here is how the flow will work for what I charge to do PPC for a client. They would come to me and they'd say, I want to spend $10,000 worth of AdWords. That was what they'd say, they'd say, I have a $10,000 a month budget with AdWords and maybe we'll go up to $15,000 during the peak time but $10,000 a month is what budgeted for.

And that's what they'll tell me. And so what we'd do, we'd come up with a proposal and say okay, to manage that $10,000 we are going to charge you $2000 a month or 12.5% or 15%, really depends on the client and the industry and how much work it's going to be. We are going to charge you $2000 or 12.5%, whichever is greater. And so we had a minimum of $2000, even though that was more than 15% if you do the math. On a $10,000 retainer, on $10,000 in spend.

But we would do that because we just needed to protect. There is a certain minimum cost to doing business with these people. And actually this is another time that I would use blended rate just to figure out if this made sense or not from a sales perspective.

So what I would say is, it's not that I'm charging you $2000 which is higher than 15% of your spend or 12.5% of your spend. What I would say is, if you look at $125 an hour as a blended rate, that means you have somebody for 2 days a month managing your account. And so then I'd say, can I do a good job for this client with spending two days a month managing their account? Two days a month to me ends up being, it's 16 hours, that means that it's one hour basically every weekday or one hour every weekday and a half.

And so that's how I would figure out whether I can do a good job or not. Can I do a good job managing AdWords, if I'm spending less than an hour a week, will they get the results they are looking for? No, you can't give them the results if that’s what you’re doing.

I would break the market down into whether I can deliver it or not, and if I knew I couldn't deliver it then I'd still charge a high amount of money because I was like, I am not going to work for free and I am not going to be able to give you results. So I don't care how much you’re spending with Google, this is what we need to do a good job for you. And that's why we have this minimum or percentage of spend. Because a lot of people will say percentage of spend and they don't realize that, that is just a cost to maintain a relationship.

There is an expense just to have a relationship with a client and it's probably in thousands of dollars for every single client a month. At first minimum retainer $500, then it was minimum of $1000 and eventually it went up and up and now I think the agency is looking for $100,000 in yearly revenue to even be excited about working with somebody. And you can see how the evolution goes because the more layers you add, the more time, the more expense there is to maintain a relationship.

I am just reading the rest of the comments. Dietmar says, if the budget of $10,000, $2000 would go towards the agency PPC. We would charge ours on top of the amount. So we would do 10 to Google and we would charge them 2 on top of that or whatever it is. So they would actually have a $12000 budget.

There is a couple of ways to bill that type of service, PPC services. You can say your budget is $10,000 and we are going to take 2 out of it, like we were talking about, or you can do it on top. It really depends on how you set it up.

Obviously, if they have a $10,000 budget, then you take $2000 out of it. Now your cost looks even bigger. You are basically saying I'm going to charge you 25% management fee as oppose to if you do it on top and it's only a 20% management fee. So I think it's better to do it on top, it makes your numbers look better. And also it's just cleaner.

I also learned that if a client has a $1000 a month budget, I just probably wouldn't agree to working with them much at all. But I just wouldn't do it.

Okay, so Thomas wants to know, without going too far on the rabbit hole, if you collect ad spent how is it you taxed on 1099. Doesn't that increase the old taxes? No it doesn't do that because it's basically a pass through expense.

So if you remember lessons 2, when we looked at the financial statements and we were showing you the publicly traded companies, basically your media, you subtract that from your gross revenue. Or you can record it on your gross revenue or either way it backs out before you even get to your labor expenses. And so it doesn't drop all the way down because at some point it offsets. So even if you put that as a revenue that you pay Google, it gets offset and your cost of doing business of your cost of goods sold. It doesn't get passed that top part of your financial statement.

Okay, so I'm going to keep on going. These questions are great so keep on asking them and we'll keep on going. How much time did you spend working on your agency online presence? Doesn't look like people are spending much. A couple of you are spending whole day and the majority of you are just like less than an hour or an hour a week. Obviously, that can be improved upon.

How would you rate your agency website? One of you has a good website. The rest of you are saying average to below average. Whoever has the good website, if you want to drop your link in the chat, we can take a look at it and see what we think about it.

And nobody wants to join us in the hot seat. I was a little bit disappointed in that one but I think it's alright. We're already half an hour into this and so there is a lot more to talk about.

I don't think I've missed any questions, but if I have, just bump it to the top otherwise what I'm going to do is, I'm going to go into the individual statements that we looked at. And then we're going to see how that goes.

Oh it's Steve who spends all the time on, his is the great website, or Stephen. It's not bad. I'm now on the vivid image website which is a rabbit hole that I'm going down. You guys should check out his company website. It's pretty cool. Nice work Stephen. He thinks this is average.

Okay, so we have already addressed the calls and other happening too quickly. A lot of you are saying that it's actually pretty good and we're going to continue on next week.

So what do you view as a key to a healthy client relationship. These are free form answers that I asked you to put in there.

What's working for your agency? Honest communication, adding value to their business, interest in their personal lives. Most of your clients are friends either before or during the working relationship.

One question I have for you is, are these people that are your friends, are they a long term relationships with the clients. And are these relationships lucrative for your agency? I don't want to put this in a bad way because these are your friends, but do these friends that you are working with, does it cause issues with not being able to expand beyond that? Because of loyalty and because you don't want to charge a friend too much.

I am just curious about how that dynamics works. Because I think that can be an interesting dynamic to work through for people when you have a personal relationship. Especially if the relationship was before you went into a business and started working with them as a business. So if you have any comments on that Thomas, would like to hear what your experience is.

Ryan is saying being consistent, communication being transparent. It's also important to fulfill what you got to do. Absolutely. You want to be clear with your clients as to what you are going to do and if you run into problems, let them know. They don't need to know every single detail about what you are doing. But if it's going to get in the way, then be transparent.

You probably know this, but if not, I am doing the digital nomad thing. So I've been in about 20 countries over the last few years and we travel a lot, my wife and I. I'm in Thailand right now and that's the reason why these calls are such weird times.

But anyway, I had a client that I was working with when I was traveling through the Nordics a couple of months ago. And I didn't let them know that I was in Norway until it came up that I was in Norway. So I was doing analytics for them and I was doing an audit or something. And I couldn't get into their site because they blocked me because of some kind of proxy or IP detection. And that's finally when I let them know I am in Norway and that's why I can't do calls at this time and that's why I'm having trouble here. They took it in stride. They thought it was cool.

But that maybe not transparent enough, I'm not sure but it's been fun little experience for me to see how much do you communicate with clients. Where they are like, that's cool that you're traveling versus they are annoyed with you that you are traveling too much. So you have to decide how much transparency you want. I guess that's what I am saying here.

I didn't start this course by saying Jeff is a digital nomad or whatever. It's not really relevant. It's what you are learning here. But then eventually it could become a factor in what we are talking about. So that's how I balance things.

You don't want to give away too much but you also want to build a rapport with somebody or with your client. And also do what you said you were going to do, obviously, right? So Ryan I think that's really important.

Ryan I think that some clients are jealous or basically like, that sounds really cool, I want to do that some day and they ask me a million questions about it. And then other ones just hate my guts because I tell them that and they are just mad.

I only do a certain types of projects while I'm traveling because of that exact reason. I don't want to work on something that's super high touch, super phone intensive or real time with somebody. So a lot of audits, a lot of different things that I can do and doesn't matter what time I work on it.

Thomas, that's cool to know. You're just getting started and everything. I get it. And you've given them a fair but valuable plan and some move on to others and you've had to move on, that's good to know.

Since you are just getting started in that area that's something you just going to have to be aware of and keep an eye on is just how much are these relationships getting in the way of the rest of your agency thriving. I don't mean that in a negative way.

The first five or six clients that I had were hotchpotch of cousins and friend of a friend and people that, basically I just took on any project that would pay me. Eventually I just started to work away from that because I didn't want to have to mix those things. And actually I prefer not to work with people that I know, as much as I can because of that same reason. Because I just don't want to mix those things together. I don't want it to be personal.

When I say that's different than getting to know your client and liking them and taking interest in their personal lives. So what Alvaro was saying is, taking interest in their personal lives, without being creepy, knowing when their birthday is, how their kids are doing, when their next vacation is. It's critical to building a long lasting relationship. I agree with that.

You are right, the line between being creepy and not, is difficult. For example, I'll 'like' one of my clients when their kid does well in baseball. Which is just like saying awesome, congrats. But also that is creepy.

I don't know, there is a fine line. Do you become friends with your clients on Facebook or not. Do you participate, do you like photos, how much do you do. But I think the more of a relationship you form, the better it is with that relationship as oppose to not doing anything at all.

Timely updates of the statement of work, providing reports on their rankings. I think anytime that you can communicate that goes along with transparency but this communication and just staying in front of them, top of mind very important. Sharing the results as much as you can is definitely a good way to go.

Alvaro, I see what you're saying. Avoid social media relationships. I would agree with that for the most part. It depends on what you're trying to do with the clients and it depends on what you are trying to achieve. It works well in some cases but doesn't work well on others.

George's comment on client relationships is, that having the expert also be the account manager is the key to a good relationship. I love that. I agree that if you could have the subject matter expert working on the account and talking to somebody, it does really help the morale of clients so they can just go directly to you and they know who they're talking to and they know that you have the results. That seems to work well.

When my agency moved away from that to more of an account management model, it was nice because they can always get somebody on the phone, they could always talk to their account manager but it did take more time to get the results. I would say it was positive.

I wouldn't always answer the phone if somebody called me. Because I was too busy doing the work. But if you are an account manager, they will answer, they'll be responsive. So what you lose in subject matter expertise, you make up for in responsiveness.

I am not sure if it's true one to one cancel out or not but I like what you're talking about is having the expert be the account manager. It goes a long way with certain clients, the ones who value expertise especially.

So Fred is saying, key is, ongoing business, quickly paid invoices, clients who appreciate the work you do, clients who trust you. Yup, absolutely. Those are all really important as well.

George is saying is it realistic to scale from one to three people who are subject matter experts and account managers to a 20 person agency that does that?

There is a company in the twin cities called "The Ovative Group" in my local area. I think it's And they are almost a hundred people and I went to their offices earlier this year and they have the model that we are talking about. Subject matter experts working on clients talking to each other. They don't have a single account manager on the payroll and I don't believe they have a single project manager on the payroll. And they are extremely profitable, extremely happy agency and they've proven that, that model can work.

And they are the ones I've seen that have been able to pull that off and it hasn't fallen apart, as they get as big as they have. And they have been growing like crazy. So that's one example you might want to look at. I've mentioned this in one of the videos. You can scale without account manager and I think that is mentioned in lesson 17.

But it takes a lot of leadership. It takes so much leadership and fortitude to say no, we are not going to become a company with account managers. We are not going to become an agency, we are just going to be experts. It's almost more like a consultancy more than an agency. Because the agency model in my opinion and my view is that an agency has account and project teams. And that's part of what it takes to be an agency is to have that process, to have the layers within an agency versus a consultancy or working with consultants.

So, it's possible. That's a good example of who you might want to look at. They are called Ovative Group. I'll type that in there because I'm not sure you guys--It's Ovative Group. Okay that should be in there.

See I think you can do it but it's painful because, if you just want to do the work, that model doesn't allow you to just do the work. You have to answer the clients and so you have to be the one who does the work and you have to be the one who tells the client about the work that you did.

And so you have to be able to turn one side of the brain on that's all happy and talking to clients and happy go lucky, and then you have to be the one who sits in front of the computer and gets the work done or has a team that gets the work done, in-between. So, it's hard to find that balance where you can just be on, in social and then be the one sitting in front of a computer. I think it's difficult.

The hard part about scaling is not whether it's a good idea or not, it's whether you can find 20 people who have that same skill set that you do, in your area. And who don't want a ton of money to get paid for it.

So that's an agency that does really well. I actually picked the brains of one of my friends who works there and several people who work there. They all basically say, it comes down to strong leadership. They have a great leader who wills it to the finish line when the tough gets tough.

Okay. So what's unhealthy about the relationships? What are your pain points. Slow payments, slow to provide approvals. Don't let you do your job. I agree with that. I think that's a tough part about clients. I think sometimes when I'm the client. I am probably a bad client too. Because I, not so much slow to pay but slow to approve things.

I think that's one of the things that eventually you can start to sniff out people who are going to be super slow or at least account for them. So even if they sound like they are going to give you a bunch of money, if you know they are not going to be doing what you need them to do, then that might be a bad client.

Now Thomas, your situation is unique because you are using friends and family as a bridge, as you get your business sorted out. But I do agree that if you are committed to making your agency work and delivering awesome stuff for your client. And if they are not committed to their business or they are just not focused on it then that is the same as you not being committed. Even though you are, it just means that you can't give them the level that they need and so that can be a sign.

It usually happens at small businesses that are trying to wear too many hats. Like the owner is trying to do marketing and business planning and everything. So that's usually where that comes from. So bigger businesses have big challenges as well you need to go through.

But it's usually at least staffed or at least planned upon that they are going to have these functions. So they have created roles to handle marketing versus the owners doing the marketing when they have time. When it's a role, then at least it gets addressed. Maybe that's my naive thinking but that's how I look at the difference between them.

Clients don't trust Ryan's processes and they want to do things their own way or tell you how to do it. That's annoying. I mean when somebody brings you in as the expert and then try to tell you how to do it.

Ryan, what's your business that you are in, again Ryan? If you can share that in the chat. I can talk about that and add some insight to it. But I just think that if a client doesn't trust your process and they are hiring you as the expert. The only time I'll accept that is, if they pay me a ton of money to do that.

Yeah that's right. I thought you're a web designer, Ryan. That's a little difficult, because with web design and everything. With creative and stuff like that it is up to the will of client.

Now if a client wants to pay me $500 an hour to help them with their strategy and then work through, and mediate that strategy for them, I'll take that as long as the clock keeps on ticking. Sometimes if you are charging by the hour or if you have upside for working with them, it can be worthwhile to get paid as they figure it out. But other areas it's more difficult like creative, that usually just adds to your hours. It just takes more time, it doesn't really save you much.

Yup, Hippos (Highest paid person opinion). Thomas, I hear you on hippos. Although I think that sometimes they are villainized, because they represent something that's beyond the project that we have at hand. They are usually the ones who have to deal with the bad news and the overall workings of the business. So sometimes they are just giving us bad messages that they have nothing to do with. But then sometimes they just think that they are older, they've been around, that their opinions are worth more.

Alvaro is saying, clients are going AWOL, no matter what they do, you can't talk to them. Yeah, that happens. Again, I think it seems like it happens more with smaller clients, smaller businesses, where the function that you're performing is a small part of what they do and they know it's important and they think that you're going to solve their problems for them but then they actually can't get it done or they can't give you enough so you can get it done.

Generally speaking, what I would tell you is try to eventually get bigger clients where marketing or whatever you provide them is a function that people have jobs to do and that way they are going to look at it. For example, if I am working with analytics department, they are going to be a lot more responsive, because that's their job day in and day out, than if I work with somebody who is just doing analytics on the side, for example.

Dietmar says, matching value creation with agency workload i.e. what is the client actually paying for. Yeah, I think it is difficult, is that, a lot of times we do a lot of work, that's just laying the ground work and yet it doesn't necessarily show the results and the clients can have trouble paying for that or they say, hey what am I paying you for again. And yet you're doing all this work. So it's like being busy, yet not being able to prove how effective you are. It's tough.

What I adjusted my model in this case was, that's why I stopped doing SEO because I knew that I had to basically create an entire brand strategy for a client in order to get them to rank in search engines and I was like, but they are paying for SEO or they are paying me what they would pay, they are trying to negotiate with me as an Indian person on Fiverr. And that's not a comparison, right. And so I went to more value added stuff like paid search, analytics things where I could prove the value, because it was directly co-related to their engine.

So, I am not telling you to move away from what you are doing, because i know you do a lot of SEO, but how do you charge for the full complement of things you have to do, in order for them to rank. Instead of them saying I am going to do SEO for you. Can you charge them for other stuff? Can you position yourself more full service than that.

The gap between the expert and the client with an account team working as middlemen. Yeah that can be difficult. I've been on both sides George, of what you're talking about. Having to deal with both sides, that can be challenging, if you are the expert and you're always dealing with middle people. People who are playing telephone and passing the message. It can be difficult to get it done.

When a new marketing director comes in, Fred, that can be difficult. I've had that happen a lot. I am not sure if we've gotten to the lesson yet, where we talk about that. Has anybody seen the movie Office Space? It's like your first day in prison. I am not going to give you the exact quote, you guys can find that quote and share it.

But basically, you need to mark your turf, when the new marketing director comes in. You need to be friendly with them, you need to tell them what you are capable of doing. And you need to make them never question whether you are the one there or not. And sometimes it does cause issue still but that's the way I do it, as much as you can.

This is the last section. What business challenge are you looking to solve for your agency in 2017? New clients? New business? Greater opportunities?

Thomas I think, we are already starting to see some breakthroughs and I think that you're looking to take things to the next level with your business. And I think that, this is a good time, right? You are thinking closely, you have some stuff that's working and now you are starting to project that vision of what the future should look like. And so I think you are going to be able to do all those things. And I think that you're taking the right steps.

Ryan, growing and exiting the job. So Ryan are you doing this part time right now, I am assuming? Either way, I just recorded a bunch of lessons about how to know when you can exit your job. And how do you plan on it.

I actually recorded the most personal lesson, about my exact story about leaving my job and how I did it and how I went through the decision process. I think you'll all really appreciate that one because, I actually created a spread sheet whether I should stay at my job or whether I should take the new opportunity. What I should do? I laid out the four scenarios and I just went for it.

I did this in 2006, January 2006. And I finally did that matrix the four different scenarios first time, to record this video. So ten years later I look at this thing, to record this video. And it was the best decision I ever made. And you'll be able to see exactly how to make that decision yourself, Ryan. So look forward to that one. It's going to be, the first one will be released in January.

Alvaro, landing his first monthly contract. As a freelancer I've only been able to land project work at this point. Definitely I'll start obtaining some recurring revenue. Yeah, I think that every time we talk a little bit more about this, we're getting closer to helping you as figuring out recurring revenue. Even the talk earlier today about how we charge for retainers and how we build that in there. I can tell a lot of you have light bulbs going on around and everything.

So it's just like one of those things where your approach just need to be like, hey, if I’m going to do this for you as a project. You're going to say, how are you going to make sure that stays this way? How do we make sure that stays good? How do we make sure that it keeps on going? And how do you make sure that you continue to get the results? Because if I go away, then this goes away. And I don't want to do work that's going to go away. I want to make you successful.

And that's how you position it and instead of being, oh, once you've done, you're done. Send the bill and everything. You are not done. You can keep on working with them. You can keep on turning it into recurring revenue.

Example that I would give you is when I used to do some web stuff, just for the heck of it. WordPress websites for people, don't ask me why I'd do that. I like to write code and just keeps me fresh. Just writing code.

And the website seems like an end game, right? You charge 10, 20 grand for a website and you're like, okay it's done. You've actually just started a long term lucrative contract that's probably more than the website design, because of maintenance. You can charge them a $1000 a month to make sure the website doesn't break. And these are just rough numbers, say you charge $10,000 for a website and then you charge them $1000 a month to make sure that it doesn't break. What made you more money? The website which is the project or the $1000 so it doesn't break. That's $12,000 over the course of a year.

So you actually make more money doing that then you do designing the website. And so when you think about it that way maybe you give your projects away at a reasonable rate and then you bill them this ongoing thing. As we’ve mentioned it doesn't seem like they are taking on as much. So that's one way to look at it.

Same with PPC, you need to get your AdWords account in order. Okay well, guess what your AdWords account isn't just in order on a date. It's an ongoing evolving thing. Once we get it in order, we need to maintain it. I need to get my analytics in order. Same thing, your analytics might be in order today or what happens if it screws things up, you need to pay me to keep an eye on it.

SEO is a living and breathing thing. Everything we do in this industry, what I call the digital world, the digital agency would focus on, everything we do as a project is to take somebody to a point in time. Everything we do as a retainer is what keeps this thing as future proof as you can be. It keeps things continuing to go forward into the future.

And so that's how you want to look at it, is that for everything you are doing as a project keeping them at the same high performing level you delivered on your project, is basically the reason for your retainer. So your retainer ultimately just becomes doing more of that. Keeping them up to speed.

I think that's actually a very good way to look at it. I've never really thought of it that way until I say it out loud right now. That's the thing that really keeps things going. Is that how do we keep them up to speed. That's what you are paying for and that's what the value is.

And so, you can do all the projects you want, but to keep them at that great level, that's really where the recurring revenue comes in. So, I think you can really turn almost anything into monthly recurring revenue, if you want to. Maybe that recurring revenue is just your expertise, just keeping your expertise.

I'm just reading through the comments that I saw as I was talking there. I mean Facebook ads I think are a good place to go everybody. I agree with that.

Ryan, I would say that, you talking about how website is not charging enough and then not having recurring revenue and then also not having anybody going to the website. Those are all evolutions, right? To know that a website alone isn't a strategy. It's basically just a means to ends, not the ends. That's good to know and that's good to go through.

Great, so I was reading through the comments and so I am going to keep on moving on.

Dietmar, you have lead gen, these are the things you're going to focus on 2017, leads gen. Building process around deliverables, communication strategy, cash flow management and scaling the team. Those are all great things you need to work on and I think that, obviously they all trickle down, right. So you need to lead gen and growth in order to grow your business, and then processes are going to give you margins.

I'll be curious about your communications strategy is that internal, is that external.

I think cash flow management is vital for all of us to figure that out. And then scaling and knowing when you can scale. Again, we have lessons coming up, where we talk about that. How do you know when you can scale your agency? How do you know, how much cash you need on hand to have employees and what considerations should you make.

These are all the things you need to focus on. Obviously, for every business but especially 2017 might be the time to start.

So Dietmar, I am not sure if you have any specific questions that I can help with it at this time. But I think there is a lot of video content, that's really going to come up, that is going to help you with that piece.

George wants transition from a freelance model to an agency model. This is before I talked about how the model you were mentioning was more maybe a consultancy than an agency. But I know what you're talking about basically instead of being a small shop with you and your partner and maybe another partner or an employee. How do you grow, how do you get bigger in your responsibility and in your scale. We've talked a lot about this even in today’s call, about how do you grow with or without account management. Do you have any questions or anything I can help with right now, let me know.

Then Fred wants to sell out more recurring revenue deals. I think, Fred, you're in the web business as well. Hopefully that little stream of consciousness about how people are paying to keep up to date. You can find some way to keep that going.

I know web design is a tough area, because there is just so many varied levels of service providers out there that people don't want to pay for maintenance. But they'll pay for good maintenance. They'll pay for things that keep them going.

I think you can definitely get to that point. And obviously now that we see the value of recurring revenue from the course, a lot of you are going to go after that model, because it makes so much sense.

Okay, so let's see, I like this little side conversation that's going on with everybody, about Facebook and AdWords and everything. I don't get asked doing one or the other, I do think specializing is good. But I think PPC is enough of a specialty. I think PPC is enough of a specialty. You wouldn't niche down there to Facebook or AdWords.

Remember, you need to get experience, you need to figure out which ones can be more lucrative for you before you niche down fully. So you can't do the 80-20 rule until you have enough experience to know what the 80 is and what the 20 is. That's really what it comes down to. I think it is possible to niche too early to eliminate something that could be a revenue source.

I also think that AdWords is a more mature. And there is more providers in that area that are around and so Facebook might have more of an emerging feel to it. Again for both of those, maybe you can take an angle of mobile or how mobile works into it. We talked about that in our first call. Just that mobile sort of is the angle on everything.

So the increase spends that we're seeing in digital marketing is mobile related. We are getting more spend in digital advertising, it's mostly going to mobile. So how can you take that angle, for example?

If you guys want to ask me private questions that we don't talk about in the call, we can send me an email or ask me in the forum, happy to answer those questions. I am just looking through the side here to see what is coming along here.

Digital advertising is going to surpass TV in 2017. It's not surpassing all traditional. it's passing TV.

Fred, sorry about saying that, it was more a website design, I know you do a lot of stuff. I can't remember what you guys do off the top of my head. But great, awesome.

So, any other questions you guys have? I think I am caught up on the chat window that's there. I think we had some really good conversations going on here.

Alright some of you are going to ask me some questions on the side. I have gotten through the scheduled material. I am going to stop my screen share and I am just going to leave it up to you guys. I know we're passed the hour mark already, but anything that you want to talk about with me.

Fred, I feel like that's a made up excuse. Fire marshal is here for an inspection. But either way, thank you.

Thomas, yes you have access to the course after it's over. And actually for those of you who are in the beta, I am going to let you join these calls again when we do them for the public launch. So you are going to have the ability to watch or to get in and ask questions and talk to me again as part of this.

So, as beta members, as people who take a chance on this as we were getting started, I really appreciate it. You are going to have some awesome perks well into the future. Thanks a lot for doing this and jumping into it. And hopefully, I know a lot of you are already having business breakthroughs but hopefully we can continue on that way, well into the future.

Because I really want to see your businesses succeed and actually just putting everything together for this course has been pretty awesome in my opinion. It's un-covering, it's like dusting off some things that I haven't touched in the last ten years, since I did my jump into entrepreneurship.

It's helping me look from a ten thousand feet perspective and how this all worked. But it also helps me sort through things that I wish I would have done back in the day. And it validates even the decisions that I make today, to this date. So hopefully it's making those same breakthroughs for you.

If I would have somebody gave me this course ten years ago, when I first started, it would have been pretty amazing to know what I was doing wrong and what I should have done. There is actually a lot of stuff that I shouldn't have done, and I don't necessarily tell you all the time that I screwed up. But there was a lot of them as I went through this.

So hopefully you can prevent--not even prevent those from happening, you are going to do stuff that you'll regret and you are going to do things that aren't the best way to do things. You'd have to get those experiences on your own. At least you have a structure now. At least you have a structure that you can go with. So, I am really happy that you're taking this course.

Ryan, I just am using WebinarJam, because I have a subscription to WebinarJam and I figure that hangouts would be pretty good. I can look into Zoom, I am fine with something else too. I actually don't know if this is the perfect platform, by any means. I am open to suggestions. This is really part of working at the beta as doing these calls and getting these things working as well.

Alright everybody, I think we are winding down. So thanks a lot for joining me on this call and I think we're going to talk again next week because you asked that you wanted to keep on going. So we are going to power through. We are going to talk again next week and then we are going to have a week off, to end the year and then we'll be kicking it off again in January.

So see you guys next week and then you have a week off after that.

So, thanks a bunch everybody.