Why Agencies Should Leverage Selling Multiple Services

All right, so we have a little treat for you. So this is a coaching call from the Agency Owners Association. This is a group that Neil and I have for agency owners to help you grow faster. So if you're in the agency space, you are a services business, this is applicable to you. It's a little preview of a call. It's probably 10, 15 minutes or so, and you get a sense for what it looks like to be in the group. If you want to learn more about the group, you can go to marketingschool.io/agency. Again, it's marketingschool.io/agency. Hope you enjoy the episode. Neil, maybe we can kick it off with a couple of interesting developments on the agency side and then we can go into Q&A. I think that's always interesting. So I know, so Neil and I, we just came back from HubSpot's Inbound last week. It was a fun time. And yeah, Neil, you wanna kick it off with anything top of mind for you? I have a couple things that I might have, but you go first.

Sure. So, you know, just in general with, the agency world right now, I've been talking to a lot of people who've been trying to grow their agencies and the economy is really bad. And one thing that we've seen just consistently work, but I don't know why enough agencies don't do it. You guys can showcase your hands by just raising them. How many of you guys sell more than 3 services to a customer? And when I say 3 services, not that you offer more than 3 services, but they're actually paying for 3 or more of your services. All right? What we find is when customers pay for 4, 5, 6 services, 3 is the minimum, but you ideally want 4 or 5, churn starts drastically going down. And what we're finding is agencies offer a lot of services, but they're not getting customers to pay for a lot of services. And when I mean services is if you do SEO, content is not another service. SEO is just SEO. Paid ads, you know, would be another service. Organic social would be another service, right? Email marketing would be another service. And a lot of agencies don't offer a lot of these services, but they can cross-sell between other agencies that they can partner with, white label with, and you guys can do that with each other's clients. And it's a really fast way to A, grow revenue, and B, a way to reduce churn. Because what you got to think about is everyone in this group right here, you guys have different clients and some of you guys offer different services. If you can sell your clients on someone else's services and they can sell their clients on your services, you guys will grow much faster and actually have reduced churn and increase your valuation. And it's a stepping stone to getting into things like finding smaller tuck-ins that you can just buy. For example, Eric introduced me to a company that is just burnt out and they're fed up and they just want to get rid of their agency. And a lot of these agencies will do it for $0 because they're burnt out and they still may have $1 million, $2 million, $3 million in revenue, but not a ton in profit. And it's a really simple way to grow agencies, but it's boring, ugly, but it works. And it's what private equity does, but they just do it with money. Who says you need money to do it? You can do it at a much smaller scale without tons of cash.

Agency owners, if you want to grow faster, my partner Neil Patel and I, we are hosting live agency owner workshops in Beverly Hills, and you're going to learn how to get more clients. You're going to learn how to take yourself out of the day-to-day. You're going to learn how to recruit the right people, and you're going to be hanging out with like-minded people such as yourself. So if you want to learn more, just go Go to marketingschool.io/agency. Again, it's marketingschool.io/agency, and we'll see you on the other side.

Yeah.

You know, interestingly enough, Neil, I was in New York yesterday. I'm in DC right now and then back to LA tomorrow. But I was with one of our clients who has a lending business and he lends to businesses, right? A lending business that lends to businesses. And we were just talking about how you can get an SBA loan. So up to $5 million and the rules with the Small Business Administration. This is only in the United States, but there's versions of this internationally as well. But you can actually, you know, get the owner to carry, you know, 5 to 10% of equity. You can roll over some equity, right? Which you couldn't do before. And you can also structure the deal in a way maybe where you defer the down payment. Like you can come up with unique structures, whereas before you needed to, if you're going to take a $5 million loan, you needed to deploy all of it and the founder needed to be out. So these are some things that you can, you can do that's available to everyone here. Maybe not if you're bigger, like, you know, at a certain point, you can't do it anymore. So keep in mind, the SBA does look hardcore at your numbers. So that's one thing, right? The second thing I would say is I'm in DC today because I have a couple of team members here in DC who I've never met before. So I thought I'd pop over here. And then, so I just, I'm like 30,000 steps in today or whatever. So I've had these like walking meetings with them. And the question, one of the questions I always like asking is, what's one thing we need to do to keep you at Single Grain forever? And we get a lot of different answers. One is like, one is money, of course, right? 2 is like growth. And but 3 is like trust. Okay, interesting. Why trust? Like, what does that mean to you, right? I think it's under— it's important to understand everyone's motivations because everyone's different and we're all motivated by different things. And then also I ask, what's one thing I can do personally better as a leader of the company? And virtually all of them say the same thing. It's like, hey, we love your vision, but we need you to communicate it more. And then how we're getting closer to the vision, right? So it might be different for you, but constantly asking that question over, hey, what can I be doing better, right? That's something Neil and I, we ask each other all the time. Hey, what's one thing we can be doing better, right? When we get the HubSpot responses, like our reviews, it's like, oh, what can we do better, right? So I think, you know, couple takeaways, like those 2 questions are worth asking. What's one thing we can do to keep you at my company forever? What's one thing I can do better? And then, you know, the duh statement is in person is always amazing. And so I think one thing we learned last week, Neil, being at the HubSpot event was Just it's really hard to replicate the in-person community piece of it. And, you know, it's pretty magical. The number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is, Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation. That also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would have in the last couple of years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing. They've been a great asset for us, and I believe that they will be a great asset for you. All you have to do is go to marketingschool.io/hire. Again, it's marketingschool.io/hire to learn more. You can fill out the form there, and we're going to place you with the best marketing hires that we can help you find.

Yeah, the in-person is where a lot of stuff happens. Client deals, deals to grow faster. For example, Eric and I were just walking. He introduces me to his friend David, which I already met the previous year at HubSpot. And he's just like, you guys should do a deal where your agency should end up, you know, becoming one, however you want to slice and dice it, whether we buy them or, you know, we work out a deal with them. And I was like, yeah, we're looking to buy agencies within your region. And they were in Spain specifically. And he's just like, yeah, let's set up a meeting and discuss more. And instead of long playing it and just beating around the bush, I was like, hey, what's your size? He tells me his size. What's your client type? He tells me his client type. And he's like, what do you pay? And I tell him roughly what we pay for companies. And we were kind of aligned, not fully aligned, but close enough to move forward because we're roughly on the same page, although details need to be worked out. And I don't know if it's a good fit and he doesn't know if it's a good fit. I was like, cool, let me introduce you to my head of M&A. And he's like, all right. I'm like, what's your phone number? Get it right then and there on the spot. Do a text introduction. They set up a call. Within a week, they have a great call. NDAs are signed. Their CFO is trying to send us all the data room. And then on our end, I already have my head of EMEA meeting up. He's like, oh, he's in London. I was like, oh, my head of EMEA is looking at another deal in London. this Wednesday coming up, so next week. And I added him to a text thread. I'm like, hey, you should meet him while he's there because he's going to France to meet an agency that we're interested in looking at. He's going to London for another one that we're interested in. And both of those, there's a good chance we'll put out an offer. But all of a sudden, that in-person, you can't replicate that. A lot of stuff just happens in person that you couldn't do elsewhere. But also speaking realistic, Look, money is tight. This economy is bad. If I actually had to tell one thing for you guys to do, it would be to figure out how to partner with other agencies. I'm not— forget selling, forget buying or any of that. Your clients are different than another agency's clients. How can you sell all your services to their clients and vice versa? I know there's some overlap, but there's also a lot of things that don't overlap. And that's like one of the simplest ways to grow. Agencies keep thinking about getting new clients instead of continually landing and expanding. The way we make our money at NP Digital is we'll close a big brand and it may be a tiny amount of money, and then we land and expand them. We sell them on more regions, we sell them on more services, and then we sell more divisions. So, and it doesn't have to be a big corporation. There's a lot of mid-sized companies that you can do this with too. And I'll give you an easy big example because everyone is familiar with them. So let's say you want to work with LVMH and you can start by working with Louis Vuitton. You close them in one region, you sell them on maybe SEO, you do well, you get them on SEO for many more regions. You do well, you say, hey, can we also start doing paid ads for you? CRO. Oh great, doing a good job. Hey, you guys also own Loro Piana. Can we get an introduction to that brand? Oh, you also own this brand here. Can we get an introduction to that brand? So then you're going after division after division after division and running the same playbook. All of a sudden, you can get one client to pay you not just, you know, a million bucks. You can get them to pay you four million, five million, ten million. It's a long play that takes many years, but it's a very effective strategy. And this is how the big holding companies. make the majority of their revenue, land and expand. It's not, hey, live and die by the deal. What is the deal that's going to come in this month? A lot of it is we already have clients. How do we just get them to pay for more services and more divisions of their business?

Right. So one other thing I'll say, and then we can move into Q&A. So Neil, yesterday, let's just say I was working on a couple of things, but I went to like a private, let's just call it like a watch showing or whatever. Right. And I'm not into watches. Maybe you are more so than I am. Are you still into watches?

No.

You don't care anymore. Yeah. Neil used to have a pretty good watch set, but anyway, I digress. So it's this one meeting that had a couple of executives there that came from a lunch meeting on a Monday, a random lunch meeting, just saying, hey, I'm going to be in New York and that will lead to Potentially a podcast deal, potentially some other deals there that I'll maybe fill you guys in on after these close. But basically, we shook hands on it yesterday, and that was just me being in New York. I had no expectations that that was going to happen. In Boston, I met one of the AOA members, David Kim, for dinner, right? That goes a long way too, because we haven't had a chance— we get a chance to connect maybe once a year or whatever, but I think he got a lot from that meal. More than anything, I got a lot from that meal too, 'cause I asked him what's the main value of this group, and he said it's this Q&A, right? So I'm like, oh shit, we probably need to do more Q&As, and so that's good feedback.

All right guys, that wraps up our call for today.

If you're watching this live, you can always go to marketingschool.io/aOA, and you can apply for the community.

We'll see you next time.