Did you enjoy this show? Trent shares great business building nuggets every week on the Bright Ideas podcast.
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https://brightideas.co/wp-content/uploads/2014/08/TrentCaricature-682x1024-e1409090800597.jpg300200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-08-28 06:00:002016-01-20 10:48:53How to Start a Business with No Money
Mark Lerner is the Director of Marketing for Oktopost, a social media marketing and content distribution platform for B2B companies. Mark is a jack-of-all-trades and his roles include social media marketing, content marketing and distribution, business development, and growth hacking.
Groove Digital Marketing has recently started using Oktopost in our own business and we really enjoy it. (Hint: try it out, they offer a free trial.)
If you are not familiar with re-purposing content, this interview will show you how to save a ton of time and produce a high volume of content with less effort than you think. Of course, you will also learn how to use Oktopost for social media content management and promotion.
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
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If you would like a transcript of the show please visit the original interview published at GrooveDigitalMarketing.com/12
About Mark Lerner
Mark Lerner is a marketing guru with years of experience in the world of startups and social media. He’s the Director of Online Marketing at Oktopost – the B2B Social Media Marketing Platform – Tel Aviv, Israel.
Mark has a BA in Psychology from Boston University and an MBA from Florida Atlantic University. He joined the Oktopost team in late 2013 and has helped take their marketing activities to a new level.
https://brightideas.co/wp-content/uploads/2014/08/Mark-Lerner.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-08-25 06:00:152020-09-17 03:18:03How Oktopost is Building Marketing Share Using Inbound Marketing & Crafty Social Media Promotions
As founder of a $3M+ agency, Dan Greenwald is definitely someone worth listening to.
In this conversation, Dan Greenwald shares what he is best at and sheds light on some of the psychological and emotional drivers that cause people to buy, including his take on B2ME sales and on creating an addictive experience. Curious? Listen to the interview now to see what lessons you can learn from this ultra-successful marketer.
Listen now and you’ll hear Dan and I talk about:
(01:05) Introduction
(02:00) Which niches do you specialize in?
(03:30) What are hospitals struggling with most?
(06:00) How does B2ME help companies to eliminate guessing who their target buyer is?
(10:00) How does your interview process work?
(14:00) Why are the drivers so important in the B2ME process?
(19:00) Can you give an example of this?
(22:00) Why is understanding the emotional connection so important?
(24:30) What is the addictive experience?
(30:30) How does gamification play a role in an addictive experience?
(35:00) What technology are you building these games in?
(28:00) What has the impact on your business been?
(40:00) Please tell me about your vision of AX on healthcare
(43:00) How did you get traction in the healthcare niche?
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters. Welcome back to another episode of the Bright Ideas Podcast. This is episode number 148, I am your host Trent Dyrsmid and this is the podcast where we help entrepreneurs to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their business.
If you’re an entrepreneur and you’re looking for proven ideas to increase traffic, to increase conversions and ultimately to attract more clients, well you are in the right place. And the way that we do that is I bring proven experts as guests on to the show to share with you and to share with me exactly what they are doing to achieve success. There is no theories and no pufferies here, just real life stuff that is actually getting the job done.
In this episode my guest is a fellow by the name of Dan Greenwald. He is the head of an agency by the name of White Rhino and Dan’s agency is doing some really, really interesting things in the areas of creativity in the Addictive Experience. We also talked a lot about his B2Me process. So I think you are going to find this episode to be a little bit different in the topic than many of the other episodes that I have done with other agency owners.
So make sure that you grab your pen and paper and that you are ready to take some notes because there are some really cool stuff in here. Before we welcome Dan to the show, quick announcement, I get a lot of email from people asking me, “Trent what tools and resources do you use for landing pages and marketing automation or analytics or split testing or getting visibility into who is seeing your proposals?” or whatever.
I have a page that lists all that stuff and you can get to it at GrabTrentsBonus.com and as the name suggests if you do decide to use any of the affiliate links to buy any of that stuff, of course I get paid a little bit for that and you have my thanks for that. But you get a little bit more than that.
You get a bonus and there is instructions on the page and all you need to do is email me your receipt afterwards and I have a couple of my paid products of which I’ll let you choose from and you can have one of them for free.
So with that said please join me in welcoming Dan to the show.
Hey Dan welcome to the show.
Dan:
Hey Trent, thanks for having me.
Trent:
Yeah no problem at all, thanks for making the time to come and share your ideas and insights with myself and my audience. Folks what you are going to hear in this episode is some stuff that we haven’t talked about before.
I am going to let Dan introduce himself in just a moment but we are going to talk about something that he calls his B2ME process which I am particularly interested in and I think you will be too, once you understand what it is. And as well; if time permits; we are going to talk about something called the Addictive Experience and the reason that I think that these are going to be so interesting is Dan’s agency has become quite a success and I asked him before the record button.
I said, “Dan what are you really, really good at?”And these were his answers and that is why we’re going to be talking about them during this episode. With all that said, Dan, who are you and what do you do?
Dan:
First of all, great intro, I think I need to be more synced in my intro. I am the founder and creative director of White Rhino. We are a strategic creative marketing agency based outside of Boston Mass. We specialize in B2B and healthcare clients and really we like the most complicated businesses. We call ourselves marketing masochists here at White Rhino. Whatever it takes to uncomplicate the complicated is something that we really enjoy doing.
Trent:
And your agency is about a 3.5 to 4 million dollars a year agency in revenue at this point?
Dan:
That’s right.
Trent:
In the world of agencies it is a pretty decent size agency. So folks Dan is a very credible guy to listen to, grab those pens and note pads and get ready to take some good notes. Alright so you have talked about uncomplicating complicated businesses. Do you have a few niches that you have gotten more traction in with your agency than others?
Dan:
Yeah, I realize that B2B is kind of a broad space but generally with the complicated B2B businesses we’ve been very strong. And also in healthcare space; notably in hospitals and hospital like businesses. So first of all when you think of B2B, a good example of a complicated B2B business is Enterprise ERP software companies. One of our clients is SAP, a very, very complicated business to explain.
I like to think of it this way. If you look at an ad and you see a sneaker or a glass of beer you know what it is right away but to understand what enterprise software is, it takes a little bit to get there. The communication is just a little bit more complicated. The same thing is true with our overall business model. Just the way that they sell through the different channels that they sell; it is a very, very complex business to understand.
Actually it takes years to understand it. The same is true for the healthcare business where you’ve got all sorts of complications going on in the healthcare space. I don’t have to explain that. I think that everybody understands that. Just to really keep it simple and uncomplicated and actually put the patient at the center of the experience is something that is very difficult to do for a whole variety of reason and we think that we are really, really good at that.
Trent:
Let’s hang out on the hospitals here for a minute. Is that one of their biggest marketing challenges? What is their biggest marketing challenge?
Dan:
I think there are a whole bunch of challenges for hospitals but one of the big ones is many, many hospitals are going to be incentivized to actually keep you out of the hospital; which is a very, very different business model than what we have right now.
Right now they are actually incentivized to provide services to you. In the past it has been in their best interest to run as many tests as possible to have you come in to have surgery and have procedures done but they are actually going to be incentivized to keep you out of the hospital.
They are also going to be incentivized to keep you satisfied as a customer, if you will and not just think of you as a patient. So what has happened to change the rest of the business world is going to be happening to healthcare too. Just making that switch and putting the patient at the center of all that and giving the patient much more control is going to be a big initiative because it is going to affect their pocket books if they don’t do it.
Trent:
When you say incentivized is that by the insurance companies?
Dan:
Right, it is by the insurance companies, it is also going to be by the government. So there are some complications there that are pretty interesting.
Trent:
Yeah, no kidding; so in other words we used to pay you when you cut somebody open and now we pay you when you don’t cut them open.
Dan:
Right, we are going to pay you in both ways. There are going to be all kinds of interesting things in place. This example is a bit over simplified Trent but let’s say that you are treated for something in the hospital, so your insurance company pays for it and then you are released, if you return to the hospital within 30 days for the same treatment the hospital can actually get wacked pretty bad for that.
So it is going to be in their best interest to keep you very healthy and keep you out; if that makes sense. That is one example of how that is going to happen.
Trent:
We’ll just call that good customer service after the sale. So when you engage with a hospital like that as a client; they have got to get some message out. They have got to obviously differentiate themselves, they’ve got to make themselves look good, they’ve got to do all the things that you want to do, because at the end of the day with marketing they are trying to drive revenue. Is this were this B2ME process comes into play?
I know one of the challenges; and we talked very briefly about this, that many companies that I’ve worked with at my agency Groove (and I’m sure it’s the same for you).They don’t really have a super clear idea of exactly who their target customer is. They have sort of been successful in spite of themselves over a long period of time.
The marketplace is now getting more competitive, they want to embrace inbound marketing. They’ve got to create content but it has got to be for somebody.
Dan:
That’s right, it is not just in healthcare, the same is true for a lot of B2B companies that we deal with. But you are exactly right. I don’t want this to come across in the wrong way but a lot of our clients are guessing what they think the target audience is. And not only that but what their attitudes are and what their key psychological drives are.
Just because you think it is true does not mean that it really is. And actually it is interesting that you bring this up because I wrote a blog piece last week which actually get a lot of traction on LinkedIn on this company called Solace Health. And I thought it was a great example of B2ME even though it wasn’t our client it is a great example of it. They are a fairly large mammography provider outside of Texas in the Texas area.
For some reason their business wasn’t growing as fast as they wanted it to. Even though the mammography business was growing; so they did a little bit of research to try and figure out why and what they had been using from a messaging standpoint was kind of fear messages like “Don’t wait until it is too late.”
“You don’t want to be that one of eight women that gets breast cancer. Be smart.” Those where the types of messages that they were putting out there but what the research showed was that what that was creating was more procrastination than appointments which is kind of interesting. So they ended up making kind of a bold switch which is instead of pressuring through fear what they came up with was, “When you are ready, we’re here for you.”
And that has really changed the way that they have been messaging and it has been much more effective. I think what that does is it creates comfort and it creates trust. Ultimately those are the kind of emotional drivers almost any marketer wants to give. But certainly in that space it has worked well.
Trent:
Yeah, I could see that that being the case because if it is scary then I don’t really want to find out so I’ll just procrastinate and not do it.
Dan:
When you say it, it seems like it is such common sense and it should be obvious but it is not. You really have to find out for sure.
Trent:
How do you help a client get clear; let’s say you get this company and they are doing a couple of million bucks per year and they’ve got customers all over the map and they are not doing any inbound marketing, now they are going to start doing it.
What is the process that you go through to help them figure out who exactly is our target audience? What is their view of the world? What language do they use? Where do they hang out? This is all really important stuff as you are building your content strategy so you figure out who you are creating all this stuff for.
Is that the B2ME? Is that where you guys use that?
Dan:
What you just described is what I think a lot of agencies are actually really good at. To try to understand who they are targeting. Where they are hanging out, what their PA points are; I think that there are a lot of agencies that are good at that.
I think what makes us a little bit different is that we actually dive even deeper. Our process is primarily an interview process, we don’t believe in doing mass quantitative analysis, we can do it with just a handful, five or six people in the audience from each segment that we identify. And what we do is; we actually have a process that was set up by a PhD, a psychologist and the questions that are asked actually go a lot deeper than the typical marketing questions that you might ask.
So what we end up finding out is what are the real key emotional drivers that might allow someone to do business with you and we sort of pave the way for that, that emotional connection. I think there is not enough emphasis put on the emotional connection. I like to explain to clients that it is really, really critical. And they will always say “Well it really isn’t as critical as you think there are other things.”
We had a healthcare client who is in the radiology business for example. What they felt very strongly was that their size was important; that they were a really large provider in the area to their customer base and that they have the most advanced technology and the fact that they were associated with a lot of high end academic institutions; were going to be the three things that their patients found important.
What we found out in asking a lot of questions and sort of letting the dialogue go naturally where our process took it; we found out that those were kind of away forces for these patients. They felt, “If I was going to be a patient at the largest radiation provider, that didn’t work for me because who wants to be treated by a McDonalds.” And then it was interesting, the concept of advanced technology, they just saw it is marketing BS.
“Shouldn’t you have the best technology? That should not be something that I would have to worry about.” What ended up being really, really important was just the warmth and the connection and the feeling; they wanted people to remember their name when they walked in there. They wanted people to understand what their insurance situation was. Who was driving them home. What it was like to be them going through one of the most difficult situations that life could possibly hand you.
Picture the typical waiting room in a healthcare institution of some sort. You have the uncomfortable chairs and you are sitting there waiting and reading cheesy magazines, maybe listening to lousy music. That situation actually creates so much stress for somebody who is going through cancer treatment.
When they just want to be relaxed and they want to feel calm. People told us over and over again for example that when they were just diagnosed with cancer, they can’t hear anything that the doctor is saying to them from that point forward. So the doctor is rambling off all kinds of things about what is coming next. What you should expect but what they don’t realize is that the person is completely shut down.
So we had to figure out a way to change that process and change the way that people are communicated with so that they wouldn’t shut down and when they were ready to hear it, they heard it loud and clear. So those were the types of insights that really drove our creative process.
Trent:
Yeah and when you hear it, like you said before, it is a lot of common sense. Here you are having this incredibly traumatic event, warmth and comfort, I am going to be a lot more interested in that than features and benefits.
Dan:
Yep, no question about it and that warmth and comfort concept, that goes for just about any industry as well, people need to feel comfortable with you. They need to trust you. And in the end the question is what buttons do you push to get there. There are lots of interesting stories about how we’ve gotten there just by identifying little key drivers in the audience that I would love to get into with you if we have time.
Trent:
So let’s do if we can; and I am totally putting you on the spot for this so feel free to decline, but let’s move away from healthcare for the purposes of this example. Let’s say that you have a software company as a client.
Let’s say they make CRM software for small businesses. And there is lots and lots of choices out there obviously. It is a very competitive landscape. And you are trying to do a B2ME process on their customers.
How many of their customers would you want to talk to, first of all?
Dan:
It depends on how many different segments we identify. So we would probably want to do half a dozen in each segment. So if there were three or four major segments then it is three or four times six.
Trent:
Let’s just use one segment for this, so you get on the horn with these six people from this segment. If I’ve heard you correctly you are trying to understand how they feel about doing business with that software company. Am I oversimplifying it?
Dan:
Let me give you a very specific example, since you are asking about software. So something that we did for SAP, they have been just as guilty as anybody of trying to sell features and benefits. They had come to us with a challenge which was they have this data analysis software, kind of like a business intelligence product.
They wanted to gain some traction, specifically they wanted to drive downloads of demos because that was really the path to sales for them. It is a fairly big ticket item, so B2ME process with their audience; so really what their audience are is what you call data analysts or business analysts. And these were people who were typically treated by SAP as number’s nerds or data geeks. So the question they had for us is, is there a different way to communicate with them.
So when we interviewed them and went through our process what we kept hearing, a theme that kept bubbling to the surface was they thought that in a sense they were the super sleuths. That they were pouring through this data that nobody really understood how to do it except for them. There was a lot of instinct involved in it, that they loved the thrill of the hunt, that they were looking for little clues about things that might be awry in the business somewhere.
Or there may be a reason that something positive was happening that nobody really understood about in the business and it was all in the numbers. And these are people that were just; you know there are certain people that can look at a bunch of numbers and see a pattern and begin to follow a trial. I am not one of those people but these people are.
And what we kept hearing over and over again was that they loved the thrill of the hunt and that they thought that they were detectives. And one of them even used the term, “It is a bit like we are forensic scientists. It is like CSI trying to track down the murderer in the crime. So what that told us was that everything in our creative campaign had to be a challenge for them. It had to be a puzzle or a problem to solve.
And we felt that if we made these challenges irresistible to them, that connected with them in this way, that they would respond. And that ended up being the case. We created this fictitious; we called it the Casino Data Challenge. So we actually created a fictitious casino caper. All the data we made was fake and you had to solve the crime.
Who stole the millions of dollars out of the casino? So we ended up giving RFID chip data, we gave data on how much money was spent at the tables, we gave data on what staff was on during what night. We dropped hints to the audience through email and social media. It drove a tremendous amount of downloads for them and a lot of buzz on the internet.
One of the reasons it drove downloads was because they had to actually use the software to solve the crime. That is an example of how you can identify some drivers. What it ended up doing was SAP realized there was another way of talking to this audience in a much more effective way.
Trent:
To uncover those types of drivers you are not asking questions like, “why do you like SAP and what do you think of their customer service department?” and all the basic stuff. Give us an example of just two or three of the questions that you would ask to steer the conversation to where it really needed to be to uncover the gold.
Dan:
Great question, I am actually not the one who asks the questions, there are a couple of people here who are very good at that. What is interesting is that they would start the conversation just the way anybody else would. So you might say something like: “Tell me about your job.” “What where you like as a kid that made you want to get into this job?” And so you end up getting some interesting stories like, “Oh I always liked math as a kid. I always loved solving puzzles. I could do the Rubik’s Cube in 38 seconds.”
Stories like that; and what are B2B experts are really good at doing is then just sort of letting the conversation flow. Getting to the point where people are opening up. If you are asking questions about what their business pains are or what they like or don’t like about SAP or what features and benefits they like or don’t like; you’re going to get some pretty generic answers.
But when you start making the conversation more of a shrink session some of the things that come out can be pretty amazing. So does that help explain it?
Trent:
Yeah it does and it is a process that I pretty much use in the interviews that I do here. I come in; as my long term listeners probably know; I just keep on digging and digging and digging based upon what I am hearing from a guest and invariably we end up talking about something that I didn’t anticipate we were going to talk about; that wasn’t in my questions or show notes beforehand.
Those are the times that I get the most emails from people listening saying, “Man, you asked the question that I was thinking and that I was hoping you were going to ask.”
Dan:
Yeah and what is interesting about that is that not everybody can do that. It is actually a very rare skill to keep digging and ask questions; the right questions at the right time to keep somebody talking and keep somebody interested. What you want to do in these interviews (and what you are really good at) is you want to get somebody into flow; where they are not even thinking about the answers anymore.
It is just sort of coming out of them. And when you are there and people are almost answering unconsciously you are in the right place.
Trent:
So does that mean you can talk for the rest of this interview now and I can go make a sandwich?
Dan:
Believe me, I can talk for a long time anyway. So I don’t think you want that. You got to rein me in.
Trent:
Alright, with respect to your B2Me process, is there anything that is really important that I haven’t asked you about so that we haven’t talked about it yet?
Dan:
I don’t think so. One thing that I want to point out maybe just to emphasize the importance of the emotional connection; I realize in your audience there is a lot of agency people and we do understand that but one thing that helps crystallize it for me is, we like to talk about that people are actually incapable of making a decision or your audience is incapable of making a decision unless they have that little burst of dopamine right before.
So the irrational connection, the emotional connection comes before the rational connection. So people will decide emotionally that they want to do business with you and then they will look for rational reasons afterwards. That is exactly backwards from the way most companies do it.
Trent:
Yeah and I would echo that, I have been a sales guy and a student of sales for my whole entire life and you are absolutely correct. People make decisions emotionally and then they look for facts to support that decision so they can justify it to other people.
Dan:
And you would think that may not be the case for an Enterprise software company like SAP but whether you are selling potato chips or you are microchips as Gladwell said, the emotional connection is what matters. The decision making is not rational.
Trent:
There is an old expression: nobody ever got fired for hiring IBM. So over the years lots of people at lots of companies; when looking for a software solution there is Vendor A, Vendor B and then there is IBM. Maybe IBM is more expensive, maybe their stuff isn’t as innovative because they’re an older, bigger company; for whatever reason, maybe it wasn’t the best stuff but people hire IBM anyway.
It was an emotion that played a huge role in that decision and it was fear; fear of looking stupid, fear of getting fired. “So I’ll take the safe road and I will hire IBM.”
Dan:
Fear is an incredibly powerful motivator and one that you have to be careful using as a marketer.
Trent:
Absolutely, now you made a comment before and I was so busy writing notes that I sort of missed it and I want to go back a minute. You said: “There is something I want to talk about more if you let me.” I don’t know if that is enough of a trigger for you to go back to whatever that was but I don’t remember what it was. I know what we are going to talk about next but before we transition if you can remember what it was, let’s dive into it.
Dan:
I think I was asking you if we could talk about other examples and I think we covered one or two in here so I think we are good. I think we are ready for the next subject and I can’t remember what that was.
Trent:
The Addictive Experience, what is that?
Dan:
Oh yes, that I would love to talk about. We have been having a lot of success for years developing these very cool campaigns that revolve around this notion that we call the Addictive Experience. First a little bit of background; the problem that the Addictive Experience solves, or we call it AX for short, (of course everything has to have its own acronym, there is just too many syllables for it so we shortened it to AX).
Think about it this way, you are a marketer an you’ve got your inbound funnel, hopefully, maybe you don’t but you’ve got to fill that funnel with all kinds of things like e-books, blog posts and white papers, infographics.
“What can I fill it with? What can I put somewhere in the funnel that is going to be pouring high octane gasoline on the fire to really ignite the thing?” In my mind, as much as I love infographics, I love all those tactics and we do them a lot but I don’t think the world really needs another infographic. It is getting hard to break through.
Trent:
Hallelujah, I hate infographics to be honest with you I really do.
Dan:
Really?
Trent:
Yeah, I can’t stand them. I’d much rather read an article.
Dan:
I would love to hear why because I go off on rants on infographics all the time.
Trent:
Let’s hang out on this for just a second then. I don’t get it. I don’t understand why people get so excited about an infograpic. It is a glorified picture that conveys a couple of bullet points, big deal.
Dan:
Yeah, the concept of the infographic is, to me it is archaic. I get it that people like to do them and when they are done right they actually can be things of beauty. But most of them are static jpegs highly interactive hi-tech online world; static jpegs that require you to scroll down very long distances and if you are on a smart phone for example looking at it you have to zoom in and read all this stuff.
By the time you are done with it you really haven’t grasped anything new. To me they are posters that should be on a wall. They should not be on my piece of content.
Trent:
Thank you, that’s my point. Anyway.
Dan:
We are on the same page. I do think there is a way of doing infographics that is effective and that falls into what we call Addictive Experience and we can talk about in a second. Other things too, we here clients saying things like, “What we do is boring, we have a boring product or service. There is no way to make it exciting.” Or we hear, “What we do is complicated, really complicated, it is really hard for people to understand what we do.”
We also here things about, “How can I educate my audience faster because it takes a long time before the audience understands what we do? How do I shorten the sales cycle? How do I make marketing and sales work more effectively? How do we make our sales team more effective and give them better tools to use?”
These are the things that we hear over and over again in terms of problems that marketers need to solve. Then you think about the types of content that are out there and what we know is effective. Even though I know you love reading Trent and I do too, reading is actually of the lower engagement items out there.
It takes a lot of work from the user to get there and the subject has to be really really good in order to grab somebody for a long period of time. But next beyond that is audio, like this podcast. You have better engagement with audio. It is a little bit easier for people to engage. And then as you move up the chain, pretty much anything visual is better than what you read except for infographics.
Of course video and animation has really moderate to very, very high engagement depending on how well it is done and how well it is hitting home. At the very, very top end is something that we would call experiential. And this is where our Addictive Experience comes into play where it not only includes audio and video and possibly some text but there is also the user engaging in a way and playing with it.
There is a game element to these addictive experiences. Now think of that infographic and instead of it being this long scrolling infographic, picture it being a very simple graphic that as you click on it, it is interactive and it expands and it goes where you want it to go. So if you click on something and it tells you that a particular region has something interesting going on and that region is not in your region then you are not going to care.
So you click on another region and you dive in there and you learn more and more and more but it is your own experience and it is highly engaging and it is highly interactive. It’s fun and somewhat addictive because as you move along, every time you click something, something fun happens. And that little dopamine rush keeps you engaged and you keep going; there are all kinds of game elements that we can build in and make that kind of thing work.
We are now to the point where we are actually even building very experiential 3D games that still work in the business world to get across very, very complicated concepts. One example is we had a client who makes X-ray equipment for Homeland Security and typically their products are very, very large. They have these huge X-ray machines that can scan trucks and cars and very large vehicles.
And they figured out a way to actually turn that in to a very small handheld item and they are about to release that item to the world. This is kind of like their big iPhone. It’s amazing that they are able to even do this. The problem that they are having is that they don’t think that the audience is going to understand exactly what it means to them to be able to have something that is handheld right away.
They also don’t want to send sales people all around the globe to give demonstrations because it is going to be too expensive for a product at this price point. So what we created was an actual 3D game where you get to be the Homeland Security officer going into a port or an airstrip or subway station and use this device in a virtual way to figure out if there are hidden drugs or if there are weapons or explosives or you name it.
So we actually turned it into a little bit of a game where they’re being educated all along the way. And that is an example of an addictive experience that actually serves a business purpose and really educating the consumer and providing a very long term period of engagment.
Trent:
So a visual would be wonderful for this game that you are building or do you have another one that you are building that is on a web page somewhere that I can link to from the show notes for this episode?
Dan:
Yes, there is a link up there that is at WhiteRhino.com /ax. And we are putting some links up there to pieces that you can take a look at including one that we just did for SAP which is basically the infographic example that I just gave you; the interactive infographic which was very successfully received.
Trent:
Okay, so there is the SAP casino challenge, sadly the folks who are listening to this are not going to be able to see this but they will be able to check it out afterwards. So I see that there is a video there; if someone wants to get the visual representation of what we just spent the last five to ten minutes talking about. Is that video the best video to go and watch?
Dan:
We are going to have a couple of other links up there, I will make sure that the three examples that we talked about here are up there so that they can go take a look at them. The one I just described with the X-ray content is for a client called AS&E and they can check that out. And it really is a great piece and what I think a lot of marketers would like; especially the content marketers, is that it integrates content marketing through the entire experience. As you are going through the experience there are little pieces of bait to get you to download content and give up your email address.
Once we have that, then you are into the nurture flow. So they are beautiful in the way that they bring it all together in a very engaging, dopamine ridden way.
Trent:
From a functionality perspective this is landing pages on major steroids. Because on a landing page you are trying to get someone to give you to opt in and with appear to me that these would be far more compelling than a landing page because of the very nature of the fact that they are addictive and they are fun and if I click things, things happen and it keeps me going. It increases engagement and it is going to make me want to ultimately opt in when I’m given the opportunity to do so.
Dan:
That’s right and what that does is it creates an emotional connection between the user and the brand that other competitors don’t have. The thing is it doesn’t have to be a 3D walkthrough for it to be effective. It doesn’t have to be that involved. Even just an interactive infographic; I think there is a study that has shown that it is about twenty times more effective than just a static infographic.
I may even have that stat wrong, I think it is even much higher than that. That concept works extremely well, the more you can engage somebody; and I do think length of time of engagement is important. I realize that the most important stat at the end is conversions but I think length of time is actually the express way to get there.
If you can get somebody to spend seven minutes on this landing page experiencing whatever it is; it is better than the typical web average which I believe is 33 seconds.
Trent:
In what kind of technologies are you guys building these games in?
Dan:
It is basically all just HTML5 with lots of JavaScript. All these tools that we used to have to build in Flash, God forbid we don’t use Flash anymore. We now have the ability to build it all in HTML5 with lots of JavaScript.
And the real advantage of that is that all these experiences are very search friendly. So that Google sees everything and we can also track every single click. So we know what behaviors people are engaging in and behaviors they aren’t engaging in so we can modify the experience on the fly.
Trent:
And they are viewable on any kind of device.
Dan:
Any kind of device; that is exactly right, cross platform out of the gate. One other thing about these addictive experiences that I think is important and it goes to the emotional connection. If you give people the choice between doing work (whatever the work times are, nine to five, eight to six) or doing something entertaining, they are going to choose the fun thing every single time which is why people will drop even reading your blog posts to watch the next cat video.
We are not going to be making cat videos but how do we make something that is very entertaining for the audience but that serves the ultimate goal of driving conversions for our clients.
Trent:
I don’t know, if you made a hospital video and it was all starring cats but it conveyed the point it might work.
Dan:
Yeah I think there is a cat agency out there somewhere at least a fake one.
Trent:
So how long have you been creating the addictive experiences for your clients?
Dan:
We have been doing it for about fifteen years. In the old days it was all based in Flash and it was really ineffective when it came to inbound marketing because Flash is blind. It doesn’t really work well so we have been really rapidly blazing a trail using the HTML5 tools that we have to make this work in the last few years.
It’s been extremely well received and it is not for every situation but it works extremely well for clients with very complicated business problems that they need to solve or for something that is abstract and they want to make it less abstract.
Trent:
And that makes perfect sense to me. So the question that I wanted to ask, when you deliver these, do you find that they do a remarkable job of having that client refer you more clients because they’re so jazzed about this thing that they are showing it to everybody?
Dan:
Yeah, it is funny that you say that. They are high powered marketing vehicles for us in and of themselves. And one of the things that we’ve seen is not only do we get referrals from clients but it gets shared a lot by the industry and people who are talented in the industry being interested in what we are doing. So it has been good building our brand from both ends; the client side and also from the talent side.
Trent:
And have you been invited to speak at any industry conferences to talk about this stuff as a result of using these without proactively marketing yourself to get those speaking opportunities?
Dan:
Yeah as a matter of fact I am. That has only been happening recently. It has taken a while for us to really get these to a point where they are more in the public domain but it just happened the second time a couple of weeks ago. We won an award and in this area it was a very big reward called the MITX Award for that piece I was referring to for SAP and as a result I was offered several speaking engagements.
So I am kind of in the process of getting them ready now and see what makes sense.
Trent:
Terrific, alright, we are at the 40 minute mark and…
Dan:
Really?
Trent:
Yeah, so what haven’t we talked about that you think would be relevant to what we have been talking about so far or even if there is something that has been a remarkable experience for you that you think would make this interview richer for the audience? Yes there anything that comes to mind before we wrap up?
Dan:
The only thing that comes to mind us our AX vision for the healthcare industry; it is pretty interesting and it is very different but it does cross over very nicely into the healthcare industry and I can give you maybe one quick example of what I mean that we are pretty excited about.
Trent:
Yeah please go ahead.
Dan:
Have you ever been to your annual physical and after the physical you get this lab report that is either printed out or you look at it in your email and it is unintelligible?
Trent:
Literally last week, that happened to me last week.
Dan:
Yeah so you have all these numbers, right? And these acronyms and it says like normal or out of range and there is no explanation for really what it is, what it means, what you should do about it. “Should I worry about it, who do I call?” Imagine that lab report in a very highly interactive, engaging visual format that allows the user to kind of dive into it in a very simple way.
And if something is out of range I can see how far out of range and if I want to learn more about why it is out of range or what I need to do to bring it into the normal range I can dive into that and learn more from imbedded pieces of content there.
And if we want to take you deeper than we can link you to content within our site and if you’re really concerned about something then can take it the next mile and actually have you make an appointment right through the app.
There is an example that serves both the purposes of making the patient centered experience work for the hospital but it also works very nicely from our business model in terms of helping deliver that kind of dopamine rush for the patient. They really feel like they’re taken care of with apps like this. So we are building things like that that have a really exciting experience.
That is sort of one pillar of our overall concept for AX health.
Trent:
Is there anything we can link to on that?
Dan:
No not yet. We are actually going to be unveiling that in November. My colleague Shaw Gross is going to be speaking at a healthcare conference and we are going to be showing all the, what we consider to be the next generation, technologies that we are developing in the healthcare space and that is going to be one of them. So we will keep you posted on that one.
Trent:
A question that I want to ask before we wrap up, how did you get traction with healthcare to begin with?
Dan:
Well it is funny because you mentioned speaking engagements. I was doing a speaking engagement and I have done them a lot for some of the local universities. And in this case I was speaking at an MBA program for a marketing class and at the end of the class I always had students come up to me and ask me questions and exchange cards, a lot of them actually had jobs.
One of the people that was there was a guy who ran a program at Massachusetts General Hospital and he asked me if I’d be interested in helping him do a marketing project and so we came in later that week and that ended up getting us a huge amount of business with Mass General Hospital who is considered to be a very prestigious hospital.
And that has led to pretty much all our healthcare work.
Trent:
Fantastic, one speech and then many, many dollars of revenue as a result; did you ever figure out what that was worth for the hour?
Dan:
No, I actually probably should. It was great, from those speaking engagements I think I got at this point seven new clients from just those speaking engagements alone.
Trent:
So what did you do, did you call up the university and you talked to the person who runs the MBA program and you said, “Hey I want to come give a talk?”
Dan:
That might work but that is not how I got it. The way I got it was, the first one was…
Trent:
Alright, technical gremlin showed up there, I think Dan what I asked you was how did you get the opportunity to speak to the MBA class?
Dan:
One of my clients was actually getting her MBA at Babson. So there was this great professor who I really like and I’m going to introduce you guys. You might make a good speaker for the class, I know I would love to hear from someone like you.
So that is what happened and the professor had me in and then from there, the word kind of spread to not only other professors but other schools. And I am kind of on a little bit of a circuit right now in the Boston area doing speaking engagements for mostly MBA classes.
Trent:
Wow, terrific.
Dan:
I actually just did one at an engineering school about a month ago that was really interesting and yielded some potential results, talking to some possible clients there too.
Trent:
And what was the talk about specifically?
Dan:
It was really the same subject. This is an engineering school that actually teaches business which is a little bit different and the business professor, this is kind of the entrepreneurial class wanted to have somebody come in and talk about marketing so I had a very similar conversation with him that I did with you about our B2Me process and our Addictive Experience.
Trent:
Interesting, I’ll have to go ahead and contact my local university here.
Dan:
I would recommend, it is a great way to get new business for anybody in this business.
Trent:
Especially in the MBA because it is generally filled with people who are employed in the work force.
Dan:
Yeah they are and sometimes what is funny is that the MBA students work for other agencies. I love it when that happens because you always have some very spirited conversations when someone is in the agency business.
Trent:
You absolutely would. Alright Dan, we are going to wrap it up here. I want to thank you very much for coming on the show, it’s been a pleasure to have you here. I have taken pages of notes as I always do. It’s tough to do these interviews, keep your mind on track and write notes like mad. But somehow I seem to get it done so it’s been a pleasure.
For folks that want to get a hold of you, what is the easiest way for them to do that?
Dan:
You can email me at dan@whiterhino.com or follow me on Twitter, @dgreenwald or LinkedIn with me.
Trent:
That’s it, thanks so much.
Dan:
Thank you very much Trent. I appreciate you having me on.
Trent:
You are very welcome, take care.
Dan:
Take care.
Trent:
Alright to get to the show notes for this episode go to BrightIdeas.co/148 and if you enjoyed this episode please do me a favor and help spread the word by going to BrightIdeas.co/love where there is a pre populated tweet awaiting the click of your mouse.
So that is it for this episode, I am your host Trent Dyrsmid. Thank you so very much for tuning in and being a listener. If you have questions for myself or for the guest make sure that you use the comments forum right down at the bottom of the post. And we’ll so you again in another episode soon, take care. Bye-bye.
About Dan Greenwald
Dan Greenwald is founder, President and Creative Director of White Rhino, since 1990.
Dan has won of numerous industry awards for interactive, advertising, branding, direct marketing and design work.
His client experience is broad-ranging and includes B2B and B2C clients, from complex technology companies to high-end consumer products branding.
https://brightideas.co/wp-content/uploads/2014/08/dan-1.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-08-19 09:00:572020-09-16 06:14:58How to Identify the Emotional Drivers That Cause People to Buy with Dan Greenwald
Paige Campbell is the CEO of Grady Britton, a mid-sized advertising and marketing agency in Portland, OR. Grady Britton has been in business for over 40 years.
Paige started as an employee and, along with her business partner, ended up buying the firm from the prior owner. Subsequently, Paige and her partner went on to buy two more agencies.
Whether you are buying or selling a business, or hoping to in the future, you are going to find great insights when you listen to this interview.
Listen now and you’ll hear Paige and I talk about:
(01:10) Introduction
(06:35) How did you make the transition from employee to owner?
(09:30) Why didn’t you want to become an owner originally?
(16:30) Please tell me about the next agency you bought.
(21:00) What advise would you give potential agency sellers about starting to market their firm?
(24:00) What terms are reasonable to expect as a seller?
(29:00) What did the due diligence look like?
(34:00) What advice would you give to the seller when surprises come up in due diligence?
(37:00) How involved was your attorney in the process?
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters, welcome back to episode number 147 of the Bright Ideas podcast. I am your host, Trent Dyrsmid, and this is the podcast where we help entrepreneurs to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their business.
If you are an entrepreneur and you’re looking for proven tactics and strategies to help you increase traffic, increase conversions and ultimately your profits; well my friends you are in the right place.
And the way that we do that is we bring on experts and we get them to share with us exactly what they did to become successful. No theories, no puffery just, “Hey here’s what I accomplished and here’s how I did it step by step by step.
This episode of course is absolutely no different.
However in this episode my guest is a woman by the name of Paige Campbell. And she is the CEO of a marketing agency by the name of Grady Britton.
We did this interview because Paige first of all was an employee of Grady Britton and along with her business partner ended up buying the firm from the prior owners because it is a very old firm; it’s been around for about 40 years.
And then subsequent to that, they went on to buy two more agencies.
The focus of this interview is whether you are looking to get bought or whether to buy, you are going to find great insights when you listen to the conversation that Paige and I have. We talk about how to get that conversation with potential buyers started as a seller in a way that does not show weakness, because that would obviously negatively impact your negotiation position.
We talk about what the buyer looks for in the due diligence process. We talked about what are the realistic expectations of the seller in terms of exit and the terms of the deal; how it is going to be structured. If you haven’t sold before, it is not all about price, the terms of payment are often times more important than the price.
For example, I’ll give you a billion dollars for your firm but I am going to be you one dollar per year over a billion years. That wouldn’t be a very good deal even though the price sounded really high.
So this is really going to be a very interesting interview for you if you are thinking of selling or if you are thinking of buying. But before we get to it just a quick announcement; I get a lot of e-mails from people asking me, “What are all the tools that you use to run your business?”
I have a list of those tools that you can get to at GrabTrentsBonus.com and as that URL name would suggest to you, when you use one of the affiliate links on that page, and I get a little commission from whoever’s software that you are buying, I give you the opportunity to choose from one of my paid products and I am going to give it to you for free as a bonus as a thank you for using my affiliate link.
So with that said please join me in welcoming Paige to the show. Oh and I should say that in this episode we had two technical glitches that I have never had in a hundred and ninety some interviews; two technical glitches so apologies in advance for the conversation being interrupted not once but twice due to these technical glitches.
Hi Paige welcome to the show.
Paige:
Thanks Trent
Trent:
It is a pleasure to have you on. We are going to talk about all sorts of interesting things here today with respect to the acquisition of other agencies, and my hope is that the folks listening to this, whether they’re looking to buy an agency or whether they are looking to sell their agency are going to learn all sorts of interesting things from the buyers perspective and that’s being you because you have bought two agencies.
But before we get into any of that, I would like to give an opportunity to introduce yourself to my audience, so that they know who they are listening to and give them some context for all the great stuff that we are about to hear.
So please tell us who you are and what you do.
Paige:
My name is Paige Campbell and I am the president of an advertising and marketing agency in Portland Oregon. The agency’s name is Grady Britton, and we have agencies that have been in business for the last forty years actually it is our forty year anniversary this year and has transitioned over the decades to be a brand focused agency. We do a lot of content development, social work, as well as digital campaigns for clients in the Pacific North West mostly with a national presents.
Trent:
Ok, so either you weren’t the founder or you are the youngest sounding seventy five year old I have ever heard of.
Paige:
Yeah it is true, not the founder, I am neither Grady nor Britton both of those names have since retired. I began purchasing the agency from the original founder who was Frank Grady about five or six years ago now and then became the president three years ago. I have a business partner Andy Askren who is our Chief Creative Officer and also owns sixty percent of the company with myself.
Trent:
Okay so let’s delve into a couple of details. Just roughly, what size is your company? How many people work there?
Paige:
The agency has 21 people, so midsized in the Portland market.
Trent:
And what size customer do you guys deal with?
Paige:
A huge range; on the larger side we work with a couple of customers. One being a large ship manufacturer that will remain to be unspoken, and the Portland *inaudible* on the B2B side is probably our largest account.
On the consumer national side we work with, clients I would say fifty to two hundred million dollars, it really depends on the industry. We do a lot of travel destinations marketing, food and beverage, and industrial B2B work.
Trent:
There is going to be some people listening to this who maybe work for an agency and would like to own one one day and I know that in our pre-interview I discovered that at one point you didn’t want to become an owner but eventually did.
So do you want to tell us a little bit about how you went from being an employee of this agency to being an owner? Let’s spend a little time on that and then I want to spend more time, probably the bulk of our time on how you have purchased two other agencies because there are quite a number of details that I want to get into in that part of the conversation.
Paige:
Okay sure, I had worked in the agency business prior to working at *inaudible*, four other agencies and worked my way up in the business from receptionist as my first job at an agency and was director of client services at Grady Britton.
At the time my predecessor Frank Grady, he was doing succession planning and he had a couple of options to be purchased himself or grow the agency to a certain size that would be more attractive to an outside party or to sell the agency to a team within or an individual within.
When he first asked myself and two other people here if they were interested in joining together and purchasing the agency my business partners said yes very enthusiastically but this has always been something that they wanted to do. Whereas I at the exact same moment said no I would ever be interested in doing this.
I think at the time it seemed a little bit overwhelming to me and I did not know the first thing about running an agency, and I had just never envisioned that for myself and so I was real quick to say no.
Thankfully I had two people, my partner now and also my predecessor who were very patient with me and gave me a lot of time to explore the notion and we had an ongoing conversation and I did some work myself, personal work to figure out if this was what I wanted.
I tried to make and educated and smart decision and eventually I came to the conclusion that I was committed to this industry, and I was not going anywhere, and eventually I would probably tire of being a director of client services and I’d be looking for something more challenging. So I came to the conclusion that the next step for me would be ownership and why not? Here I have this opportunity and it’s remarkable and there is a reason that that exists and I should probably go for it.
Trent:
So did you initially say no because you thought it would be too risky to become an owner?
Paige:
Yes, absolutely
Trent:
Let’s hang out on that one for a second because I think that is something that people would like to hear. Why did you think it was risky and as you made the transition and changed your mind and of course became an owner, did those fears end up being real or were they just fear?
Paige:
Yeah there is a little bit of all of that and what actually happened; I am definitely a conservative person by nature especially financially. For me it was incredibly risky. I am also a single mom and so most of my livelihood is in the equity of my home for example and I was in the case of putting a down payment down on the agency and such great payments and so on and I was going to become personally liable.
This is also in 2007 pre recession but as we moved forward and actually deal became more realistic and it was going to happen and I was coming to terms with that and also speaking with the PR-director who is now my partner and we were determining if we would be good business partners. There were a lot of things going on at the same time.
But the financial risk was paramount for me and I think what ended up happening in my mind was I played the game of it was like a mortgage and if I can get over the fact of the large amount then I felt I’m going to be strapped to for four years; treating it like a mortgage, every time I make a payment I am putting equity into something; then it did not seem as large and terrifying.
What happened as a result was we signed a deal and about six to seven months later the economy fell out and the agency really went through a tough time with layoffs and I had everything at stake in the business and so there was no choice. When you are in that situation there is literally no choice and you just work like you have never worked before and you dig in and do everything that you can.
And so my partner and I were both in that situation and had a lot to lose and the mental strength of not allowing that to happen. So, here we are today and the agency is thriving and we are hiring two more people this month, we will be at 23 now and we could dig our way out and made sure that we found a way to be successful.
But yeah I think that the difficulty was certainly in the fear of the financial risk and the livelihood of my family.
Trent:
So when the economy went into the tank the terms of the deal had already been negotiated and did not get re-negotiated?
Paige:
Yes. When the economy went tank the deal had been signed and immediately eight months after the deal had been signed, the agency was not worth what we had signed for. We worked under that premise and the continued payments for probably two to three more years. At that time the economy was still not in recovery mode and we slightly changed the terms of the deal; resigned on that lowering our interest rate. So now the terms have been slightly modified to our benefit.
Trent:
There is something that you spoke there that I am going to go back to because I went through it personally as well and I really want people to have a take away and you did what I call embracing economic pressure; in other words you buried yourself deeply in debt and with my last company I did the same thing.
I remember there was a point when I was hundreds of thousands of dollars in debt and the company wasn’t profitable yet but it was awfully close and at that point you just can’t give up because it is your economic ruin if you do and the magical thing that happened to you and it happened to me is you dig deep in and you go to personal resources that you didn’t know you had and you get it done and in your case it worked out very well and in my case it worked out very well.
So I bring that up only because I know one of the things that people that have smaller agencies or maybe they’re even independent marketing consultants really struggle with is how do I get from being this team of one to a team of a few and it might not be the right decision for everybody and I don’t dispel financial advice on my show.
But I would just say listen to what Paige just said and what I just said about embracing debt as a form of forcing commitment on yourself and maybe that debt is used to hire some additional people to help you become more productive and get more done and stop doing everything yourself. So don’t necessarily be afraid of it.
Paige:
Yes that is true and I think that I actually in the moment I honestly didn’t think of it like that I just had no choice.
Trent:
Me too.
Paige:
I had nothing else that was an option except digging down and figuring out how to survive out of this and I like the way that you framed it. And I did learn a ton about myself; I would not wish it upon anyone but I also wouldn’t have ever given up that experience. I know what it means to run lean now, I know how to do it and I know what indicators to watch in my business. There is really no better education.
Trent:
Yes you could not have bought that one at a college. Not for any amount of money. The great thing with this is that you get your tuition back, it’s called future earnings.
Paige:
Yeah.
Trent:
Okay. So now people have a little bit of an idea of how you came to be an owner of an agency, and obviously it wasn’t a horrific experience, because you have gone out and bought two more.
Paige:
Yes, as a matter of fact the acquisition was part of the strategy to get out of that place that we were. The business was changing a lot, the market was really unstable. The typical business for us would have been AOR relationships, long term contracts and such.
Those relationships worked but their budgets had moved by project basis and their internal change were being let go so I did not have projections anymore. I used to be able to look out and see at least for the quarter what I expected and to some degree for the year.
Not really having that any more, there had to be another way to stabilize the agency, and an opportunity presented itself to acquire an agency that was not fairing very well through the recession. We were not in a position of strength but we were a little bit more secure than they were.
Thankfully we have a very good reputation in town and the owners of that agency reached out to us as well as a couple of other agencies and opened up a conversation to ask if anyone was interested or able to acquire at that time. And we were interested.
The agency that offered the conversation had a nice make up of roster and talent that were very complementary to what we were doing. That was a very key thing that I know now and I should have applied that to my second acquisition that I did not. But I should have.
What was great about it was the first acquisition really complimented the services that we already had but was not duplication. At the same time they were unable to have all full internal creative teams and all full internal visual teams and they were struggling to bring a great creative product to their clients and their clients were taking note of that; whereas we had a lot of capacity for creative and digital teams in-house.
There were just a lot of places where, the puzzle pieces sit naturally together on a logistics and tactical way. On the other side of it, having a deep look at culture and what was going on at that agency and what the talent was there and to basket it with our agency. The stars really aligned nicely.
It was risky; financially we were in the thick of a recession and were looking for a way to stabilize the agency but there’s certainly acquisition cash going out the other way so, you have to figure out financially; you are buying the future there is no assets.
Trent:
Let me just interrupt you for a moment. We are going to come to the financial aspect of it in a minute but there are some other details I want to dig into from both the buyer and sellers perspective, and you now have the ability to give insight into both.
So from the buyers perspective the primary reason that you wanted to acquire this agency after they approached you was because you saw some talent and capabilities that would build in very nicely with your team and your bench would get stronger as a result. Is that more or less summed up?
Paige:
That is half the equation and the other half would be that I saw a client base that had long term capabilities to stabilize the agency financially.
Trent:
Yes absolutely, nobody is buying just expenses they are buying for revenue as well. Now having received the phone call from an agency that was struggling a little bit, what advice would you give to other people who are thinking that they might be struggling and may want to sell their agency but do not want to come across too weak or too vulnerable when they make the call or calls to potential suitors?
So what advice would you give to that person who is trying to market their company to start conversations the right way with a firm or firms that might be interested in buying them?
Paige:
Sure, I think something that is really important is start small, start with a couple of people in the industry or other peers in your city that you are friends with, that you have a relationship with, that you have competed against in respect or a couple of people that you have known in the business for a while that you can explore it with.
I think you should always come to the table with: “You know, we’re exploring a lot of options,” whether you are just tired and want out of the business, retiring or whatever the situation is, it is like “I am exploring a couple of different options in succession planning or moving this agency to the next level; one of them is acquisition, or selling and I wanted to reach out to you because I have always respected you.”
And you can approach it that way. Keep a lot of options on the table, and be open about that, so that it is an exploratory conversation and keep it that way. Then you are doing a bit of research into what is going to make the most sense for your agency, and keep your agency at the forefront of what is best for the people there or best for yourself and looking for a future match.
You are selling something that the benefit will come to you in the future too. So be really careful who you start engaging with in conversation.
Trent:
Now for the two agencies that you have purchased, and forgive me if I am getting my facts astray but if I recall our pre-interview correctly, the two agencies does not include the agency that you became a principal of. You’ve bought two more since then?
Paige:
Right
Trent:
Okay. So the second one did they approach you as well or did you approach them?
Paige:
On the second one, they did approach us but they had heard out in the market that we might be looking. So that owner had heard that via a little bit of word of mouth. It was true that we were looking so he then approached us.
Trent:
Okay and roughly what size were these companies in terms of number of people or revenue whatever you want to disclose.
Paige:
The first agency was around ten to eleven people in house at the time we acquired them. The second agency was about the same, ten to twelve.
Trent:
Okay so these are probably between a million and a million and a half dollars a year in revenue?
Paige:
Yes, I believe the first one was a little bit larger than that, I’d say two and a half million. The second one was about that size yes.
Trent:
So, when you have a company of that size to sell do you think that it is reasonable for the seller to expect to receive a cash payment and walk away? And if not what is the more likely outcome for them?
Paige:
No I do not think it is reasonable to expect that. The buying agency and you as the seller, you are selling the future possibility there and the buyer is buying the future possibility. There is a lot of things that have to work to move those accounts and that talent to actually being profitable and becoming what the buyer is looking for and in our case stabilizing our agency to another degree. So, knowing that situation and the first one, we were not interested in putting a big cash payment out.
I think the seller knew that this was going to be a buy out over a term over a certain period of time, based on the profitability or based on the revenue generated by the clients that they were selling. So, if you are selling you should remember that there is no hard assets that anyone is benefiting from that you actually should look for and sometimes sellers stay part of the acquisition for six months or something to transition the business.
So definitely if that is going to happen that needs to be considered. The competition, negotiations and all sorts of stuff.
Trent:
Did that happen in either of the two purchases or did you say, “We will pay you out over time but you don’t go to work here anymore?”
Paige:
In both situations we did say that. We will buy you out over time but we want to transition the business ourselves.
In both situations we brought over the key staff that really owned the relationships. This is unique now that I think about it, but in both cases the previous owner was not interested in coming over and transitioning the business.
Trent:
These two agencies; were they mostly project revenue models or did they have high levels of retainer income?
Paige:
The first one was more ongoing relationship. That is relationships with their clients which is what we were mostly interested in. I don’t think if they were being project to project based we probably would not have done it. We were looking for ongoing business and that is what was attractive to us.
The second acquisition was a visual agency. They were running more on a project by project basis and we were interested in that agency for other reasons.
Trent:
Like?
Paige:
They had some digital capability in house that we didn’t and we were looking at building it out and have a much more robust digital arm base. They had some developing talent and capability in there that we were attracted to.
They also which was kind of unique, they did have one large ongoing digital account that they were running a substantial amount of business with every month.
In our digital arm of our agency we had been running largely project to project. And I wanted a big stabilizing account that fed into that arm within our structure instead of running project to project. I was attracted by the big piece of business and then the additional capability that it would bring to our whole department.
Trent:
In either case of these two acquisitions before you make an agreement with the seller you know who their clients are, but you are not able to go and talk to the clients. So you have to take them at their word that the client relationship is intact and the terms of your agreement obviously are going to support that fact, in other words if a client goes away you are not going to pay as much.
What was it like once you made a deal and you started to tell the clients; I am assuming you would have acquired the key account managers that own those relationships and those people would have said to the folks at the clients that the company had been bought etc. Is that kind of how it went?
Paige:
The first part yes, of course you can’t go and speak to the clients before but you do need to do some due diligence there so what we did was of course a meeting with the owner and presidents of the agencies and we got real serious to do the due diligence around this.
We did a lot of talking about the client relationships, about the culture of the clients, about how well they thought they would transition, about the key personnel and staff, what the client was used to, what they thought they were looking for in the future, and where they had been underserved perhaps and all of that internal work and then we interviewed each of the staff members that were in relationship with or held the relationship with those clients to see if we heard re-occurring themes and information.
And in the case of the first acquisition we did we trusted the information a lot, we trusted those account managers a lot. You could tell talking to them that they really had great relationships with these clients and we felt if we could secure them and make them feel like this was going to be a great net outcome for them to actually have their agency be acquired and come into our culture and our environment, this could be successful.
They really had great solid relationships. From hearing that information their clients were looking for things that we really could provide and this account service staff were excited at being part of an agency that could really bring a holistic viewpoint to their clients. So everything lined up.
On the second one it was a little more precarious…
Trent:
Sorry, we are having a bit of a bandwidth issue here. I am not quite sure what the problem is but are you able to hear me okay?
Paige:
We spoke with the owner at length again which was a similar process and gathered a bunch of information about the clients and where they were with them and then when we interviewed some of the team that worked there we heard different perspectives.
So, this really put things into question for us because we felt that the account managers were the people in the day to day and they would have better indicators of what could be possible, and we felt that the owner was a little bit out of touch with the day to day work.
And so it was really important at that point to make a decision to bring all of the account team over. Also the agency was different, running project to project they had more of a sales approach vs. an ongoing relationship management approach.
Doing a lot of websites while in digital work it was project based they would work with the client from four to six months and then move onto the next project. So, there was not as much looking out to the future, it was more of can these people continue to sell digital work across the board.
And we were just going to transition the current projects in the queue complete them under contract, maintain the large piece of business which is what we were really attracted to in the first place and then continue to sell digital work across the agency.
Trent:
Okay, so they had one key client that was very desirable for you?
Paige:
Yes it was just a large size of ongoing month to month digital work, and that was attractive to us because our digital team had also been running project to project and always selling that pipeline and I was attracted to that idea of having a nice big stable piece of business on a month to month retainer structure to support the time between the next big project coming in.
Trent:
So what advice, when you go from letter of intent, which is like the first date of mergers and acquisitions where you say this is what I want, I’m interested, here’s the terms etc and then you go into due diligence and you uncover things that undermine your confidence or you start to realize that the person that you were about to go on the date with is a little different than you thought they were.
What advice would you give to buyers or sellers for handling the negotiation that is going to be required to alter the terms to now match the new reality? And let’s say you are the buyer, which you were so let’s give advice to sellers. So what would you say to people who were in that situation where you as the buyer now don’t want to pay as much as you said you would pay in the letter of intent because of the situation you have uncovered is different than what they told you?
Paige:
I would definitely look at it from the perspective of whatever changed in respect to the future of the business. There is always a scale, from one perspective, from the buyer’s perspective. “Yes it is greatly going to effect the future of the business.”
From the sellers you have the background of knowing your clients and knowing your team and really how solid and what situations those are in. And you can make an educated re-negotiation around that.
You have the benefit of having all that knowledge and experience that the buyer doesn’t have. So they are going to not want to take as big a risk of course, and I think that you have a lot of means to assure them if you actually think that it is not posing as big a risk or threat to the future of the business as the buyer might think.
In the case of the second acquisition that exact thing happened. There was a key talent that we were hoping to have join us with the acquisition; things were all wind-up at the last minute that creative director took another opportunity in the market and left. It was not a risk that none of the clients that the agency was servicing at the time would have jumped ship with this person; that was not what the concern was.
But that person was part of the talent that we were hoping to acquire in the transition. So the value of the company actually shifted.
Trent:
Was it by a meaningful amount?
Paige:
I think from the perspective of the seller yes. You bet. But the seller also agreed that we as an agency had done everything that we could to bring this person over and I think that they knew that and actually agreed with that and so I was not willing any longer to… that affected how I looked at the future quite substantially.
Trent:
So now let’s assume for the purposes of our discussion that you’re getting towards the end of due diligence and the buyer and seller are pretty much in principal agreed on everything. Somebody has to paper this deal up so that you can actually get it done. Is that where you brought the attorney’s in?
Paige:
Yes actually our attorney was involved from the get go from the point of the letter of intent and served as council because from that very beginning you are looking at things that you need to ask, information that you need, when are you reviewing the financial information. That needs to come up pretty early in the game and my attorney was partnered with me through all of that work.
Because you start to frame your negotiations just as that data and information comes in. You are talking about where you see risks, what makes you uncomfortable, “if we could pencil out a deal that was somewhere in this range I’d feel comfortable.” You are funnelling down to knowing that that deal is going to get the end result so I would not hesitate to get an attorney involved early on.
As you run along these things, you can get deal heat because you start looking out at the possibility of this and the possibility of that and this talent and that and you can quickly get your eye off the ball and forget what your objective was and doing the same from the beginning and having that council say “slow down” “it’s not worth it to pay this amount” to continue to provide that council and that ground in effect is very helpful.
Trent:
How much did you have to spend on legal fees?
Paige:
Let’s see. I can’t remember on the first one. My predecessor Frank Grady was still here and we were doing that deal together and I was already an owner but he worked that side of it. On the second one I probably spent fifteen thousand.
Trent:
Okay. So really fifteen thousand of insurance to make sure, roughly how much was that deal worth?
Paige:
I am not going to disclose the total. In the whole scheme of things it was very minor compared to the future benefit that we gained from that acquisition. I would easily do it again.
Trent:
So well worth it.
Paige:
The deal was definitely negotiated I feel… ((computer crash))
Trent:
For folks that want to either buy or sell are there any books or are there any websites that you would suggest and also if they wanted to get in touch with you what is a good way for them to do that?
Paige:
They can get in touch with me via my website: GradyBritton.com. On the contacts page they can reach out to me via e-mail which is probably the best bet.
Trent:
Can you just spell that for us?
Paige:
Sure. GradyBritton.com and in regards to blogs or websites or books, you know I didn’t really rely on any of those as resources through this process I had a couple of good business peers that I relied on and I mentioned I had an attorney that counselled me and kept me grounded and just other people in the business that had done it before.
I belong to a unique group of other agency presidents so I relied on them to ask for the tactical situational stuff. “Have you ever agreed to deal that comprised to something like this,” things like that.
Trent:
And it was very much the same for me. I have not bought firms, but I have sold so folks if you have questions from the seller’s perspective put it in the comments and I will be sure to answer them. I echo Paige’s comments, your legal council has been through this many times before, if you have picked the right one.
There are all sorts of entrepreneur groups that, I was in several mastermind groups and Paige has eluded that she is a member of one as well and that can be incredibly valuable. The big thing is that you really want to make sure that you talk to people that have actually done it before. Because in the scope of three quarters of an hour podcast we can talk, there are people that do workshops on this type of stuff for days.
The number and complexity of the details involved in a merger or acquisition of any kind are very, very large. Don’t let it discourage you, just go into it being aware that it takes a while.
These things do not happen overnight.
Paige:
Yes, eyes wide open for sure and yes in both cases it probably took a total of a year to go through the process from the beginning to the end to actually move in and actually have people established and see the benefit of the work coming into the agency.
It is a long deal. The second one was equally as long and actually was a bit more tumultuous. Both times eyes wide open and eye on the ball. And understand that it is going to be a large part of what you do and focus on in the immediate future for sure.
Trent:
And with that said with advice to sellers; if you think there is any way that you can do succession planning and sell your firm to people that already work there; speaking from personal experience. You are going to get more money because those buyers know exactly what they are buying you can get that deal done a lot quicker.
There is not nearly the same level of due diligence that is required. In my case the deal was done inside of thirty days. And I would encourage you to start planting those seeds several years in advance if you’re selling.
Paige:
That is right, several years so people really understand what they are taking on and their interest, passion and commitment is there and has been tested and it is a whole different beast moving from employee to ownership and it behoves both of you to try it on a little bit as you go before the deal is done.
Trent:
Alright Paige I know we are up against your hard stop now and mine as well I got to get on the phone and do another pre-interview with another founder so thank you very much for being a part of the show it has been a pleasure to have you on and I really apologise to you and the audience that you were cut off mid sentence due to my computer crash which has never, ever happened before.
Paige:
Good luck to you, thank you Trent and good luck to everybody.
Trent:
Great take care, bye-bye
Paige:
Bye-bye
Trent:
To get to the show notes for this show go to brightideas.co/147 and if you enjoyed this episode, please do me a favour and help me spread the word by going to BrightIdeas.co/love where there is a pre-populated tweet and all you have to do is click your mouse. That is it for this episode, I am your host Trent Dyrsmid, thank you so much for tuning in it has been my pleasure as always and I will look forward to having you back for another episode. Take care bye-bye.
About Paige Campbell
Paige Campbell has over 20 years of marketing and brand development experience, which includes building communications strategies for national and regional clients such as Xerox Network Printers, Bob’s Red Milland First Independent Bank.
In her role as President, Paige oversees the strategic team providing guidance and strategy for various accounts. She believes that creative ideas can come from anywhere and she is driven to make sure that our clients are benefiting from the best business counsel and creative strategy possible. She leads the agency with an unparalleled commitment to her team, culture and clients.
https://brightideas.co/wp-content/uploads/2014/08/paige-1-1.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-08-11 06:00:592020-09-16 05:55:11Key Insights Into Buying or Selling a Marketing Agency with Paige Campbell
Zak Dabbas is the Founder and CEO of a very successful mobile agency called PunchKick Interactive. Currently ranked 959 on the Inc. 5000 list, they are on track this year to earn $8M.
PunchKick currently has 70 employees, is very profitable, and has most amazing and transparent culture you have ever heard of.
In this interview, you will learn how PunchKick Interactive got started and how they chose their niche. Are you looking for ideas on how to build a multi-million dollar company? Get your pen and paper ready to take pages of notes to capture the brilliant ideas shared in this interview.
Listen now and you’ll hear Zak and I talk about:
(04:00) Introductions
(05:00) How did you get started?
(08:00) What did it mean for you to focus on mobile?
(10:20) How did you target your customers?
(16:00) How did you attract the talent to your team?
(17:30) What is whisper talent?
(21:40) What advice would you give to younger agencies?
(26:00) How has transparency really helped your business?
(31:30) What is the PunchKick Growth team?
(34:00) How do you attract talent?
(39:00) Tell me about your decision to hire salespeople?
(44:00) How does your team do outreach?
(47:00) What does sales team compensation look like?
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters. Welcome back to episode 146 of the Bright Ideas Podcast, I am your host Trent Dyrsmid and this is the podcast where we help entrepreneurs to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their business.
If you are an entrepreneur and you are looking for proven tactics and strategies that you can implement in your business today this is the podcast to listen to. So how do we do that? How do I make good on that promise?
Well the way that I do that is I bring on other proven experts; other entrepreneurs to share the story of how they have built their organisations and in this episode you are in for a treat. My guest is a fellow by the name of Zak Dabbas who is the founder of a very very successful mobile agency called Punch Kick Interactive. They are on track this year to do eight million dollars, last year they did four million, the year before they did two million.
They are ranked number 959 on the Inc 5000 list. They’ve got 70 employees. They are very profitable and they’ve got the most amazing transparent culture that you have ever heard of. In this interview we are going to talk about how they built it, how they got started. And I am going to give you a hint; it was from sitting in his classroom in law school and realised that he did not want to be a lawyer.
And he started sending out emails. But they did something that was really smart. They picked a focus very early on, almost from day one; and made it their mission to become the leading organisation with that particular focus.
And we talked a lot about that in the interview and we talked a lot about how that affected the type of companies that they would go after, the things that they would communicate to them, how they initiated conversations and how they turned those conversations into those people becoming clients.
There is so much incredibly good stuff in this interview that I encourage you to make sure that you are sitting still when you are listening to it with a pen and paper in hand; so that you can like I did, take pages of notes as Zak pours out brilliant idea after brilliant idea and yet he is the humblest guy on the planet and was an absolute pleasure to listen to.
So with all that said we are going to welcome Zak to the show in just a minute but before we do that, very quickly, I get a lot of people sending me emails asking what tools and resources I use to run Bright Ideas and my other businesses.
You can see a list of all them at GrabTrentsBonus.com, some of them are affiliate links if you want to the affiliate link to buy those products that would be wonderful and I appreciate that very much. If you do I have some bonuses for you. That is why it is called Grab Trent’s Bonus. There are instructions there and you can send me the receipt.
Take your pick of some of my paid products that I would like to give you for free after using the affiliate link; pretty cool huh?
Okay, with that said, grab your pencil, grab your paper, sit down and please join me in welcoming Zak to the show.
Hey Zak welcome to the show.
Zak:
Thank you so much for having me.
Trent:
Yeah no problem, it is my thrill to have you here and we are going to be talking about all sorts of amazing stuff here today to do with the incredible growth of your agency, Punchkick Interactive, which I won’t spoil, we’ll get to what you have accomplished here in the last couple of years in just a moment.
But before we get into the results and all the steps that you and your team have taken to achieve those pretty incredible results, let’s have you, as I always do, introduce yourself. Who are you and what do you do?
Zak:
Okay great, I am Zak Dabbas, I am the co-founder and CEO of Punchkick. And so my role in the company is really making sure that systems and processes are optimised; that everybody is really happy; that we are growing in the right direction and really keeping a clear look on what is happiness is like in our company and how people are doing and how we are growing and just being involved in a little bit of everything.
Trent:
Alright, so we’ve got the head honcho on the line folks and he’s built himself a multimillion dollar company so if you are looking to do the same or you are looking for inspiration or you are looking for ideas, get your pen and paper because there is a bunch of them coming your way.
So first of all, I discovered you guys because you were on the Inc 5000. I think you told me in 2012 you did two million dollars in revenue, in 2013 you did four million dollars, here in 2014 you have already surpassed four million dollars, you think you are on track for somewhere between six and eight.
So that is pretty darn phenomenal, kudos to you for that. So folks now that you know you are listening to someone who has built something pretty incredible, let’s go back to the beginning. You told me that you started this back in 2006 while you were in law school. Is that correct?
Zak:
Yup, when I started the company I was in law school and previously I was a pre med student in college. I graduated and decided medicine was not for me and thought, okay I guess law school is the next best thing. And so
I went to law school and very quickly realised that I disliked it a lot. And so one of the biggest things in my life that I should have asked myself was what did I love to do and what I enjoyed doing.
And I look back and all the parts come together but at the time I was doing a lot of freelance work with my biggest partner today Ryan Unger who is our CFO. And I was doing a lot of work with him freelancing. We were designing and developing websites and I would handle the stake hold and client relationship side of things and finding new work.
And we were doing it on the side and I got to law school and I realised I made a really really big mistake. And so at about a year and a half in of the three year program I told Ryan, “Ryan if I have to be a lawyer I am just going to kill myself, this cannot be my destiny.”
We decided to make our claim. We started Punch Kick Interactive. We turned the freelance work into this legit business and titled it Punchkick Interactive. And by that time Ryan had gone and seen a conference, a *inaudible* conference and at that conference heard a bit about mobile here and there and came back and said, “you know what Zak, mobile is the next big thing, I think we should make that our focus.”
And so we did it. And I graduated but I spent the rest of my law school experience in class firing off new business email after new business email, trying to land the kind of clients that I really wanted to work with and
I thought would help grow our business. By the time we graduated he had landed a client (he was doing the same thing) and I had landed a client.
The rest is history but I quit my job at the law firm I was working at and it was wonderful.
Trent:
Alright, so let’s go back there, when you decided you were going to focus on mobile, what specifically did that mean? You were going to build mobile websites? Because you guys were like two freelancers, did any of you guys write any code? Because I know you build apps now but you probably did not back then I am guessing.
Zak:
My business partner is an unbelievably strong developer. And back then, this was on 06, there was no iPhone and so back then mobile was wallpapers, screen savers and basic mobile sites (that were called WAP sites back then and had very limited functionality) and also a lot of text message campaigns.
What we did was we looked at the mobile landscape and a lot of it did not exist. We saw some opportunities for businesses to reach their audience using mobile tactics. And so when we fired up in the beginning it was all spec work. It was projects that we designed and developed, just the two of us to showcase our skill set. And that was what we had to start.
Trent:
So what did you build?
Zak:
When we started to land work, the very first project that we ever did was actually with an agency that is still a client of ours and they were working with Intel. And Intel wanted a cool new way to reach students who were being invited to creative fares on college campuses.
And so we actually worked with this agency to create a text message campaign were you could basically get someone to opt in and then the day of the event they would get a message like, “Hey get out of bed you have an interview with Intel at eleven o’clock and here is some directions.”
Very simple stuff but back then that was very new, like this idea of customised content on your mobile device was very new and very difficult to sell. Back then I joked that we couldn’t give mobile away and most of what we did was on the education side.
And so some of the clients that we worked with at that time were just really early adopters, they really saw the potential there and so that was also part of why the company was fun; is that you would work with folks who saw that this was really new and exciting and they were willing to experiment with it.
Trent:
Yeah so not being able to give something away would definitely make it difficult to attract clients and drive revenue but none the less you told me that you did a couple of hundred thousand dollars in your first year and I think your first project was for Intel. Which I think you just mentioned a moment or two ago.
Where did you go from there? What was the early focus in terms of the product or service offering?
Zak:
What we realised very early on was that with something like mobile; it was really going to appeal to early adopters. And so we would shout to folks who we thought would be really open to adopting a new technology or a new way of engaging with their audience and so around that time another big client that we landed was Pearson education. Which I think is the second largest book publisher in the world. And back then they had a bunch of folks that we worked with who were responsible for creating e-learning tools.
At the time it was a stagnant industry and they wanted different ways to distinguish and separate themselves from the other book publishers and so with Pearson; around that time back in 2006 one of the first projects that we landed was actually one where you would purchase a book at a college campus and in addition to that book at no cost you would get this access to a flash card system.
And you could basically on your desktop view these digital flash cards and you could create custom decks of flash cards that had different items on them based on the chapter you where studying. And from there we created the desktop flash card system and it had a mobile component. And the mobile component was being able to take those flash cards that you created and actually import it to your mobile device.
And in 2006 this was very very new territory and actually the contact that we worked with at Pearson; at the time this launched it was tremendously successful for them and our contact was presenting it to the CEO of the company and I heard through the grapevine that she presented it to the CEO and she was promoted.
And that opened the floodgates with Pearson and so for a number of years we did a lot of really cool things with Pearson. So I guess for us what we found was that when we found the right clients; if we did really good work and we cared a lot about doing good work the rest worked itself out.
That is kind of how it happened for us.
Trent:
So would it be fair to say that through using direct outreach you managed to land a couple of key clients; you did incredibly good work for them and then marketing and sales kind of looked after themselves for a while as a result of these great client relationships?
Zak:
Absolutely, until recently I think I mentioned earlier it was November; we got our first official sales team together. Before that it really was word of mouth and reputation. And I think there is a lot to be said for that.
That people sometimes forget that clients just want to work with folks that make them happy and they enjoy working with. And I think for us part of what it was was I did not want to be a lawyer.
I did not want to do anything else. This was all I wanted to do and so I looked at every single client that we landed at the time as such a blessing (I guess is the only way to describe it). I was so happy that we had these relationships and I wanted us to do good work. Something else that I think maybe is worth mentioning is I am one of those people that like to think about what the future could look like and then I like to build a plan to get there.
And so even at the start of Punchkick, Ryan and I, we didn’t even have an office at the very beginning. And it was like this is what our dream office is going to look like and these are the clients that we are going to work with. And this is the kind of calibre of talent we are going to attract. We knew from day one the kind of company we were going to build and so we made decisions to get us there.
We had other project opportunities when we started Punchkick and we turned them away. So part of the growth for us on the sales side was being okay with saying this isn’t the kind of client that is going to get us in the direction we wanted to go and so we turned away projects that we didn’t think was a good fit for us.
We got a lot of interest from the adult space and we just did not want to do mobile work in the adult space. There were just a lot opportunities like that and we just stayed laser focused on the kind of clients we wanted and it served us really well.
Trent:
One of the things that I know is a struggle for a lot of young agencies is getting enough profit into the bank account to be able to fund the expansion of your team and hiring the right kind of talent that you need. So how did you guys go from just being these two guys to four, eight and ten people? And obviously you are much passed that now, you are at 65 now but I want to stick around the early phase for a bit.
Zak:
That was the toughest thing to deal with at the time and what I’ll say is this, if there is one thing I have learned throughout my career it is passion is equally if not more important than skill set. And what I mean by that is when you find people who are really passionate about what they do, they find a way.
There is that saying that where there is a will there is a way. It really is true. One of the things that I think we did really really well and that we still do really well today and it really makes Punchkick what Punchkick is; if you come to our office you’ll feel it; we know what a Punchkicker looks like, feels like, sounds like. It feels like a family. Even back then we couldn’t afford to grab somebody from a big five agency.
I could not poach somebody from a booming tech company but what I could do is find what we call whisper talent; which is this concept that a speaker that I saw in Argentina spoke about. He spoke about whisper talent where you find the guy who is living in his parents’ basement that has so much potential to being an unbelievable developer but maybe didn’t have a chance or maybe doesn’t have the credentials that someone else might have on paper.
We interviewed a lot of people and we found people who really believed in our vision and where we were trying to go and while they might not at the time have had years and years of experience I never doubted for one second that they would work hard and try to really provide a lot of value. Even when we were still very small we were bringing on all the talent we could and just finding exceptional talent.
And even today I have a strategist that has been here for three years and he is one of my dearest friends. When he started with us he was working in retail at Apple and I kid you not one of the things he said to me was, “I will sweep the floor at Punchkick; I just want a chance to work here.” And he actually came on in a like lead generation capacity and today he has rounded up some of the largest projects at Punchkick interactive.
So I think it is just in really smart hiring.
Trent:
Now did you hire all these folks as full timers at the beginning? Did you have the cash for that or did you have to just bring them on as sub contractors and use them only when you had work for them?
Zak:
It is funny that you ask that. When Punchkick first started we were working in Cleveland the first year and we were working out of my apartment and we had a number of contractors in Cleveland that we would turn to for overflow development and design and what not.
Then we moved to Chicago because we needed a bigger market. We still planned not having an office and keeping it,
I don’t want to say casual but not the big business we are today. And we ended up getting a small office for mailing purposes. It is funny how fate works, we had this small office and this office was the size of a tiny closet.
And it flooded and the land lord at the time told us: “I don’t want to repair this office; I am just going to give you a bigger unit one floor down.” And this office that we got had a really nice view; it was pretty big for us which is not saying much at the time. Ryan and I were like, “Maybe we should just buy some desks, maybe we should come to work once in a while here,” and so we started to.
And at the time we had freelancers working with us and we were like, “Hey come to the office too.” And really, I don’t want to say overnight but immediately we decided that we wanted to hire a team and so since our first office we have not used contractors. We don’t use them. Today every once in a while someone will come in for a few days to maybe pitch in on a project that is running tight but by large, even today with the 70 plus employees we have, they are all full time employees.
I found that the relationship that I could build with an employee, the long term feel of it is just invaluable for me. I never had that with a contractor. And I know some folks who run amazing businesses using contractors it just wasn’t for me. I really enjoy getting close and being friends and being in it together. So we got away from contractors as soon as we moved to Chicago and got an office going.
Trent:
Okay, so what advice would you give to someone that let’s say that they are not drowning in referrals yet? They are scrapping for every deal and they are really trying to get kind of over the hump and they have got to do outreach they got to reach out; they got to figure out, “these are the companies that I want to have as clients, they do not know that I exist,” what advice would you give to that person to get conversations started; which is the hardest part with the kind of clients that would allow them to charge the rates and do the work that is necessary to create the profits necessary to grow and invest in their business?
Zak:
Here is what my advice would be and I think it is going to sound a little hippy dippy but I am going to say it anyway; I don’t think that you can fake relationships and what I mean with that is if you don’t really want to work with a client that you are going after, there is someone else who does. And so I think the most important thing to do is to really ask yourself, “What kind of clients do I want, what kind of clients get me so excited, what kind of clients motivates me and inspires me to grow my business?”
Because if you think in those terms I think you would just naturally do things to get into those circles and so for us when we were starting small I wanted to be at conferences and events where the clients that we eventually landed were at because I was interested in their work. I really liked what they did in the digital space and I wanted to help them from a mobile perspective.
It was never about just revenue for me and so I think we being in touch with “What gets you excited, what just drives you?” Because then you are untouchable. You are going to want it more than anybody else and the client is going to feel it. You are going to make the kinds of decisions that make you an asset to those clients.
If you don’t feel that I think that maybe the client base isn’t right or the direction isn’t right. So for what it is worth that is what I will say, that passion, it is a clichéd word, but passion is just so important. Do you want to work with this client badly? If you do you will find a way, you’ll bump into them and you will be at events where they are at. You’ll follow them on social and congratulate them when they do something great or launch new projects.
It just happens, there is this idea that I had in my mind which is also maybe bizarre to talk about but I feel that I can make things happen. I believe that. I believe when I really want something that it just happens for me. And I know that that is because I make steps to make those things happen whether I notice it or not and so I think my advice would be to really ask yourself what drives you. What makes you really excited and go there, because you will meet people who are really excited to work with you as well.
Trent:
So is this the attitude you had when you were sitting in the law class, sending out about 60 to 80 emails at a shot?
Zak:
Absolutely because for me it was a matter of survival; I did not want to be a lawyer. I wanted to be in creative space. I wanted to be in digital. I looked at it that if I don’t make it with Punchkick then that is it, I am a lawyer. For the rest of my life I am going to work in a law firm. I am going to work in a culture that I don’t like, that doesn’t make me happy, it was survival for me, I wanted it so badly that I made it happen.
And I made it happen with a website and pretty much nothing else. It was a pretty lean start-up.
Trent:
I agree completely with what you just said and the pragmatic side of me also says, “Yeah.” But these people, these perspective clients don’t know who you are, don’t care who you are yet and they are super busy, got a gazillion other people also trying to get a piece of their business. And there has to be some way that you are able to break through all of that noise and actually get their attention long enough for them to realise that you have all this passion and vigour.
Zak:
I think part of it is the niche nature of Punchkick when we started. We were reaching out to people to talk about mobile or we were speaking at events or different technology meet ups and what not. We were speaking about mobile and it was niche and exciting and there was no one else that I knew that was doing it. I had not met others who were also working in the mobile space.
Especially not in Cleveland so I think being in a niche market, that is a huge like off, because if you look at the new technologies coming out today and these new start ups. A lot of them are started by folks with no actual experience related to the industry they are in but they see an opportunity and it is a niche and they just go with it.
And so I think that in some ways in Punchkick we always find that the clients that we work with tend to really embrace innovation and innovative thinking, they want that and that is the language we speak so we were able to get in front of those people. Starting a company today in the mobile space or particularly in the digital space, that would be really hard.
I think my advice would be if I was starting another company tomorrow I would go for something that is niche, unique and novel. That helps a lot.
Trent:
Any ideas come to mind?
Zak:
Oh boy, I think sensors; I love sensors and wearables. The idea of building businesses that are alive where social is being conducted on the back end and the temperature of a room is adjusting. I just love this stuff. I think sensors and wearables, these are the emerging technologies that excite me. I don’t want to think about it too much though because I will say, as cheesy as it sounds, I adore Punchkick; it is my favourite place in the world to be and that is what I wanted out of business.
I often say to myself the next business is going to be product based. Like somebody places an order and I send a gadget out and I call it a day but truly that could never be enough for me. I think some of the friendships and relationships that I have here are some of the best parts of my life.
And that is what I needed and it serves that role for me.
Trent:
And you can tell by looking at your website, the about page in particular is one of the better that I have seen; conveying a feel for what your organisation is like.
Zak:
Yeah, I think transparency is such a big part of who we are. I can go on a tangent on that for an hour so I don’t want to go down that road I’m sure.
Trent:
I think that is a great road, we did talk about that in the pre interview; we talked about how everything is so incredibly transparent at your organisation. So let’s get a little more specific. What do you mean by transparent, transparent with your staff, transparent with your customers? Let’s talk about it.
Zak:
Really it is both but I will talk about the staff side. Ryan and I are not oracles; we do not have all the answers. I never had all the answers and I think that we really try are darnest to try and really have our team understand and appreciate that. So outside of each other’s salaries currently (and even that’s not forever) there is no topic that is off limits at Punchkick.
So every single day we have a thirty minute huddle where the entire company comes together. We talk about what is going on with our clients, what new pitches are in the air, what issues we’ve got, everything is up for grabs. We have a thirty minute huddle; everybody gives a little good news in their life so we have a base line of what is top of mind for everybody.
And then we do shout outs; which is where you can give some credit to somebody who did something above and beyond; so we got the huddle every single day and that unites us like a school of fish. I try to lead as transparently as possible meaning I don’t want someone to wonder what I am thinking. I want them to know even if it is uncomfortable. And I encourage others to be that way, so in our company, seventy almost people, you could come here and you would be able to vouch, no politics, no bureaucracy, the best ideas rise to the top.
And so we talk candidly and we give feedback really candidly. Even on the growth side of Punchkick that happens with Punchkickers. We launched something called the Punchkick Growth Team and basically every week a voluntary group of people, our first quarterly launch we had 22 people show up, we meet every Tuesday at nine in the morning and literally just come work on company growth initiatives.
So at the start of the quarter we delegate those growth initiatives out, people basically volunteer for a growth initiative that they think they can tackle. And we just grow the business together. So every week we are meeting and at the end of the quarter we just wrap up all the growth initiatives we can. It’s just like it is effortless in some ways.
I want people to know what’s going on. If we have a rocky relationship with a client I think the team should know that, if the client is ecstatic and loves what we are doing I think the team should know that. And if we are unsure about a new process or unsure about a new way of doing things I want the team to know that. That I think is our single best competitive advantage and I have seen how it can transform a company.
It is one of the things where I will meet with the folks who ask me, “How do you at this size keep the culture so strong?” And it is like to me it is easy, it’s transparency. It is also really loving your team; as weird as that sounds.
I care deeply about the people that we hire and I want them to love it at Punchkick, I want Punchkick to be the best thing that ever happened to them in their lives. I want them to stay with us forever and so I do what I can to make them happy and to take care of them and in turn they do the same back.
Just like this beautiful little utopia where you can be yourself, you can do great work and if you don’t like something you can just say it. You can just pull me into a room and yell at me and there are no repercussions.
And I think that transparency is a big part of that because I’m a human, I don’t know everything about growing a business and a lot of it I am learning as I go.
So there are only a few things that I feel good about on a day to day basis and one of those is that transparency is helping us and I know how to hire good folks. I know who makes sense at Punchkick and who is going to be happy here and when I sense something wrong I try to fix it. So people and transparency are huge.
Trent:
Let’s talk about the people for a minute then, when you are running a professional services firm with as many people as you have; getting the right people on the bus is incredibly important. Let’s go back to, I think you said 2 years ago you were at seventeen people when we did the pre interview; what did your recruiting process look like back then? Where did you advertise, how did you find people? How did you interview them? What were the things you looked for?
Zak:
Yeah, that is great so the interview process and then the hiring process. What would happen is I would get to a point where I knew I was managing something and we needed somebody that was better than I was to manage that thing or better than Ryan was to manage that thing. In the beginning what we did was job posts on Craig’s List, job posts on Chicago job board, nothing fancy. And we just interviewed a lot of people. So people would come in and we would meet with them.
The one thing that I feel in my life that I know is people. Most of what I do in my day to day, I feel like I am learning. Or problems are coming up and I am solving them as I go, people I know.
So folks would come in for an interview and I could just tell the excitement they had about a fast growing company, I could tell from the personality, somebody who is open and really comfortable in their own skin, funny and just light and pleasant. I used to say to myself when I interviewed somebody and I still do today, “If this person had an emergency in their life, they had a disaster happen; would I put them up in my house for a week?”
And so I used ideas like that in the background, when we interviewed we just looked for people that we thought were amazing and it worked. It really worked for us, getting the right people on the bus; that is such a struggle and the only advice that I am going to give on that that I feel okay putting out there is: ask yourself if you are a good judge of character, you align yourself with people that push you forward, that make you a better version of yourself, if the answer is yes then be on the interviews and look for those people.
If you are not good at it, if that is not your strongpoint, find someone who is. To help you on the hiring side because when you start a business, you are your people. I think that is even on our website, we are our people. Punchkick is the people and so I don’t know what could be more important than that. That would be my advice, either do it yourself or have somebody help you. Even if it is a friend, if it is a colleague, somebody who you know is just a good judge of character.
Have that person be there and even in the interview process get away from these lame questions that people ask like, “what is a trade bet?”, “what is your worst quality?” And then somebody responds, “I work so hard.” Those are not the questions you should be asking.
The questions I ask is “Why are you here today?” and “What do you love doing most in life?”, “If you could have any job here what would it be?” “Should you have been fired at one of your other jobs, what is the worst thing that you had done at another job that you think you should have been fired for?”
“What do you do for fun?” I want to get to know somebody and in fact even since our start we would have interviews happening and they would be interrupted a lot, like people would be walking in and out of the rooms and I would actually encourage that because it is a very Punchkick feel. That is how Punchkick is, you are in a room somebody walks in, they need something. It is kind of crazy all the time.
So I wanted people who could adapt to that pretty well. And even in an interview I would see somebody walk in; another Punchkicker might walk in and somebody who is being interviewed is completely thrown off, where somebody else says, “Hi”, introduces themselves. They take it in stride; those are the things we looked for.
It is kind of also on the transparency front again, letting somebody know what your business is really like because they are interviewing for the job and you are interviewing for the talent. So I think the more you can give them a sense of what it is really like the better.
Trent:
So you now have a sales team that you added in November of last year. You told me that that has worked out very well for you. So I wanted to spend some time talking about the details around building a sales team and how you get them to be productive and paying for themselves. Because I know from my past business experience that was a big challenge for me and it is a big challenge for everybody.
With respect to salespeople, prior to when you decided to hire, your new clients were predominantly coming from word of mouth, would that be fair to say?
Zak:
Yes, we had small periods where we hired somebody to be kind of a loan shark sales person, like kind of lone ranger. It didn’t work out and we didn’t really know what a sales team would look like. We dabbled in it but the majority, yeah. Work was coming from word of mouth, from bumping in to people at events and networking; kind of the usual.
Trent:
Okay and your sales team now has how many people in it?
Zak:
Our sales team now has six people.
Trent:
And did you hire all six at one time or did you hire them in pairs?
Zak:
Here is what we did. We had done enough sales to start to get an idea of what our strengths were in sales and how to multiply that. When Ryan and I used to sell personally I was always the guy who wanted to go out to dinner with the clients and wanted to get close with the clients; wanted to get the contract signed; I wanted to get the baby locked down; I wanted to make it happen.
Ryan was always the guy who had a million big ideas, super passionate about the technology and just brainstorming and all that. That combination worked really well for us. We called that a strategy relationship combination, strategy closer.
What we decided was, one, we needed a sales manager. We needed somebody who could come in and really be held accountable for having a sales team that was successful and providing the education whatever that team might need.
And then we hired what we called closers/mobile advisor. Let’s say an incoming lead comes in, they are the person who they are going to talk to on the phone. They are going to figure out if this is a good client for us, are we a good fit for them, what does the project look like; get that ball rolling.
And we also hired mobile analysts who are folks who do a lot of outreach. They’re looking what is going on in social and who are the movers and shakers and what is happening and they are trying to reach out to them and get meetings or keeping drip campaigns going, sending them what is going on with Punchkick and all that.
So we structured it that way.
Trent:
Okay, so let’s talk about those people that do outreach, because it is a huge challenge trying to get (as I mentioned earlier in our interview) trying to get people to simply give you a piece of their attention is incredibly difficult.
So when you hired these folks, first of all, are they solely focused on outreach or do they do outreach when there is not enough leads coming from the website to keep them busy?
Zak:
So when a lead comes in from the website that actually gets kicked up to the mobile advisor, that role that I told you about that gets on the phone and gets it going.
With the mobile analysts, which are the more outreach folks, those are typically people that we bring in, they are younger in their career and it is a fantastic training opportunity for them. And so what happens is they come aboard they’re doing outreach, they are learning the industry, learning about what we do and they are trying to build those relationships with the goal of transitioning to another role at Punchkick within nine to twelve months.
So it is almost like a combined training program but also providing a lot of value for us because they do outreach; which is really great for us because a lot of folks we reach out to actually do really want to learn more about Punchkick and what we’re doing and they are really happy to talk to us. That is why that’s worked I would say.
Trent:
And the outreach that we they are doing, are they using social media, are they making cold calls, are they using cold email, who did you tell them to reach out to and how do they actually do it?
Zak:
That is a great question, no cold phone, we don’t use that, nobody calls anybody that I can imagine. Our sales manager gets a wish list of clients that we would like to work with or folks that are doing really cool things that we would like to connect with and he’ll work with those outreach folks to come up with creative ways to reach out to them.
So it might be an email blast, it might be going to a networking event, where one of these folks are speaking and trying to get a relationship or a conversation going there. It is things like that. Let me think, I want to give you some more actual tactics because I think your listeners would benefit from that.
Social is a big part of it. If there is somebody who is doing something in mobile space or the innovation space our outreach team; these are guys and girls that really love the space and they love the tech space so they’re doing this anyway and they are reaching out and saying, “Hey this is great”, getting dialogue going.
Man, I don’t really know much more beyond that which is a testament to our sales manager I guess that I don’t have to be involved in the nitty-gritty there.
The goal of the outreach folks is to get a conversation with one of our mobile advisors. Somebody who is much more nuance and understand the mobile industry and can see what the opportunity is and go from there.
Trent:
Oh okay so the mobile analyst that does the outreach is the lead generator and they pass the conversation on to the mobile advisor who is the person who qualifies the lead and make the proposal and moves them toward the saying yes?
Zak:
Yes and the mobile analyst; that lead generation person will be there on those calls because that relationship is there and they want to learn and know what is going on. But yeah it is the mobile advisor, that closer role who is really looking for the opportunity and helping shape that opportunity.
Trent:
I would actually love to do another interview with your sales manager if you think that would be alright?
Zak:
Yes.
Trent:
Because I could easily so an hour long interview on everything they are doing. Please make an email introduction if you would.
Zak:
Will do.
Trent:
So we will shift off of the sales tactics then because we are going to cover that in a subsequent interview. Let’s talk a little bit about just what a compensation plan looks like. I know you have mentioned that you haven’t decided to go full disclosure on salaries yet, so you don’t have to go there that is fine.
So for the mobile analyst, do those folks get some kind of a base salary and then an incentive for number of conversations they start? Or how does it look?
Zak:
Great question let me begin the answer by saying we never found ourselves attracted to candidates who wanted to work on a commission only structure; I don’t know what it was about those folks and more importantly I can’t live with myself doing something like that. So our lead generation folks; they come in at a base salary that is significantly higher than most lead generation folks. It’s an absolutely liveable salary and on top of that they get a commission for the meetings they set up.
The mobile advisors like the closers I mentioned they also have a highly liveable salary with commissions built in for deals they close. And the sales manager has a highly liveable salary, more of a lifetime value; a small percentage of those accounts that grow and come in as a result of that team.
There are many folks who are going to say that this is not an ideal strategy, but I never wanted a salesperson’s need to make an income to survive to trump the desire to do what is right for our company. And so I wanted folks to come in and I would say to them, “I’ll make an investment in you and I want you in turn to in turn make an investment in Punchkick and find us the kind of work and opportunities that really grow us.
I think it is the right call and I can see it both ways but I didn’t want there to be a pressure to just bring in work because I think there is such a thing as bad work. I think that you can find work or projects that are not good for your company and for the kind of team that you have. And you have to have laser focus on what makes sense for you.
All of them get a very liveable wage and commissions.
Trent:
Okay, what percentage of your clients are in Chicago, the same town you’re in?
Zak:
Probably less than half, maybe half or less than half.
Trent:
And the folks that are on the sales team that are doing the prospecting; are they prospecting local companies or are they prospecting companies regardless of where they are because they are companies that you want to do business with.
Zak:
The latter, they are prospecting companies that we want to do business with. Wherever they are.
Trent:
Okay and how do you build lists of those companies? How do you figure out that is a company… You can sort of randomly stumble across them of course?
Zak:
That is a good question…
Trent:
And maybe I should be asking the sales manager.
Zak:
Yeah because when I was involved in sales it was just like, “Who am I meeting at events and who is doing cool stuff that I want to work with and I am going to reach out to?”
Yeah that would definitely be a better question for our sales manager because I don’t really know the answer.
Trent:
Alright, folks don’t worry, I’ve wrote it down; my list of questions to be asked in part two of this interview. Just make sure you listen to the second part and you will get an answer to that question.
Okay, what haven’t we talked about that, I am just kind of scanning the notes that I made in our pre interview, you really wanted to talk about culture and transparency, do you think that we have done a good enough job of that or do you think there is something else that is really important that would enrich the quality of this interview with respect to that?
Or anything is there anything that we haven’t talked about or that I haven’t asked you which you really wanted me to?
Zak:
So I’m looking at this question through the lens of someone, a young entrepreneur, what I’ve learned, what I can impart that would help them. Is that the right lens to look through?
Trent:
I think that is a very good lens yes, so let’s go with that one.
Zak:
Okay so, things I have learned, I think I have covered most of it, you are the sum of your team, you are your people. And so finding the right talent is crucial. I think transparency, letting folks know what you struggle with, where business struggles are, where the pain points are and where the success is is so important.
There is a feeling when a company is really unified and people know the direction it is going, it’s such an unbelievable feeling. And I have seen other entrepreneurs and CEOs who have walls up between their teams and themselves and I don’t think it is the right way to do it. But I’m just one person.
I think being passionate about the work you do, being in an industry or running a company that makes you so excited because if you are not someone else will be. I think that’s huge.
I think that’s about it.
Trent;
Well let me ask you, I’ve thought of a question that I wanted to ask you before we finish up. Have you ever heard of Verne Harnish’s Rockefeller Habits?
Zak:
Yeah.
Trent:
Okay, do you follow his… because I know you do the morning huddle, do you do quarterly and annual strategic plans?
Zak:
That is a great question and that is something I would love to expand on actually if I’ve got a minute here.
Trent:
You do indeed.
Zak:
Okay so we do the morning huddle and then quarterly we do something that we affectionately call the hunger games where we show everybody revenue numbers, expenses, client wins, new policies at Punchkick or new benefits; things like that. So we do that every quarter, with the goal being that all of that is transparent, everyone understands the direction we are moving and so on and so forth.
You mentioned Verne Harnish and that brings up one thing that I have found to be true for myself; which is I have always believed you have to do things your own way and you have to make your own road and I mentioned to you the Punchkick growth team. It is actually working incredibly well. We have so many folks here excited about growing Punchkick; owning the growth initiative they have and that is something we have grown on our own organically here at Punchkick.
Now on to our operating system, so we have an operating system now that is really really wacky and it is working so well for us. And here is what it is. We build apps and mobile sites and we do a lot of strategy and what not but most of the projects we do, we are doing in two week sprint cycles. And so what we do is, when you are on a project, you’re part of a tribe, you are all accountable for that project.
Every two weeks the project managers mark the project sprints red or green. Meaning we delivered, everybody made good on their promises or we mark it red. Every six months Ryan and I sit down and if we were fifteen percent profitable the previous two quarters, everyone who was on a tribe that was green gets an instant raise.
We don’t have to talk, no politics, no nothing. It is instantaneous. And the goal there is to convey the message that if Punchkick is profitable and our clients are happy, that’s it, you’ll get raises forever.
And so that has worked really well for us because what we find is if a team is working together and they are on a sprint together a QA tester could say to a designer, “You owe designs on Wednesday, it is now Thursday you should not leave here until you’re done because if you do you are going to throw this whole sprint off and none of us will get a raise. Like none. We will all be dinged for this.”
And so folks are holding themselves accountable. It is not a perfect system and we just launched it last quarter and so we are working on a lot of kinks with it but it is fantastic. It’s been a breath of fresh air because the whole reality for us is the only reason we have rules and have deadlines is because we want clients to be happy and we want Punchkick to be profitable. And when we are there should be no barriers to everyone enjoying that.
And that is not something we got from a book. And so one if the things that I’ve learned; I looked at some of the questions that you sent me over and I actually panicked when I saw “what is the most recent books you read”, I don’t read business books. I feel that the answers we need are within this team. And they are within myself and they are within Ryan.
So we paid really close attention to business and we are really comfortable pivoting and creating systems and processes that work for us and we don’t feel bad about it. And that I think is really important to think about. I think entrepreneurs sometimes feel pressure like, “Oh I better use this operating system or I am going to model my business after this book.” I don’t think anyone knows your business like you do and you should go with what feels right and for us this is working incredibly well.
Trent:
Interesting, very very interesting, so let me sum up what I heard you say. I think it was profound and I want to make sure that the audience understands it. You have projects that get organized into two week sprints and there is a tribe that is pulled together for that two week period at a time to work on that project.
And if things go well, at the end of the project it is going to be green. And if things don’t go well, and I am sure there is definitions of don’t go well versus go well, it gets marked as red. And over a quarter; (how many two week periods is that?) The is going to be six two week periods, so potentially somebody could be on six different tribes during a three month period or are they always on the same tribe?
Zak:
They are generally on the same tribe. Our projects are pretty large here, so you will be part of a tribe on a project and you will be on it. And then yes every two weeks a sprint gets knocked out another two weeks, another sprint.
Trent:
Okay, so when you get to the end of the quarter if you had a fifteen percent net profit margin during the quarter for the business overall the people who were on a sprint that got green automatically get a raise, yes?
Zak:
Yes but it is actually after every two quarters so we use two quarters of that. The reason we do this is one, it is raises and I think raises four times a year might be a little scary for us. We do it twice a year. But the bigger reason actually is because if a team struggles one quarter they can work really hard the next quarter to increase profitability and kind of still save it.
So we look at the last two quarters and the average, if we were fifteen percent profitable there is instant raises. Another beautiful benefit of that that I considered but did not realise the difference that it would make a lot of companies have sales and development but they are like very siloed/segmented and don’t work closely. At Punckick we all fit together so sales and developers; we are all friends and we are all close.
And so what happens is if you are on a tribe that is delivering green every single sprint, if you are seeing what
sales are doing and they are struggling to bring in new clients or revenue, it’s in your best interest to help sales close deals. So we’ll have designers say to the sales folks, “Hey I’ve got some bandwidth, can I help you with a pitch, can I help you with a proposal, can I design some mock ups for you?”
And that has been beautiful because it gets people understanding, “I’ve got to deliver but the company also has to be profitable.” It’s freaking awesome.
Trent:
Yeah no kidding; it sounds like it.
Zak you have been an absolutely fascinating guest to have on the show. I have taken several pages of notes as I have been interviewing you. And I want to thank you very much for making some time to come and chat with me and share the details to the degree that you have.
Zak:
Thank you so much for having me I’m happy to speak my mind any time. So thank you very much.
Trent:
No problem, and so if people would like to get a hold of you; just one, what is the one easiest way for them to do that?
Zak:
Email is definitely the best way.
Trent:
And do you want to tell the audience what the email address is?
Zak:
Oh yeah it is zak@punchkickinteracitive.com.
Trent:
Okay, Zak well thank you again so much for being on the show, it’s been a pleasure.
Zak:
Absolutely thank you.
Trent:
Alright to get to the show notes for this episode go to BrightIdeas.co/146 and if you enjoyed this episode please do me a favour and help me spread the word by going to BrightIdeas.co/love where there is a pre populated tweet awaiting the click of your mouse. So that is it for this episode, I am your host Trent Dyrsmid, thank you so very much for being a listener. I hope to have you back in the next episode which will be coming your way soon.
Take care, bye bye.
About Zak Dabbas
Zak Dabbas is the co-founder and CEO of Punchkick Interactive. A bonafide veteran of the mobile space, Zak has played a key role in the launch of integrated mobile campaigns for global brands including Harley-Davidson, Microsoft, Allstate Insurance Co., UPS, and Marriott International. Zak has overseen mobile strategy for Punchkick since its founding in 2006, and has helped the company experience massive year-over-year organic growth since its inception.
https://brightideas.co/wp-content/uploads/2014/08/Zak.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-08-04 06:00:522020-09-16 05:41:38From Zero to $8M: The Incredible Success Story of PunchKick Interactive
Brian Clark is the Founder and CEO of CopyBlogger Media, publisher of CopyBlogger.com, one of the most successful marketing blogs on the internet. On top of their huge audience they have built a very successful business by bringing to market products that their audience wants.
Listen to the Audio
Our Chat Today
Can any business use content marketing?
How should a B2B company get started with content marketing?
What advice do you have for companies faced with stiff competition?
How do you avoid being commoditized?
How do you suggest people promote their content?
How does one get publicity for their content?
What is the New Rainmaker platform?
What are some of the features that are going to be added to New Rainmaker?
What advice would you give me to get traction with hospitals?
https://brightideas.co/wp-content/uploads/2014/07/Brian.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-07-28 06:00:412020-09-16 05:26:32Brian Clark on Why You Need to Think (and Act) Like a Media Company
James Deer and his wife founded Gather Content, a new startup SaaS company doing just shy of $39K/mo in Revenue.
James started his career as a freelancer and built up a small client base. Eventually, he got so busy as a web designer that he had to hire a number of people. He quickly built up an agency to 13 people before he ended up selling it.
James will reveal the entire process he has taken with Gather Content – from concept to prototyping, getting customers, and getting funding, as well as long-term business goals.
Are you looking to grow a Saas business? Then this is an interview you do not want to miss!
Listen now and you’ll hear James and I talk about:
(04:00) Introduction
(07:30) How did you come up with the idea for Gather Content?
(12:30) What did you do next after developing a prototype for the app?
(14:48) What did you do after Smashing Magazine tweeted out your app’s landing page?
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
James Deer is the founder of GatherContent– a service that helps agencies gather content from their clients painlessly. It helps replace the chaotic process of sending word documents, and emails back and forth for when you prepare web content. Previously James and his wife built up a small digital agency to 13 full-time staff which they later sold.
https://brightideas.co/wp-content/uploads/2014/07/James.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-07-21 06:00:162020-09-16 05:19:14How James Deer Has Grown His SaaS Company to $39,000 in Monthly Revenue
Walter Bergeron is a multi-millionaire serial entrepreneur, a best selling author and Marketer of the Year. This Navy veteran started his entrepreneurial journey at the young age of 12, detailing automobiles in his parents’ driveway and has owned many businesses since then. In 1996, after he completed a U.S. Navy tour aboard the nuclear powered aircraft carrier USS Carl Vinson, he started his industrial repair company in a small shed in the middle of the sugarcane fields of Louisiana. His entrepreneurial path led him to sell his industrial company for $10 Million and is now guiding other driven entrepreneurs on a path to exponentially grow and sell their business to achieve their own 8 figure lifestyle liberating payday. For a free copy of one of his bestselling books go to www.walterbergeron.com .
Listen to the Audio
Our Chat Today
Tell me about the Pivotal moment you had before sales recently increased.
So you doubled your previous years revenue in just 90 days?
What did you do to freely gain an understanding of your market and clients?
Please tell me about the newsletter you created and the results you achieved.
Please tell me about the new client acquisition campaign.
Please tell me about the steps that lead up to your industrial case.
How did you get traffic to your landing pages?
Please tell me how you upgraded your lead generation system.
Tell us about the other companies that you bought.
Please tell me about how you create systems to run your business.
https://brightideas.co/wp-content/uploads/2014/07/Walter.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-07-14 06:00:322020-09-16 05:10:58Walter Bergeron Started From Scratch, Built and Sold His Company for $10M
Nathan Yerian is a co-founder of Adhere Creative, a marketing agency started at a kitchen table by Nathan and 2 other founders. Adhere Creative is now a 7 figure a year and agency with a nice roster of clients that pay monthly retainers.
If you want to learn how to build an agency like Nathan’s, this podcast is for you. In particular, we talk in detail about three of Nathan’s strategy for attracting leads.
One strategy is content marketing and we discuss specific questions as to how Nathan makes certain he gets the right content promoted in the right way so the right people read it.
We also talk about how Adhere syndicates their content and the types of conversation they have when a lead becomes sales qualified. They get them on retainer from Day One!
Listen now and you’ll hear Nathan and I talk about:
(04:00) Introduction
(05:20) Why did you pick Adhere for the name?
(06:00) How much revenue did you do in year one?
(09:30) What is your background in business?
(13:00) Where did you attract your first few clients?
(14:00) How has the type of client you work with changed?
(16:40) Please describe how you managed your retainer relationship
(20:00) What size of company do you target?
(23:00) How do you generate leads?
(34:00) How are you using twitter to promote your content?
(36:40) How does content syndication play a role in your content promotion?
(39:00) How do you handle the very first call with a prospect?
(44:00) Please describe what you mean by a marketing platform
(46:00) When does your relationship transition from free advice to paid work?
(48:40) Do your clients sign on for a retainer from day 1?
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Director of Strategy at inbound marketing agency, Adhere Creative, Nathan is responsible for the strategic direction of client campaigns. Nathan challenges his team and his clients to step far outside of traditional practices to breathe a creative life into a brand. The best clients for Nathan and Adhere Creative are those who are most willing to listen. While away from the office, Nathan enjoys traveling like a Roman, experiencing unique foods, craft beers and an engaging conversation with a stranger, soon turned friend.
https://brightideas.co/wp-content/uploads/2014/07/nathan.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-07-07 06:00:142020-09-16 05:00:01Advanced Tactics for Content Marketing and Lead Generation with Nathan Yerian
Graig Presti is founder and CEO of the agency, LocalSearchForDentists.com. This is Graig and I’s third interview and this time we are talking about something that nobody in the marketing world is talking about … leaving a bunch of money on the table.
What is this missing element? How and when to inject use of the telephone into your marketing and sales sequence. We will talk in detail:
When should you call
Who should you call
Why should you call them
What should you say in the first 10 seconds of the call.
We are NOT talking about cold calls.
For higher price point items, there comes a point in life-cycle of a lead when they need to talk to you. When you call your warm leads, there is a very specific way to handle the conversation. If you don’t have a process you will probably have a high failure rate and kill many great leads.
Looking for warm calling tips, including exactly what to say? This is the episode for you.
Listen now and you’ll hear Graig and I talk about:
(01:00) Introduction
(09:00) How does the phone play a role in marketing?
(17:00) How should your structure a call with a prospect you’ve not talked to before?
(21:00) How do you ask “trick questions” that make you look like an expert?
(25:00) Overview of Trent’s first call with a prospect
(32:00) How do you pre-qualify a prospect prior to making a call?
(34:00) How can a survey play a role.?
(42:00) How does silence play a role in closing?
(44:00) How do you recruit salespeople?
Resources Mentioned
GrabTrentsBonus.com
More About This Episode
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Graig Presti, founder and CEO of LocalSearchForDentists.com, is a foremost advertising authority who operates with dental practices all around the planet, assisting them to leverage the internet so they can generate more telephone calls, reach more new patients, and bring in more revenue. His strategies begin to work immediately and continue to work month after month.
Presti specializes in helping dental practices dominate their nearby location by using confirmed regional Internet dental advertising strategies to help them dominate the top rated regional research engines like Google, Yahoo and Bing.
Presti uses easy to understand stories to help his clients comprehend how they can improve their internet presence. He is a repeated featured speaker at dental conferences and other venues.
Presti has mastered the art of bringing a flood of new patients into dental offices, and has undoubtedly established himself as a top specialist in his field. His considerable accomplishments, and his industry contributions, led him to be showcased as a Newsweek Magazine Champion of Health, Wealth and Success.
https://brightideas.co/wp-content/uploads/2014/06/graig.jpg7202200Trent Dyrsmidhttps://brightideas.co/wp-content/uploads/2020/06/Bright-Ideas-logo-1030x255.pngTrent Dyrsmid2014-06-30 06:00:012020-09-16 04:53:27How to Use the Phone to Dramatically Boost Your Marketing Campaign ROI with Graig Presti
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The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
Dan Greenwald is founder, President and Creative Director of 
Zak Dabbas is the co-founder and CEO of 
James Deer is the founder of 
Director of Strategy at inbound marketing agency, 
