How Nick Avaria Scaled His Agency to $10M ARR in 3 years

Welcome to Outta Scale Agency. I'm your host Jordan Ross, alongside my co-host, AJ Cassada. And on this podcast, we are going to help you scale your agencies to eight figures and beyond. Collectively, we've worked with thousands of businesses, helping them add hundreds of millions of dollars. I myself are an eight-figure portfolio and have built this podcast to help you learn the lessons faster so you can grow your business without falling ahead of you. Thank you for tuning in. Now let's begin. Hey, what's up, everyone? AJ Cassada here, co-founder of RevenueBoost, back with another episode. And today I'm really, really excited to welcome Nick, a very to this show. And Nick has a really, really interesting story and background. Currently, he's the fractional COO for agency owners over 100 camera. He's acquired and sold seven agencies, and one of which he actually helped build to 10 million ARR annual current revenue in three years, which I've never heard about in the agency world before. I've heard of a lot, you know, SaaS companies getting those numbers because they're very scalable. But first, I've never heard of agency scaling to that level in such a short time. So the way he's able to do this because he's really a master of operations and people management. And we're going to really dive into all of that today. So Nick, thanks for coming on the show. Thanks, Remy, AJ. Yeah, for sure. So really excited to kind of dive into a few different topics. But first, just want you to let the audience know a little bit more about who you are. And how did you get into the agency space in the first place? Yeah, I mean, like it's kind of like an inadvertent agency owner, which I think like a lot of people are, especially like, you know, a bit of an older generation. Like you're kind of an accidental business owner. I was at this like firm that they were doing, you know, like around like a hundred million plus. And we not in any way related to the agency space. And me and the VP of sales and marketing ended up breaking off that company. And we started our own consulting firm. And it was all about like operational efficiency and like sales and like how to tune up your sales team. And one of the things that we saw that after we fixed all the operational problems, the people were basically like, okay, now that we fixed these things, now we want to scale, now we want to like, and so we were consulting for firms that were doing anywhere between like 50 million to like a hundred and 50 million in annual revenue. And so we started a digital marketing team. And like this is going back like to 2009 or 10 ish. So 15 years ago. So we started as digital marketing firm like ground up, did our consulting thing on the front end and left behind the digital marketing team to basically act as their fractional digital marketing team. Cause back then like digital marketing was new ish, right? So after that, we sold it to another firm. And at that firm, we like, I stayed on and we grew that and we grew that through M&A. We grew that through like sales and marketing. Like it was a combination of things. And that's ultimately when we hit those numbers. Now after that, I'd like a very specific contract. I basically exited out once my contract lapsed. And I started like two of my own agencies now. And our mandate there is because we see like where technology is going and things like that. What our goal is is to have like a 20 person company that does anywhere between like 50 and 20 million like ARR, right? And I know that sounds crazy. And like, you know, like so it's not lost on me. But I've seen what in my time as like a fractional COO, I've seen what people can do with like the right clients with the right offer with the right value generation, where it's like a win win scenario. And I truly believe that this is good. This is inevitable given the technology and where it's going. I've seen agency struggle with hitting, you know, like numbers like this is going back a ways 200 K per FT, right? $200,000 per employee per year. I've now seen agencies hit numbers like five to six hundred thousand dollars revenue per employee. So in my opinion, it is an inevitability that like somebody is going to get to a million dollars in revenue per employee at some juncture, right? And that's actually what I'm trying to do. It is my strong belief that most people at agencies are underpaid like like not only the owners, but actual employees. And to me, the the easiest way to pay people more ownership included is increasing revenue per employee. It's very simple. Like, you know, Goldman Sachs Apple, like, these are companies that pay incredible amounts to their staff on average. And the reason is that they have really high revenue per employee. And so like, this is like my way of wanting to grow a business, but I don't frankly, I just don't want like a hundred person company. I've been there. I've been at companies where we, you know, we had hundreds of not like a thousand plus people working there. And it like, you know, it becomes pretty faceless after a while. So that is basically what I'm trying to build right now. I do the fractional COS up because frankly, I'm not needed day to day in my own agency. Like I have a leadership team. They take care of everything. I pretty much work inside of it like five to 10 hours a week at max. And I love working with agency owners and I like love working with companies that have strong cultures. And agencies have strong cultures. And I'm really good at this. Yeah. Well, that's awesome. That you're able to get out of the day today and just spend more time doing, you know, doing the consulting work that you really enjoy. So definitely want to dive into that as well. But one thing you mentioned is so you mentioned that you see really where the tech is going. What do you think it'll take for you to build a 20 person, 20 million other company? Like is it, are you, when you say tech, you mainly mean AI and automation or what else do you think it's, you know, a bull's-down to it if someone wants to increase their revenue per employee? I mean, I think like just to be clear, like I'm talking about people that are going to be full time, right? So yeah, there's a combination here where, like even right now, my employees have assistance, right? Like we legitimately get them assistance. So I don't care if you're like a digital strategist, like you're getting an assistant. Why? Because time and time again, operationally, I've seen really high paid people like people that are getting paid like 70 to like 120k, not having an assistant and they do like $10 work. So our angle on this is like anything that is below like, you know, there's books out there that tell you like if you are earning 4x more than it takes you to outsource this thing, you should out use it. Now in my world, I think that businesses need to be way more aggressive about this. Like I think like 4x is too high. Like if somebody's getting paid, you know, 40, 50 bucks an hour, I don't want those people touching like 25 dollar tasks. So even if it's just half, right? Because these people are expensive. And like the math is really easy. Like if people are doing 25 dollar tasks an under for half their time, it's like, well, you're over paying them half the time. Just take all that work, centralize it into one person, take two of these high paid people, they get an assistant now and now they're only doing 50 dollar tasks constantly, right? Which is what they're paid to do if they're paid 100 grand a year. Like, and I think this is a hugely miss opportunity. So like right now, we are outsourcing to like South America, the Philippines, Eastern Europe, like all these admin tasks. Some of these are just like low value delivery tasks that are strategist quality assure. I think that as technology goes on, we may not need the assistance and or the amount of work that a person will have to do versus a machine will do is just going to become like law upside it. Now, it's not lost on me that as technology proliferates and people become more productive, the market, like basically there's going to be a surplus of work, like work availability, which means that the market will inevitably absorb it. Because again, if you imagine like somebody can do four times more work, at some point, other people are going to catch on. And then like that savings is going to get passed on to the client because it's inevitable or clients will be demanding more volume because it takes more volume to get a result. But where I think it changes is when you can make agreements with clients that are value based, right? Where you just create amazing win-win situations for them and for the agency itself. Now, these clients are a hard to find, which is a totally different topic. And B, you have to be able to have some sort of value that is well above the market. So like, for example, you can't just be like getting average results for people like that doesn't work. You need to get well above average results and actually have some sort of rarity in the skill. And my whole thesis is pay people above their pay ban. So like, if you grow and do like any searches on like, Hey, how much should I pay X, Y, Z roll? And it says, Hey, this roll gets paid 70 to 90. The whole thesis behind getting really high revenue per employee is you can pay them more than the upper, which means that they're not going anywhere. So like you've basically slapped the golden handcuffs on people they can't leave. And when they're the top performer, you don't want them to leave anyway. And what inevitably ends up happening is this, everybody complains that it's really hard to hire top performers. But then when they get a top performer, they don't pay them top performer wage and that top performer finds top performer pays somewhere else and leaves. Yeah. For sure. And I get the problem, right? Like the problem is, well, I can't afford to pay this person this much. Physically want to pay them, but my margins are not good enough to pay them what they want. And I have like three of these people or two of these people. And I got to pay these people, you know, like 100 grand and they're currently beginning to pay 70. or something and everybody else is getting like 65 or whatever the number is. And I can't afford to give like three people this like huge raise. And that is a business model problem. And that's why like low revenue per employee firms cannot retain high caliber talent. And I don't want that problem. I don't want anybody to go anywhere. Because here's the thing, you can't fight a two front war and win. So you can either try to grow profitably or hire the best people. But not both at the same time. If you think about it, like if you have people quitting on you every six to 12 months, good luck growing because you have to retrain those people who are over again. And I don't care how scalable you make onboarding. The brain drain that happens if you're turning internal people over that fast is not going to happen for you. And even if your onboarding systems are immaculate and just absolutely amazing, here's the problem. Clients are going to notice the amount of employee turnover you have. And they're going to start a either a asking questions or be relationships are going to be destabilized, which is inevitably going to come back to the actual problem, which is employee churn. So like I want you to understand like this one thing employee turnover actually from like a business perspective. Like if you take your emotional hat off, it actually doesn't mean anything. It's like who cares? But if you want us to look at this selfishly, employee turnover directly correlates to employee into sorry clients turnover. The more employees you turn over, the more clients are going to turn over why? Because onboarding is not perfect every single time. Context is lost that context helps enable results and enables client relationships. Those things start breaking down. The inevitability of it is is that clients are going to turn over. And that's bad because when clients turn over at a higher rate, it affects our top line greatly. Because something that most people don't understand is that when you cut your churn rate in half, your monthly churn rate in half, you are going to double your business. So for example, like if you have like a 10% monthly churn rate on your clients, you turn over 10% of them per month. If you go down to 5%, you will double your top line revenue. If you go down to 2.5, you're going to double your top line revenue. This is literally how it works. That's a lot of really good points there. I think anytime we've had to keep personally, if it always just feels like okay, now we're stagnant, we have to patch holes in the ship before we can keep going forward. I love that you said to pay people that hired the top end because one thing I've realized is, let's say the average role is like you said, 70 to 90K. If you pay them 10% more than the top end of that, that's not just 10% more output. You're going to get like the cream of the crop. It could be like double or triple is productive, right? So I think that's really, really powerful as well. And I have like a specific example of this. We have somebody that has been with our agency basically since like month three and they're the top performer of our agency. And their churn is sub 1%. Yeah, they have sub 1% client-churn on their book of business. In the past, like before we figured out kind of the formula to scaling with low sales because our sales are low, like our closes per year are low. I'm going to tell you that right now. The trick to scaling is really like keeping churn as low as humanly possible and being obsessed with it. We had account managers/digital strategists that had churn in the like 15 to 20% mark. Like we in one in particular was above 20. And we had a few that were actually not a few. We had a lot that were in that like five to 10% churn area. And I know that a lot of people say like, oh, like 5% is good. It's not good. The larger agencies are, I assure you, large agencies are obsessed with a getting the right client. They're not obsessed about getting clients. So like I want to be very clear about that. They're obsessed about getting the right client. Number one, and then number two, never allowing that client to leave because the value at the agency is too good for them to leave. That's really what the game is about. And there's a lot of guys out there that represent, you know, like if anybody wants to sell their agency someday, there's a lot of guys out there that represent agencies on sale or like private equity firms that are looking to buy agencies. Unless there's something really special about your agency, there's like a unique sort of mechanism to it or technology or something that makes it like abnormal in a good way. If you have a normal ish agency that is sort of like normal ish to market, meaning like there's no special like proprietary technology, et cetera, they're not going to even look at you unless you have like a sub two and a half to three percent churn per month. Like they're not because they understand that what you're ultimately buying is a client book of business. Hopefully there's a sales mechanism to enable churn to be offset by sales and get some leftover meaning some form of growth. But if the churn is too high, they know that all sales and marketing mechanisms break, right? So things work for a season. And if you got a lot of your leads from say like Google ads in the last like five years, like I know a lot of agencies that you know starting January, February, March, like the Google ads train on like getting leads for your agency started breaking down a bit. Private equity firms know this, not specifically about that, but like in general. And they know that marketing funnels slow down. And so the only thing you're actually left with is this churn rate. And so if the churn rate is high, that's dangerous because you have a depreciating asset. Like basically churn is like creates depreciation in the asset. And the asset is the business as a whole. And so one thing that I generally run into a lot is people surprise about like getting to 2.5%. I mean, it is a difficult thing, but it's like actually like fairly simple step wise to like enable it. Generally the problem becomes people's mindset where they always set a target of like say like 5% or 7% per month, which is really high. Like I mean, if you're setting a target of 7% per month, like you're talking about 84% churn for the year. Yeah, we'd love to dive deep into the steps on that. You mentioned wonder ready, which is employee churn. I thought it was definitely interesting how you meant how employee churn released a client churn, which makes so much sense, right? Because if clients like their building relationships with their people and that keeps changing, they're wondering what's going on. And like you said, all of that contextual knowledge disappears as well. On the employee churn, besides paying people on the top into the range, what else have you found to retain a talent? I mean, like look, like the obvious one is culture. And the interesting part about culture is that most like I'm going to say something somewhat controversial here. And say like most people are like, oh, people love working here because the culture is good. If you work construction or something like that and you have a good culture, that's an attractor of good employees. It is. It truly is. It's a strategic advantage. Egencies understand culture so well for the most part. Like I'm not going to say 100%, but like 90, 80 and 90% of agencies understand the benefits of culture so well that they have amazing cultures. Like they're friendly, they're nice to work with, they make things fun and engaging. They do a very good job of it. So much so that I don't actually believe that having an amazing culture is actually a strategic advantage in an agency anymore. It is just the cost of playing the game. So I'm not telling you like it's optional. Like you guys like think like, oh, Nick doesn't think culture is necessary. It absolutely is necessary. It's just a minimum viable product thing at this point. If your agency is a product, it must have a good culture as like a starting point because everybody else has a good culture. So it's not a strategic advantage. It's just the absolute minimum that you can have. So it has to have a good culture. You have to pay people above market because remember, like we have to hire the top people here otherwise the system does not work. And really we have to set very, very clear goals with people. And I'm talking crystal clear like, hey, here's item number one, number two, number three, these are the top three things you got to do. And here's the numbers that are associated with the top three things you got to do. And here's your rewards if you hit these things. Like it has to be that clear at no time can people sit there and not understand what it is that they need to do. So employee turn is one thing. What else, what else if you're auditing agency and trying to improve their share and get it below 2.5% what else what are the steps they need to take? Yeah, I mean like first of all like this sounds like a kind of statement. But the first thing is just having proper measurement systems in place, right? So like getting your dashboards in place, understanding what your client's turn is. Like do you understand what your client's turn is by account manager or strategist like whoever you plug the account into, right? Like per person, I call them like a client account manager. Like they can have various sites. So like what's your turn per client account manager? What is your turn by sales person? So for example, if you have like three or four sales people, are there sales people that on average have higher turn than others? If so, it might be time to go look at how they sell and like pull up the recordings of the sales to see how that's breaking down. I have seen many times where sales people have double the turn or triple the turn of other sales people because they're over promising on the call to close deals. So sales is definitely like how it's being done matters because that's the beginning of the client experience and you're setting expectations at that level. The dashboards, like look, dashboards are in my opinion like overuse as a word, although like they are accurate to what they are. What a dashboard truly is is a communication feedback loop. Like there's some sort of behavioral action that people take because agencies are just bunch of systems and a bunch of people. People take action against the system or of their own volition. The dashboards measure that behavior because they do things, right? We close deals, we don't close deals, we fumble clients, whatever. That information comes back to the dashboard. The manager reads the dashboard and then he says, okay, there's a problem here. Goes to the individual where the information came from, the data came from, has a conversation with them to figure out what went wrong and why. And then basically do a behavioral change saying, okay, let's try this instead. Let's change the process to this. Let's do these other things moving forward and the person does the behavior and then the feedback loop basically starts all over again because the person is now going to change their behavior. So the numbers are going to be different. So it's all about behavioral feedback loops and when it comes to churn, this is what matters. Like what is the behavioral feedback loop on sales? What is the behavioral feedback loop on the like how we treat clients? What is the behavioral feedback loop on like how we sell expectations? All of these other things, right? And what I've found is that not enough people have the behavioral feedback loop and they and or it never closes. Like either people don't know how to manage the numbers. They don't know how to read the numbers. They don't know how to actually get people's behavior to change, which kind of leads me to the second point, which is about the people management, especially in organizations where there's a middle management layer, but even if there isn't a middle management layer where you, where only the owners, the only manager, getting people to change their behaviors a hard thing, even in the face of numbers. And this is the number one breakdown that I actually see across the board. Like this is the hardest thing to figure out. How do you change people's behavior to be in line with successful behaviors? Very, very difficult. And management is a skill set. Management and leadership is a skill set that can be learned. It's a learned behavior. Nobody's born with it. People are born with charisma, which is different, but like raw charisma alone is actually pretty ruinous in the long term. So like you're not going to get behavior to change out of people with like raw charisma. Like there's other tools that you need. But middle management ability and techniques is the number one breakdown that I see in all agencies. Like we just can't like, it's like we know the numbers are bad. We know that there needs to be a change in the actions that we take, but we can't get people to actually change their actions because we don't know how to manage people. Once those two things are figured out, like the feedback loops via dashboards and the people management stuff, then client-turn actually becomes fairly easy to fix. And what I've noticed over time is that your first 100 days of onboarding or so of onboarding a new client have to adhere to like a very specific rule. And the rule that I have is that onboarding should be about 35% expectation setting in the first 100 days, 35% education and 30% experience. Now if like those numbers are too complicated, just call it like a 30. So if the onboarding is one third expectations, one third experience, one third education, it's the right balance. And like this is why when clients are buying from you, they're probably in a sales process with other agencies as well for the most part. You would not believe the number of times that at my own agency or at other agencies that I work with, a client comes in after a month and they're like, where is this part of the scope? And people are like, well, what do you mean that part of the scope? That wasn't in the scope. And it's not that the agency made a mistake. It's that the client literally forgot what they signed. And the scope that they're referring to was from a different quote altogether that they didn't approve, like meaning like from a different agency. So expectation setting, the right cadence that I've found is setting expectations with the clients in the first 100 days, anywhere between eight and 12 times. And that sounds like overkill and it's not. In fact, in my opinion, six of the times that years resetting expectations with the client should happen in the first six weeks. People forget. Did you know that the agencies that grow the most and scale the most are the ones that have mastered one thing, client acquisition? I've spoken to thousands of agencies and this is almost always the number one problem holding the back. And it's hard because how do you find the time to work more on sales when you're already so busy running the business? How do you know what channels and what strategies to use? And more than anything, you know, we're in a competitive space. There's so many other agencies, marketers, consultants out there and it's hard to stand out. Now fortunately, we've created a free Facebook group to help you solve this problem. We have over 10,000 other agency owners and B2B entrepreneurs in our group and you can join it for free as a podcast listener. Go to Facebook.com/B2B Sales and Marketing Secrets or just add me on Facebook, AJ Cassada, and you'll see it on my profile. That's Facebook.com/B2B Sales and Marketing Secrets. We share so much free training in there. Often we'll stream these podcasts live so you can actually like hop on and ask questions. We share templates, resources, guides, all of our best stuff is in there as well. A lot of really useful material. So definitely check that out. Take advantage of it. Free, it'll only take you a minute to join. And if you want to go further, if you actually want some expert help when you want someone to help generate leads and clients for you or someone to even work with you one-on-one to teach you how to do it step-by-step, then I'd love to chat with you. Go to revenueboost.net/contact. That's revenueboost.net/contact. And you can book a consultation call with either me or one of my team members to talk about your agency and how we can help you grow. All right, let's get back to the show. Yeah, I mean, we definitely all made a mistake of client asking literally a week or two after signing about something and it's like, wait, I told you that's like on the sales call, right? But yeah, they forget and they need to be reinforced. What is the attack for you? Is that like emails going out or like even mentioning the same things on like check-in calls or-- Yeah, so like first of all, directly after signature, because they're like, look, our packages are standardized, right? So like if you have standardized packages, it's really easy. You can pre-record a video of like the exact breakdown of the scope and send it to them, A, in like the-- basically when you send them the contract, so they have it there. I mean, it's in the scope of the contract anyway. So it doesn't matter much, but it's there. Then you recent them the video after onboarding. Why? Sometimes after signature, other people get involved. So like somebody signs it, like they have signing authority. Now it's like, but your daily point of contact is someone else. And maybe they were somewhat involved in the sales process, but not fully. They don't fully understand it because they wanted the signatory. So like this video goes to them. And if you don't have a video because your scope is different every single time, this translates into a meeting to actually be like, look, this is what you bought. And that's part of onboarding. So like a lot of people skip the step of like this what you bought and go straight into like, OK, we need these files and we need this access and we need whatever it is that we need. And like the first 15 minutes should be like, this is what you bought. And this is what it's going to look like for the next couple of months. Reminding them of that again about a month in my opinion, so slow. So like we generally shoot people like a loom video like checking in after two weeks, because we only do monthly memes with clients unless it's like ad hoc necessary. So it's like, here's a loom video. This is the progress that we're making against this scope. So it's like, what are we making progress against? The thing that we talked about when we initially onboarded you at the one month, same thing happens. Six weeks later, same thing happens, right? Like basically this happens every two weeks, like clockwork for the first three months. But then there's also like additional items in there where we have videos about the specific subitems of the scope. So for example, like if we're running Metaads or Google Ads or like whatever kind of ads or if we're doing certain types of creative, like there's basically like these short videos that are under five minutes long that tell people like, this is what, how we do it. This is why we do it the way that we do it. So we're inevitably setting expectations with a client about what they can expect from us. And when those expectations are crystal clear, it doesn't look like a miss. Like it doesn't matter what you do as long as you deliver against it reasonably. So the clients just forget. And so like the problem is, is that scope creep happens and clients heads all the time. And I don't think people understand this. It's like, why is a scope creep? It's because the client in their head is unclear about the expectations. And when they're unclear about the expectations, they're default at what they've been taught to do is push. It's like, if you're unsure if you're getting maximum value, push them for more, if they give you the value, then push them for more. And you're supposed to keep doing that. Like this is literally what like internal teams talk about. It's like, hey, push your suppliers for more until they don't give you more. Because if they don't give you more, that means that like we're on the right side of the equation and we're getting our value for our money. So it's like an exercise and just like, obni bus asking for more. And the problem that agencies have is that for some reason they don't understand this. And whenever the client pushes them for more, they give them more. And so the client's like, oh, wait, you would think that giving them more is better and better for the relationship. It's actually the opposite. Because in the client's mind, when they push you for more, then you're giving them and they get it in their heads, they're like, okay, well, I'm getting more now, but I wasn't getting more before. Does this mean that I was overpaying up until this day? and it's actually like a very. negative thing because they're like wait like I've been we're three months in now and now I'm pushing you for more I'm getting 20 30% more. Did I not get 20 30% more for the last you know three months like did I overpay by 30% what's going on and so you need to hold the line and how you hold the lines holding this expectation. The other third is experience right so like handwritten notes sending them a gift that's customized to them right like things like this get their birthday down get their anniversary date to send them like something on these dates this seems like rudimentary stuff but very few people do it why because there's not enough time and this why you need like an executive assistant as an owner or you need like assistance in general inside the company because they can do work like this. Yeah and I'm surprised how many agency founders I mean that don't have an assistant like even like even they're doing like $10 tasks $10 prior tests right without even realizing it what makes a no sense. And then the last third is education and this is educating people about the product educating them what good looks like educating them about you know you don't need to go into like technical detail they just need to be educated to a point where they understand what good is and understand what bad is and understand what's possible that way when they get like you know these BS like outbound like we are going to double your sales messages they're not tempted by it because they're like they know enough to understand that that's not possible given what they're currently getting so that's really what matters is educating the client so that they a like every agency owner out there that I ever talked to I'm like have you ever met with a client and they're unhappy and you look at their results because your team's been delivering against it and you're like the results are amazing and you look at these you're like there should be no reason for this person to be unhappy and you meet with them and they're unhappy because they're like oh the results should be better ball of law and you proceed to explain to them why the results are good versus benchmark versus industry versus whatever it is and you explain to them why it's good and all of a sudden the client if they have you know high emotional intelligence they're like oh I didn't know that this is actually really good isn't it it's like yes and then the clients like super happy from that day on now that is really hard to do like in the sense of once the clients unhappy about the results telling them that the results are good is like it's a very difficult conversation to get them on the right side of it because the client understands that your own self-interest as the agency is baked in it's like it's in your best interest to tell me that things are good because that way I won't drop you so when I talk about education I talk about telling people what good looks like in the first like 30 days before any actual like monthly results come out why because if you tell people this is what good looks like and then you hit it it's unbiased if you tell them what good looks like before you achieve it it's valid if you tell them what good looks like after you achieved it it's invalid in the client's mind so the organ matters and you got to get in front of them early and I'm not talking about like a piece of education I'm talking about multiple pieces of education that help them understand like what good looks like in what context on which platform etc etc etc so these things add up quite a bit over time and so we have to educate them not only like tactically and results wise but also like strategically and market wise and like all of these other things and there's options you can either do this via videos you can do this via meetings you can do this via whatever if your price points too low where it's like you can't wake love it you got to do videos right because videos are scalable you shoot them once show them many times if your service is a bit more wake level you're charging like you know five or not five like more like 7500 per month 10k 20k a month it's like you can do a lot of these things manually yeah they cost time but it's one of those things that wouldn't once they learn like a lot of these things can go away and you just refresh them and you're like already scheduled meetings but once you have that level of alignment the clients aren't gonna go anywhere and that's actually what this is all about and alignment is like a very corporate word I find but it's accurate the reason that we're setting strong expectations and education particularly is to create alignment between us and the client because when we start there has to be some level of overlap like if you look at it as like a Venn diagram like two overlapping circles right there's got to be some sort of overlap for them to have signed on the dotted line to become a client in the first place but our job then is to basically take the circles and like fully overlap the one hundred percent as closely as possible because when we have that level of alignment the odds that a client are gonna leave are basically zero because now we've taught them to see the world the way we see it and if we think we're doing a good job they think that we're that we're doing a good job the problem is is that there's a lot of times that agencies think they're doing a good job where the client does not now if you think that you're doing a poor job on the results that's a different story like the minimum viable is that you actually do what you say you're gonna do like what you sell you actually do if you don't do that like you got nothing so whatever it is that you promise you got to deliver on and then you got to teach a client why that is good and if they understand that that is good they're not leaving yeah really good points especially I love the point about how you want to bring up the education around results before anything even happens that you're not caught on like the defensive mode right it's kind of like in sales like you want to handle the objection before it comes up because if you the give the objection then you handle it then it's like well they expect you to do that exactly it yeah addressing it once they bring it up like it's like like speaking the words out loud give them power so you'd never want them to speak it in the first place if it's in there I didn't it's addressed it's like everything's fine yeah hundred percent hundred percent awesome anything else on client-chern anything else kind of I mean I think that's like a really like a whole mini masterclass right there but is there any other final thoughts on that so like the most important part of the whole thing most agencies don't give their clients enough insights and if you've ever had and client tell you the agency's not leading me or like you guys aren't leading me or you're not coming up with ideas or whatever like you want to call it right this is direct translation for you have brought me zero insights and what I would categorize as an insight is first of all there's like three levels of insight okay there's industry wide insight that affect their industry like the clients industry there are business level insights for like their own business and then there's a third one which is actually like marketing level insights meaning like for their business for the function of marketing you need to bring to the client all three if you want to be able to retain them for a really long time what does this mean an industry level insight could be something like hey in your space these things are starting to happen right there's consolidation beginning to happen or there's like a p firm that's like buying up a whole bunch of your type of business like that's an industry level insight if they don't already know it a business level insight would be like because you have x y and z that is you meet to you we can use this to capitalize on current market conditions a marketing level insight would be like given your type of business these tactics these mean opportunities from like a platform perspective or like an ad buying perspective or whatever have appeared and we can capitalize on them the commonality that all three have is that something is happening in their world that we are aware of that they're not aware of and if they are aware of it they don't know what to do about it so we a make them aware of it and if they're already aware of it that's fine number two what to do about it how to capitalize on that thing that insight if we can tell people what the insights are even if they already know what they are but we came up to the monoron or we just asked them like what's going on with your x y and z and we take that and we bundle it with an idea on how to capitalize against it this is what clients are looking for they're looking for that strategic partner that will help them look around corners tell them see into the future and get there before their competitors ultimately so that they can gain market share gain which I mean is really gain sales etc right agencies don't do this enough and they need to do it structurally at minimum quarterly and then have very specific initiatives that go against it now if you're saying well my scope is static it's we're on MRR it we're not project based it's fine I guarantee you that these insights etc there's something that you could be doing via ad buying via creative via whatever to capitalize against these insights so you got to show people insights how to capitalize on them and by the way the capital capitalize on them is a very clear logical plan of we're gonna do this number one two three four five in sequential order and by doing these five things we're gonna be able to like get this outcome people are not doing this so they're going to like monthly meeting after monthly meeting or meeting after meeting being like yep we did a bunch of changes this is how your your your ads change or this is what happened ball blah whatever and it basically becomes this like monotonous like meeting where every means the same and you can't have that you got to sprinkle these insights in otherwise like the client is gonna flatline and get bored and they they will feel like they're not being let and that you're not giving them ideas and inevitably they're just gonna leave you because because good clients will not stay. Like the type of clients that I've been talking about all along, the guys that pay a lot of money, they pay more than average, the guys that are gonna stay with you a long time and like do like some sort of value-based play where you can make a ton of money, are not gonna sit around and just be like sit in boring monthly meetings, you know, 12 months a year. They're not gonna do it. They're gonna leave. - Yeah, bring something fresh. Yeah, I love it. That's a really great tip. Talk me more about that about the client side because you briefly mentioned that at the beginning of our conversation about how for you to get your revenue per employee really high, it has a lot to do with the offer and the value you're giving and like picking like less clients, but clients that are gonna be big clients, right? So how do you, I would love to hear more about that. - Yeah, I mean, you have to find clients that like understand their product market fit really well. So I think the mistake that people make is like, look, closing new, like getting new clients is easy. Like if you're willing to close any type of client, it's not particularly hard, right? But if you want the right client, it's incredibly difficult to find and close them. What you want to generally do to have a really high revenue per employee is have a blended mix and you're pricing between a baseline retainer that is maybe a bit lower, but then add in some sort of upside percentage. And there's a lot of forms that this can take. My favorite is just, hey, if we increase your revenue, we want x percentage of the increased revenue from your current baseline, for example. And then the suite of services that you offer are really wide, meaning like you're gonna get all these services that most of the time would cost five to seven K, you give them a retainer for say like three or 2.5, and then you say, well, the rest of it we're gonna make up on this contingency around percentages. You can do that based off of sales, you can do that based off of row as with some sort of like baseline of like volume. I've seen people do this based off like qualified leads, et cetera. So like there's various mechanisms that you can do, but in my opinion, like if you're going commission only, it doesn't make sense because like there's certain like administrative tasks that need to be done for an account, going all retainer in my opinion, I don't care if you value base price, you're leaving money on the table. I'm not gonna be convinced otherwise. Really. The correct blend is having like some sort of retainer and some sort of commission. And the better the company is, the less your retainer should be, and the more your commission should be. If their product is not as good, then your commission or your sort of your retainer should be higher, and your commission should be lower. Okay, so it's on a sliding scale. So like when we are, when we get leads, we are very particular about ensuring that we believe that the product will sell. Because here's the thing, like I'll take, like I use an e-commerce example, putting up an e-commerce website and selling a product is not hard. You know, it's just whatever. But launching a product that has a really good brand and a really good story and has like a specific type of functionality and, you know, so on and so forth, like all the elements that make a good e-commerce brand slash product is hard. And not a lot of people have figured out how to do it. So like there's a ton of leads that you can find and what it's like, I have this thing. I'm doing 50K in sales per month, ball blah, and you're like awesome. Scaling this, like it's like, okay, so you're gonna scale it off the power of ads. It's not off the power of brand. Like people don't really care about it. You don't have like a, you know, like a good cause or like a charity that you donate to as part of this. You don't have like product functionality, which means that like it is slightly different and meet some sort of market need. It's like that product's not gonna go anywhere. 'Cause it's just like, if you're selling a bunch of candle holders, like no one cares, like go sell them on Amazon. It's like, that's the problem. So you need to find clients that have a good brand, that have like an R opinion, it's like brand and functionality. That is different from like the same thing, like your competitors basically, right? So you have to be very careful. And so like we basically do an analysis, we do an audit of the client. You know, a lot of clients are like, oh, audits are standard when you are in the sales process. Like you get access to their Google AdWords or you know, meta, et cetera. We are auditing them for, do we want them to be a client as much as we are auditing them for insights so that we can close the deal. And this is what dictates like how much commission we want. Because like, look, we've told people, it's like, hey, like we don't know if like this is really a fit, but we'll try if you go 100% retainer. And we'll tell them exactly why. It's like we just don't think that this thing has the brand or you guys are going to need to go work on the brand and then clients come back and they're like, okay, like if we work on the brand, can we switch the deal over there? And it's like, yes. It's like, well, we want to work with you in the meantime. It's like, great, 100% retainer. Right, right. And that's fine. But we are very upfront with people about like, what we think the problem is of why we were not willing to put like our money where our mouth is in terms of like doing some sort of commission-ish, like performance-based deal. And again, never go 100% performance-based, always have a bit of a retainer. It's just good. Yeah, and it's good. Like what the sliding skill looks like of retainer versus like, you know, performance. Yeah, that's awesome. No, I really love that break gen that's really, really useful, just like looking at the sliding skill of it. And awesome. And well, I think just to wrap up for the last couple minutes here, one thing I want to touch on that you mentioned earlier is that you're fully out of the day if you're agency, which to a lot of agency owners sounds like impossible to them with what they're dealing with. I think a couple of things we touch on today relate to how you've done that, right? Like, if client turn is low talent, you know, good day player talent, employee turn is low, right? Anything else you would share for someone that like wants to get out of the day, like what other steps to take? I think owners have a very like, like sometimes rational, sometimes irrational sear of like everything will fall apart with without me. Yes. If you want to try like a little test to see like where the team is at, you could always just take like say like a like a five deviation, right? Like one week and just give your phone number to one person and be like, look, I'm not going to check email. I'm not going to check Slack. I'm not going to check teams. I'm not going to check anything. If there's a true emergency, you can call me and I'll be back online. That'll actually do a couple of things. Number one, your team I pleasantly surprise you and be like, you know, everything's fine without you. In which case, it's all in your head. Number two, problems occurred, but the team was able to step up and figure them out in your absence, which is actually a learning opportunity for them. And you're depriving them of that learning opportunity because your old was on. Number three, is that you were right and it all falls apart without you in which case you're getting called. But then you're just getting called. So it's not so bad, right? So it's not going to like fall fall apart kind of thing. But to your point, AJ, like, yeah, I mean, if you have really good people, if you have really good systems, if you have really good like middle management training and systems, like that's really the core of it. And then enable like having a standardized system where you're educating your internal team on like how to deliver against client expectations. That is really what matters. And like, I'll leave you with this. The best agencies, the ones that are growing fast at a high margin that are big are training their teams anywhere between one and two hours per week, every single person. This can be broken out into like separate departments. It could be like a team-wide training, whatever it is. And they're training people on like tactics, like how to deliver against what they deliver against, how to get better results, how to treat clients, communication skills, which is management and leadership, like they're training their teams constantly. I don't know about you, but like, I don't know how many hours like a winning NBA championship team has practiced in their lifetime. But I'm sure that it's like multiple tens of thousands of hours of practice versus game time. In business for some reason, we always like have this analogy of like a championship team. And it's like championship teams practice about 10 times more than they actually play the game. Business is one of the only places where you're playing the game, 99% of the time. And if you're lucky, you get 1% practice time, 1% learning time. So I mean, like even if you think about it that way, an hour or two a week is not that much. But if you do an hour or two per week, like let's call it even an hour, that's 52 hours of training a year. I assure you that a lot of your competitors are training their staff less than five hours a year. And if you're training your staff 10 times more than your competitor, you tell me what the result of that is going to be because I think it's kind of self-evident. I love that. I think it's a great note to end on. And yeah, I mean, we can all find an hour or two a week, right? Like that's really not not even asking. I swear to god, it doesn't just be you. It could be like a top performer in one aspect. They can be the trainer for the week. So you can tap into other people. So it doesn't have to be all in one person. Yeah, for sure. Or you can bring it outside consultants and other people to help out, right? And lighting the lidocly. Love it, man. We'll do it. We'll really appreciate your time and you to be so generous of sharing all of your insights. This was super, super valuable. Where can people find you if they want to connect or even work with you for some fractional CO help to help clean up their agency? Agency acquisition is taught I/O. And I'm going to be leaving behind some free giveaways for people. So I'm going to leave behind a master dash We're in a list of KPIs if you're curious about like, what are the numbers that I measure my teams against? Like I'm just going to like leave them behind here as well as the master dashboard that I use day in day out. I've used it in multiple agencies that have acquired sold, et cetera. It's never let me down. It's pretty simple to use. I'll leave that link behind as well. Sweet. Sounds good. We'll look it below for everyone. And yeah, thanks again, Nick. Hey, if you enjoyed this episode, please give us a review on iTunes or Spotify or wherever you're listening. Tell us what you think. It really motivates us a lot to make more episodes and helps us out a ton with getting the show out there. Now, if you're trying to grow and get more clients and you like me and my team to help you come up with a personalized growth strategy for your agency, we can help head over to revenueboost.net/contact and you can book a growth call with my team. This will be a one-on-one call and we'll show you what's working right now when it comes to generating leads, booking calls, and acquiring clients at scale. And you can learn about our programs where we can work with you to help your agency scale and get you more dream clients. Again, head over to revenueboost.net/contact and see you on the next episode.