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Small PR and marketing agencies may be feeling a disproportionate share of the hurt right now as the Covid-19 crisis ravages the global economy, but there are inherent advantages to being small that will help in recovery.
Chip and Gini spend this episode talking about the small agency advantage and the steps needed to survive the immediate challenge and come out stronger on the other side.
Transcript
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CHIP: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin,
GINI: and I’m Gini Dietrich.
CHIP: And these are disruptive times we have lots of small agencies that are listening. And so, you know, we thought we talked about what it’s like to be a small agency right now and in particular, how you can use the fact that you’re small to your advantage. With everything that’s going on, you may sit there and say, Wow, what do you mean this is, this is not an advantage. But I think there are some real advantages to being small in this environment as opposed to one of the larger agencies with lots of overhead, lots of infrastructure, I think the smaller you are, the more nimble you can be. So that will be the subject of today’s episode.
GINI: I like it and as a small agency, I can speak from experience that that has gotten smaller.
CHIP: Unfortunately, many small agencies have gotten smaller. A very small number of held steady and an even smaller number have actually grown just slightly but I think those that growth will be short lived. Because the you know, at some point, even if you’re in crisis, or some of the sectors that are doing particularly well, right now, I think you will see, the overall economic contraction will have its impact. Yeah. Anyway. But the, you know, I think that the advantage that a lot of small agencies have is that they are, they do have the flexibility because they don’t have the same cost structure that larger agencies have. And so, you know, on the one hand, that means you don’t have tons of bodies that you can lay off to save money, right. So, you know, and so far, particularly here in the United States, we’ve seen a lot of government aid coming in. And so that is, has slowed down the layoffs that I think would otherwise be taking place. You know, there’s particularly with the incentives that some of the stimulus has for businesses to keep employees on sort of the loan forgiveness, yeah. But I, you know, but nevertheless, you know, the larger agencies You know, from what I’m hearing, you’re probably going to have some pretty substantial layoffs in the not too distant future because they just have to I mean, they, you know, they’re, they’re losing 10s of millions of dollars in business right now. And it’s, you know, that’s much harder to deal with, in aggregate than it is for a small agency, even a small agency that’s losing, say, 50% of revenue, you still have more room to maneuver with your 50% loss, then, you know, 1000 person agency who was, you know, 40 or 50%?
GINI: Sure, yeah. I mean, it’s, somebody said to me, You know, I’ve lost 50% of my revenue, but at least it’s not as much as you and I was like, 50% is 50%. Like, half is halfway. It doesn’t matter if it’s large numbers or small numbers, but I do agree that when with a larger agency, it proves more challenging because the overhead is gigantic. Something that you said that has stuck in my brain. I think it was during the you know, don’t don’t forget to do new business development during this time episode. But you said, No, I lost my train of thought.
CHIP: That’s how things are these days at all. We all lose our train of thought more often than we would like to. And I do in fairness, I do say so many brilliant things that
GINI: Oh, no. Okay, as that gets back talking.
You talked about how important it is not just to stick to process and to be flexible in pricing and those kinds of things. And I think it’s small agency has the ability to do that, versus a larger agency where a larger agency has to stick with their process and the things that make the money because that’s how it works. But, you know, for somebody like us, and this is the advice I’m giving to our clients as well, which is, hey, listen, we typically would tell a prospect that we don’t just do Media Relations, we we just don’t, but in this time right now, we might, right? I mean, because it’s going to generate some revenue and cashes what you need to be focused on right now is what can you do to generate cash without, you know, over servicing and burning yourself out and all those things, of course, But that has really stuck with me. And I thought it was really poignant in this this right at this moment where you can think about what kinds of things can you do? Can you package things differently? Can you charge differently? Can you unbundle your process so that you can charge for separate things like that? So think about that kind of stuff.
CHIP: Yeah, and it is, as a small agency, you’ve got a few advantages here. You know, we’ve talked about the cost structure, but you’re also you don’t have a ton of decision makers who are involved right now, you know, typically, in a small agency, you’ve got one owner, maybe you’ve got a couple of partners, and those people are, you know, you’re not just running your business, you’re on the front lines, you’re servicing clients and that sort of thing. Whereas larger agencies, you’ve got a whole executive leadership team, you may be being owned by a holding company, a whole lot more that goes into it. So making a decision to get rid of minimums or you know, change, what kinds of services you will offer, or, you know, just it just being incredibly flexible. So much easier when you have that centralized leadership structure as opposed to a much more unwieldy bureaucratic approach.
GINI: And I would also say, and I, I did the Spin Sucks podcast episode on this as well, but there’s thinking about the ways that you can do this. And one of the things that I, I truly believe, and I think we’ve talked about this as well, is being as helpful as you can be in this kind of time. Because when you’re helpful, it creates a long term relationship. And when that when that happens, you know, like, for instance, I have a client who does search engine marketing. And he has created webinars to teach clients and prospects how to do Google AdWords. And it’s gotten he was fearful of doing it because he was afraid that his clients would be like, oh, okay, we don’t know you when in fact, it’s done the opposite where they’ve gone. Oh, my gosh, I had no idea this much went into it. I can’t handle this on my own. And he’s, he’s actually been able to grow his business because of that. So thinking about ways that you can be helpful at the same time. I’m giving away sort of your secret sauce or your intellectual property. And because that will allow people to see you in a different light,
CHIP: right. And I’ve said this on the show before, and I say it all the time and in other settings as well, you know, just giving away how you do things or you know, your approach, that that that’s not going to cost you business as an agency, or, or as a consultant to agencies or whatever. Because ultimately people want the direct interaction, they want the direct support that they get from their agency. So, you know, I think that finding ways to help educate people in these times can be helpful, as we’ve talked about before you learn a lot by teaching. Yep. So you know, merely putting it together and thinking it through and describing it, you know, through a webinar or workshop that you might be doing for clients, even if it’s for free. You’re going to be you will help perfect your own approach and your own processes.
GINI: Yeah, I love that. I mean, as you know, I’m a big proponent of it. So anything that you can do to be helpful I always use This example but I’m sure you don’t remember this. But a few years ago, McDonald’s did a one, one of their chefs did a video on how to make their secret sauce at home. And right after that Wendy’s came out with a burger that was two all beef patties special sauce, lettuce, cheese, pickles, onions on a sesame seed bun, and it bombed. Because it’s not McDonald’s. It’s windy. So I use as an example to say you can give away the recipe but nobody’s going to execute it like you do no one, right. And that’s what the real secret sauces is in how you execute in how you service in the team chemistry. All the things that make up your agency. That’s the real secret sauce. Right? Don’t be afraid to be helpful in times like this, that where it can and will lead to business.
CHIP: Yeah, and look as someone who’s small, you have a lot more ways to experiment with things. Sure. Well, yeah, and see what works. So you know, we’ve we’ve talked about some of those things, you know, maybe get rid of minimums experiment with different ways to package up your services. But you know, really, you know, nothing should be off the table as far as how you think about approaching things. And that should be everything from the service offerings to how you use your team, how you’re using freelancers, how you not just price but your terms. Here, one of the things that I’ve been doing, for example, with some folks that I’m working with on a coaching basis is saying, look, you know, we will start your formal coaching engagement a month from now, but we’ll do the kickoff meeting now. So you don’t have to pay now, we’ll still have the initial kickoff conversations, but you know, that the actual, you know, revenue doesn’t come out of your pocket till later. it you know, it’s, it’s sort of that middle ground. And so I’m putting relatively little of my time at risk through kickoff calls. But at the same time, it allows the relationship to start moving forward. And I think a lot of agencies can work with clients on similarly creative approaches, you know, stretching out payment terms, doing you know, some work now. That’s preparatory to a bigger project down the road, just, you know, so. And when you’re small, you can try all these things, and you have a much better sense as to what you’re putting at risk than a large agency where you’ve got, you know, 20 person teams and, and your, your level of creativity is going to be constrained.
GINI: You know, I was I told you this before we started recording, but one of our largest clients asked to pause the retainer for a couple of months. And he said, Can we pay as we go? And I joked, I was like, yeah, of course, it’ll cost you more but and he laughed, and I mean, so I think there are opportunities that you have like that, where you can go from retainer to project or to hourly as well, just in this time to be able to still help your clients but maybe not have the predictable cash flow, I would call it.
CHIP: And you know, the other thing to look at is your overall pricing. You know that a lot of us have prided ourselves on having premium pricing and things Like that, but you’re now now’s now’s the time where you might want to tinker with that a little bit. You know, there is such a thing as supply and demand still. In fact, I was asked, I was doing a Twitter chat for solo PR pro and, you know, one of the topics was, you know, should we reduce pricing now, and a lot of folks are saying no, don’t you know, don’t you got to keep you got to maintain your threshold, but at the same time that you know, there are a lot more people who are going to be out in the marketplace right now. And so, you know, you should be looking at, you know, do you make some adjustments to your hourly rates? Do you make some adjustments to your project rates and yeah, I’m not saying that you should underprice it and you know, put it at a place where you can’t run your business properly where you can’t make the kind of living that you need to but you do need to be realistic here. And just as you know, home prices may come down and you know, hotels charge less when there’s more. You know, the same thing is true here and right ugly, a lot of businesses laying off Marketing and Communications people do There’s a lot more talent out there fighting for the same. Yeah, pool of business. So you know, you have to factor price into it.
GINI: Yeah. And I mean, I absolutely agree, don’t undercut yourself. And the other thing I would add is, I am a big proponent of not giving away your time for free the Can I pick your brain meetings drive me crazy. But I think that this is a time to not ignore that kind of stuff, because and I know that you and I fundamentally disagree on that. But I think you’re right, in this time that you should, you should take those meetings and you should let people pick your brain for free because that kind of stuff will lead to something. It might not be huge, but it might be cash.
CHIP: Right? Well, and I think the you know, one of the keys to that is to make sure that you don’t waste your idle time right now. Right. So, you know, if you shut a lot of business, you know, there is and I’m just as guilty as anybody else, you know, there is a tendency right now just kind of walk around, you know, your head hanging down and say, God, you know more bat more Bad news on business more, you know, watching CNN and more bad news on the health front, you know, it’s frustrating, you know, and, and, yes, you have to leave time for that. But you also have to push through it. And particularly if you are a small business owner, if you have your own small agency, you need to find ways to take advantage of that found time. And that may be having pick your brain conversations, it may be doing some research and other service offerings. It may be trying some things to market your own business that you can then repurpose and sell.
GINI: Yeah, absolutely. No, I am a fan of that.
CHIP: Absolutely. And a lot of a lot of what you may be doing to help your clients may indirectly help you because it may give you ideas. I mean, I Sir, I know that right now a lot of my clients are asking for help on how do they market their businesses, how do they pivot? And as I’m thinking about those things for them, it’s also giving me ideas as to things that I can do, you can do because you know like everybody else I’ve taken hit on my business and so you know, trying to make sure that you’re maximizing the benefits you have out of your hours available. is very important. And again, as a small agency, you get way more bang for your buck way than a large agency.
GINI: Yeah. And I think this is the time to be flexible and nimble and react to the opportunities that are in front of you. Because there there are opportunities. This is hard. It’s rough, but you if you, if you sort of pick yourself up, and as I say, put your big girl pants on, you’ll see the opportunities.
CHIP: Absolutely. And look at as a small agency, it takes a lot less to make a difference. So sure, you know, a five or $10,000 a month client for a small agency is a much bigger deal than it is for an Edelman. If you’re not 100,000 a month, that’s probably not that interesting. Yep. From an overall business perspective. So, you know, you it’s, it looks daunting, and when you look at things on a percentage terms, it is daunting, but there are many more ways to push forward.
GINI: As a small agency. We are very well positioned right now. So take advantage. Take advantage.
CHIP: Absolutely. And when all else fails, you can tap into your junior workers, your unpaid interns. And for those of you listening along, there are some beautiful tunes coming along here, I’m
GINI: trying
CHIP: Jenny’s support staff. So it’s no, you’re just so you’re still working. You’re not hearing things. It is real. I’m not sure. Is this? Is this like PBS Genie? Or is this
GINI: this is the frozen two soundtrack that is being played on Alexa right now.
CHIP: Excellent. Well, we will not admit that because we probably have to pay some royalty or some background because it’s in the background. But if anybody from the copyright compliance offices are listening, you know, you can’t really hear what’s being said.
GINI: This is our lives right now. Yes, but
CHIP: you know, look it but and this is this is the other point that I would make is that as a small agency, you’re having these conversations with your clients. You’re having these really human moments like, we are Having right now. And as as awkward as they are, it gives you a chance to connect with your clients and prospects even more than you would otherwise. I mean, I have to tell you that the business development conversations that I have had in recent weeks have been that they’ve been longer, deeper and more revealing than any that I’ve had in the last year and a half. Yeah. And so you really need to take advantage of that. And again, because you’re as the the owner or leader of a small agency, you are on the front lines you are, you are right there. And so you can relate at a deeper level with your clients and prospects. So you need to take advantage of that. It may not, you know, produce the revenue you need today, but it’s it’s going to pay off
GINI: it well. Yeah. Yep. It always does. Totally agree.
CHIP: And with that, hopefully we’ve given folks a few ideas that will pay off and entertain them a little with whatever human aspect we have on this show. Yeah. With that, we’re going to draw this episode to a close before we go too far off the rails. I’m Chip Griffin,
GINI: and I’m Gini Dietrich
CHIP: and it depends
