Tag: growth

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Why Employee Turnover Can Be a Gift for Boutique Professional Service Firms

Why Employee Turnover Can Be a Gift for Boutique Professional Service Firms

In the ever-evolving landscape of boutique professional service firms, the notion of employee turnover often comes shrouded in negative connotations. However, as a founder, it’s crucial to adopt a perspective that sees turnover not just as an inevitable part of the business cycle, but as a potential catalyst for growth and rejuvenation. This blog post explores why embracing employee turnover can be a strategic move for your firm.

The Refreshing Wave of New Perspectives

Embracing Change

Every exit of an employee opens a door to new perspectives. Fresh talent brings with it updated skills, innovative ideas, and diverse experiences that can inject new life into stagnant processes. In the boutique professional service industry, where adaptability and innovation are key, this influx of fresh blood can be the difference between remaining relevant or becoming obsolete.

An Example: Reinvigorating Strategy

Consider a boutique consulting firm that recently experienced a wave of turnover. The new hires brought in a fresh set of eyes and proposed cutting-edge solutions that hadn’t been considered previously, leading to a significant increase in client satisfaction and business growth.

The Hidden Cost of Complacency

Long Tenure vs. Stagnation

While long-tenured employees are often seen as the backbone of a firm, there’s a hidden danger in complacency. Founders need to be vigilant about employees who might be ‘phoning it in’, lacking the drive and hunger that’s essential in a dynamic professional environment. Their disengagement can be more detrimental than the disruption caused by employee turnover. And, at times, work from home can mean working part time, especially for long tenured employees who feel entitled.

An Example: The Complacent Veteran

Imagine a senior employee who hasn’t updated their skills or brought any innovative ideas to the table in years. Their comfort with the status quo could subtly impede the firm’s ability to grow and scale.

The Opportunity for Cultural Rejuvenation

Building a Dynamic Culture

Turnover offers a unique opportunity to reassess and realign your firm’s culture. It allows for a cultural reset where new values and behaviors that align with the firm’s vision can be instilled. Fresh hires can act as catalysts, bringing energy and enthusiasm that reinvigorates the entire team. This is especially true for older lifestyle firms who have recently decided to become more than a lifestyle firm. Turning over legacy employees in the lifestyle firm is, at times, a requirement.

An Example: The Fresh Culture Effect

A boutique firm that embraced turnover saw a marked improvement in its work culture. New employees introduced more collaborative and innovative work practices, which were quickly adopted by the existing team, leading to enhanced team dynamics and productivity.

Strategic Talent Management

Quality over Longevity

In the world of professional services, the quality of your team is your biggest asset. It’s crucial to focus on attracting and retaining talent that is not only skilled but also hungry for success. Employee turnover, in this regard, can be an effective filter, ensuring that your team remains high-caliber and dedicated. This is why the firms that have reached scale have adopted the up-or-out pyramid organizational structure. In this model, employees need to develop and move up or get out of the way for the next generation.

An Example: The Right Fit

A recent example from a boutique financial advisory firm demonstrates this. They used turnover as an opportunity to realign their talent with their strategic goals, leading to better client relationships and improved financial performance. This fractional CFO firm decided they were going up market, serving middle market, private equity backed software firms. This required them to leave their core market, the small business owner. And, as you can imagine, new talent was required.

Reinforcing the Growth Mindset

Embracing a Learning Environment

Turnover can foster a culture of continuous learning and improvement. New employees often seek growth and development, which can inspire the entire team to adopt a growth mindset. This approach is invaluable in the professional services sector, where staying ahead of industry trends is crucial.

An Example: Growth Through Diversity

A boutique marketing firm capitalized on turnover by hiring individuals from diverse professional backgrounds instead of industry retreads, leading to innovative marketing strategies that significantly boosted their client engagement.

Conclusion
Employee turnover in boutique professional service firms should not be viewed through a lens of loss but as an opportunity for growth, innovation, and cultural rejuvenation. While the departure of employees can be challenging, it opens up avenues for fresh talent and ideas that can drive your firm forward.

Call to Action
If you’re a founder looking to strategically navigate the complexities of running a boutique professional service firm, consider joining Collective 54. Our community offers a wealth of knowledge, resources, and a network of like-minded professionals who can help you turn challenges like employee turnover into opportunities for growth. Apply for membership today and start transforming the way you see your business and its team.

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How to Use Brand Building to Gain an Unfair Advantage in Your Niche

How to Use Brand Building to Gain an Unfair Advantage in Your Niche

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One of the challenges niche professional services firms often struggle with is awareness. Branding can help you raise awareness for your firm. But should it be a priority? And how should you go about it?

Join us as we unravel 4 types of brands you should care about and how they can impact your professional services firm. We’ll also share examples, explore key opportunities, and highlight reasons you may not need to worry about branding.

In this video, you’ll learn:

    • 4 types of brands you should care about
    • How to use each type of branding to raise awareness
    • When branding should become a priority for growth
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Episode 137 – How a Fast Growth Service Firm Formalized Goal Setting to Get Focused – Member Case by Jason Mills

A strategy defines who you serve, what you do, how you do it, and how you do it differently. And a strategy begins with a clear set of goals. In this session, learn how a boutique adopted a formal goal setting methodology, called OKRs, to get focused on what matters most.

TRANSCRIPT

Greg Alexander [00:00:10] Welcome to the Pro Serv podcast, a podcast for leaders of thriving boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community focused entirely on the unique needs of the boutique processor firm. My name is Greg Alexander. I’m the founder and today I’ll be your host. And in this episode we’re going to talk about a popular management methodology, goal setting methodology called Okay Hours. And the reason why I’m going to talk about this is several of our members are attempting to implement them and we’re learning a lot and we want to share some of those learnings. And if you’re not using OKRs, you might be using something similar, such as the boutique framework from collective 54 or iOS or scaling up. There’s a lot of kind of techniques out there and it’s important to have one. Today we’re going to talk about OKRs and we’ve got a role model with us. It’s a member of Collective 54 from a company called Tribal Scale. His name is Jason Mills. Jason, it’s good to see you. Thanks for being here. And please introduce yourself and your firm. 

Jason Mills [00:01:25] Thanks, Greg. My name is Jason Mills. I had engineering a tribal scale. We’re a boutique services firm specializing in platform and software development, using extreme programing, which is essentially test driven development coupled with peer programing. We also use this to provide a unique approach to digital transformation. 

Greg Alexander [00:01:45] Very good. So let’s start with the basics. What is your definition of OKRs? 

Jason Mills [00:01:53] So Oscars are basically, I guess, essentially company goals. The acronym ACRONYM stands for Objectives and key results. The objective portion be more of a loosely defined company goal and the key results, more of the how to get there. So yeah, but it’s kind of like a quick overview. 

Greg Alexander [00:02:15] Yeah. And for those that might be interested, they really became famous when John Daw introduced them to Google back in the late nineties. And many in the tech world, such as tribal scale, you know, have embraced them as a result and to much great success. So, Jason, now we understand what they are. Let me ask you, why did you and your firm start using them? 

Jason Mills [00:02:40] So we’ve we’ve done goal setting exercises for several years to drive personal growth and company initiatives. But in the past, it was really just the manager collaborating with the with a report. And we came to the realization that, yeah, it’s great if someone wants to get a certification to support their growth, but what if that doesn’t align with the company’s goals? So what can we do to eliminate this gap? And as we as we look to really align the company vision in the organization, OKRs became the model to try out for us. 

Greg Alexander [00:03:15] Okay, great. And when did you begin your. Okay, our implementation. 

Jason Mills [00:03:21] So we started end of last year really trying to get the framework in place and for preparation to really launch this in Q1 of this year. So we are about two quarters in almost at the end of the second quarter right now and definitely iterated a little bit on the process. But that’s that’s where we are at this point. 

Greg Alexander [00:03:43] Which is great. I mean, we caught you at exactly the right time. If you already had everything fully baked, the the conversation wouldn’t be as fruitful because I think there’s many that are in the middle of an implementation. So to hear your your story is going to be helpful to them. So tell us a little bit about, you know, what the journey has been so far. You know, how are you using them, What’s gone well, what hasn’t gone well, etc.? 

Jason Mills [00:04:06] Yeah, sure. So we’ve gone ahead and we created for essentially for company OKRs to help line the teams. The first one was lined with white glove service. That was like an example of one of the ones we use trying to provide that ten X value to our clients. The second was service offerings kind of like complements the first OKRs, and the third was thought leadership in the form of content generation through blogs. Speaking of speaking out on podcasts or attending meetups, and the fourth one was meaningful bench work. So we were in a situation last year where a lot of times people were on bench and we wanted to make sure that it aligned with its valuable time. We wanted to make sure aligned with like with what would benefit our clients and our business the best. So those were some of the the OKRs we choose to use. And then each department really gets their own. They can add a couple of extra OKRs if they like, based on what the department needs might be. 

Greg Alexander [00:05:13] Okay, so let’s double click into into one of them and I’m going to choose meaningful bench work because I think that’s a rich topic for our audience. You know, most of our members, sometimes they’re a little lumpy in their businesses and they can find, you know, talented people on the bench for a period of time. And then unfortunately, sometimes it goes the other way your 120% capacity and everyone’s burning the midnight oil. So so what is some examples of meaningful bench work? 

Jason Mills [00:05:42] So a lot of times like the default for us just was like, okay, we’re gonna we’re going to certification certifications always help our, you know, our company in regards to Azure or things like that. But we took it a step further and we we said, you know, whatever we’re working on, it should benefit either a client that we’re going to have in the future or a client that we have currently. And we took it a step further and said, you know, how do we know we’re succeeding in this? So we put together like a metric saying that, you know, we want to we want to use whatever knowledge they’ve gained within two months of of learning it. And that’s how we know if we succeeded with that. So so that’s an example. 

Greg Alexander [00:06:27] That is a great example. So you want to use whatever you learned within two months. I can’t help myself. Two months is a very precise number. How did you pick that? 

Jason Mills [00:06:39] Oh, I it’s like it felt right. Okay. It seems like, you know, when you’re when there’s a little bit of leeway before the next client starts up, it seems like a good amount of time to prep before you actually get deep into the project. So that’s just landed there. 

Greg Alexander [00:06:58] Yeah. Okay. Well, that makes sense. All right. And you know, at the top, I mentioned that OKRs is there’s other similar systems. A lot of our members use iOS. Some use scaling up, some use the boutique. I mean, there’s a lot of them out there. And I advocate for everyone. To me, there’s not a ton of difference between them. The important thing is to have one and be committed to it and implement it. Right? So. So was there any reason why you picked OKRs over the alternatives? 

Jason Mills [00:07:27] Well, they you know, they were naturally a good starting place if you haven’t done organizational goals before. There they were from what we the research we did, they were loose, flexible to change, interpreted in different ways which which, you know, some might think that’s not you you want to make sure they’re not interpreting the phrase, but it actually allows to generate some creativity among the teams to solve different problems. And they’re not tied to compensation, which alleviate some of the pressure as well. So they were basically very forgiving if we screw this up, which we were going to screw it up. Yeah. So anyway, U.S. has its value, too, but I know that’s more of an operating system. And now that we’re two quarters in, we’re actually experimenting a bit, but laying us on top of that to kind of like help us drive and execute a lot of the a lot of the things we want to do. 

Greg Alexander [00:08:19] So that’s fantastic. So the reasons why you chose it, one of the reasons anyways, was the flexibility. And since this was the first attempt at this, that was obviously valuable, I also, I did not know that OKRs were divorced from compensation. So that’s a valuable add right there and I can see the benefits of that. Some might argue against that, but I can see if you’re early in this process that that might make it more, I guess, less stress in getting it implemented and maybe less of a shock to the system. So that’s interesting. Okay. And then in terms of the six months that you’ve been at it, you know, if you were to do it over again right now, if you had a clean sheet of paper, is there any any gotchas, any failures that happened along the way that you wish you would have known? 

Jason Mills [00:09:06] I think overall it went pretty well. We implemented this using just basic spreadsheets. Seems I think you can kind of run the world on spreadsheets and and just set up the spreadsheets, you know, kind of like doing weekly check ins, whether our our OKRs were on track, off track, or if they were done. Kind of provides that simple, simple implementation as we get into it. I think one of the challenges for the engineering team in a lot of times engineering is that one of the larger sizes is that multiple parking levels. So not having that visibility into, you know, what are the managers, the managers, you know, kind of trying to deliver. So are we all in one bucket of thought leadership and no one’s putting any any knowledge into or any time into white glove service. So that was a challenge that, you know, we are kind of working through and evolving on. Hmm. 

Greg Alexander [00:10:03] And what what are your early hypotheses as to how you might overcome that challenge? 

Jason Mills [00:10:09] So we had, I would say like long term, maybe just finding like a tool that can kind of work through and manage it and provide that hierarchal visibility. When I was working at a former Life, I built performance management systems and, you know, clients created goals from very simple to very complicated scorecards, you know, tracking metrics on time and dollar delivery. But end of the day, they all wanted to see a one page dashboard with visibility all the way down the line. So right now we are using a tool that actually integrates with our Google calendar and allows us to kind of tag each meeting that everyone has with an Oscar. And that month we can see how much time was spent across the organization and on the on the specific. Okay. So it kind of provides that visibility to Head Start, right? 

Greg Alexander [00:11:04] Yeah, very cool. Any other, you know, tools that you all leveraged or, you know, quick hacks that people might take advantage of when you got going on this? 

Jason Mills [00:11:15] And we’re we’re piloting a couple of different things, like from the iOS standpoint. There’s there’s a couple different tools that just manage that whole process. So it’s like we’re using 90 right now, which is something that we’re that we’re trying out, which is a good. 

Greg Alexander [00:11:33] Thing about like learning tools around OKRs. Were there any books that you read, any videos you watched, anything like that that you can recall that jump to mind that were particularly helpful? 

Jason Mills [00:11:43] Yeah, there were some there’s a lot of great information on some websites. Definitely read the book Traction, which was a good one on iOS, trying to think of some other ones that come to mind, but those are kind of amazing. 

Greg Alexander [00:11:57] Okay, Got it. And then my last question before we wrap up is, you know, the implementation of OKRs. Is there one person who kind of owns the the whole thing or is it distributed? You know, who’s in charge on it? 

Jason Mills [00:12:11] Yeah. So the for us we have the our chief of staff and she owns the process, kind of like owns the master spreadsheet. And then we have the department leads that kind of like manage the okay for each department, everything kind of rolls up, and that’s kind of a bogey structure. 

Greg Alexander [00:12:28] Got it. Very good. Okay, Well, so for the listeners that are members, let me draw your attention to making sure you accept the meeting invite that will come out here shortly with Jason Mill’s name on it from tribal school. And if you attend that member only private Q&A session on Friday, which is when we have a role model sessions, you can double click on any of these items and ask your questions directly of Jason. So I encourage you to do that. If you’re not a member and you think you might want to consider it, go to collective 54 dot com. You can fill out a form and one of our reps will get in contact with you. And if you want to read about other things that we do or the topics we cover. In addition to this, I pointed towards the book The Boutique How to Start the Scale and Sell a professional services firm in a video is your thing on YouTube. We have a channel called Profiting in Professional Services and you can see some videos on that. But Jason, I appreciate you accepting my invitation when I reached out to you and sharing your journey so far. And congratulations on the progress that you’ve made and we learned a lot from you today. So thanks for being here. 

Jason Mills [00:13:35] Great. Thank you, Greg. 

Greg Alexander [00:13:36] All right. Okay. And for the rest of us, you know, I wish you the best of luck as you try to grow, scale and exit your firm in the future. We’ll talk to you on the next episode.

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Episode 136 – Why Podcasting Should be Part of a Professional Service Firms Marketing Mix – Member Case by Tom Schwab

Podcasting is a perfect marketing channel for boutique professional service firms. It allows a firm to authentically connect with its target market at scale cost effectively. Yet, many members are not taking advantage of this tool. This session will teach members how to leverage the podcasting channel to grow their firms.

TRANSCRIPT

Greg Alexander [00:00:10] Welcome to the Pro Serve podcast, the podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused on the unique needs of the boutique process of firm space. My name is Greg Alexander. I’m the founder and I’m going to be your host today. On this episode, we’re going to talk about podcasting and its role that it might play in your marketing mix as you look to grow your firm. And we have a collective 54 member role model with us who’s an expert in this area. His name is Tom Schwab. He’s with Interview Valet Time. It’s good to see you. Please introduce yourself to everybody. 

Tom Schwab [00:01:00] Greg, I am thrilled to be here. You know, I run the agency interview valet. And my my viewpoint is that today every pro serves business problem is obscurity, right? There’s thousands, tens of thousands of people you could help. They just don’t know you exist. And I think instead of breaking through the noise, it’s much more powerful to get in on the conversation that people are already listening to. 

Greg Alexander [00:01:25] All right. So so give us kind of a State of the Union on podcasting. I’m not sure our membership community, you know, has a full appreciation for how prevalent it is, how it’s growing, etc.. 

Tom Schwab [00:01:37] Yeah. And everybody thinks there’s, you know, millions and millions of podcasts. While that’s true, less than 450,000 have gone live in the last 30 days. So there’s always room for great podcasts out there. The other thing is that not everyone is listening to podcasts. If you look at the current data, it says 51% of the U.S. adult population listens to podcasts, right? And they’re above average income. They’re above average education. These are people that are early adopters, that are looking for answers. They’re looking to make their life better right there. There’s still probably a third of the people out there that are so proud They haven’t read a book in since high school. They’re probably not listening to podcasts. Right? The people that are listening to podcasts are looking for answers, looking for ideas. Look at looking for people that can help them. Yeah. 

Greg Alexander [00:02:33] I mean, if half the American adult population is listening to podcasts, I mean, that’s that’s a huge audience. So, I mean, relative to the other forms of media, it’s pretty new, although it is maturing. Why do you think it’s grown so much? 

Tom Schwab [00:02:49] It’s now, what, almost 20 years old, right? So it it’s you know, it’s going to stick around for a while. But I think it’s really because of the intimacy and also the authenticity. Right. We’re so tired of this little, you know, sound world. And while there’s a place for that to really learn, to really understand, something is going to take more of a longer conversation and it’s more authentic. Right? And we look at things that are on television that is highly edited, and we really just sort of want to see what what really happened behind the scenes. And in some ways, almost like a voyeur is a bright. You and I would be having the same conversation if we were sitting at a coffee shop or a bar. Right. The only difference is that there’s microphones and the whole world gets to listen in. 

Greg Alexander [00:03:44] Yeah, it’s really interesting. I like the concept of intimacy because if you think about our audience boutique process firms, I mean, they’re boutiques by design, which means they serve. You know, I like to say the riches are in the niches. So anything that you can do to build a more intimate or authentic relationship with the target audience and the client base is much preferred over maybe kind of mass communication techniques. So. So tell us why, in your opinion, podcasting should be part of the marketing mix specifically for the boutique processor firm? 

Tom Schwab [00:04:14] Yeah, I think it’s really because there’s this idea of you’re one funnel away and I don’t believe that, right. The best things in life don’t come through funnels, They come through conversations and there’s a great book called Clicks and How Digital Marketing is Ruining Your Business. And I love how Bill Troy says Big fish don’t swim through funnels and whales don’t click right. The people that are hiring processor firms aren’t going to hire you because you did a dance on Tik. If anything, that’s a reason for them not to hire you, right? So they want this discussion. They want to know who they are working with. And at the end of the day, none of us need more leads, right? We need more profits. We need profits come through great customers, right? So the idea of going out there and being able to communicate at length is really magnetic marketing, where it will attract the right people and retell the wrong ones. The other. The thing I love about this channel is that it becomes so easy to create and then so easy to reproduce and repurpose. Right. I’ve written a lot of blogs in my life. Most of them feel like homework assignments, right? But we can have this conversation and then take the take the audio and get a transcript, have somebody clean it up and make a blog. We can take video clips from it, audio clips so you can get a month’s worth of content out of one podcast interview. Yeah. So to my my sense, it’s it’s easy to create, it’s inexpensive to create, and it’s so powerful that you can use it in your marketing and even in your sales, right? You can for somebody who gets on a sales call, you can say, Hey, our founder did this interview. Right? And I think it’d be interesting to, you know, how they’re going to listen to 45 minutes of the founder before they even jump on a sales call. That that becomes a warmed up lead. 

Greg Alexander [00:06:10] Yeah, I agree. So there’s there’s two approaches. Should they be done mutually exclusive? Should they be complementary to one another? And the two I’m referring to is sort of collective 54 members start their own podcast or should they seek to be a guest on somebody else’s podcast? What’s your opinion on that? 

Tom Schwab [00:06:29] Well, I’ve always got opinions on everything, but I look at it, it’s like, should you be an Uber driver or an Uber passenger? Right. Say same platform, but what are your goals? Right. If you want to nurture your current clients and your current leads, then host your own podcast. And Greg, this is a great example, right? Because you take this content, we we dig into it each week in the community. Right. So it’s really for people that already know about it or part of it. Well, if you want to go out and find new leads, new customers, you know, if you build it, they will come. Doesn’t work. You really need to tap in where they’re already listening to. So I’d say be a host. If you want to nurture your current leads and customers, be a guest. If you want to go out and get new customers, new leads, new exposure, new backlinks. 

Greg Alexander [00:07:25] Yeah. I mean, so that’s I mean, and I should tell everybody that collective 54 is a client of Tom’s, and we do both. I mean, obviously here we are, here we are hosting our own podcast. And you’re right, it’s that is for our members primarily. And we are able to, you know, put role models in front of them through the podcast every week. And our members love that. But when Tom books me as a guest on another show, that’s an audience that doesn’t know who I am and I get exposure, you know, to that group. And then through that they find their way to collective 54. So I think, you know, being a guest on someone else’s show is a great acquisition technique, and hosting your own show is a great retention technique. At least that’s how I see it. I think that’s a good way to frame it. So, Tom, tell the audience a little bit about your services. And I’m giving you permission here not to be modest and humble, but, you know, your expertise is taking people like me and getting them on other people’s shows, which it’s hard to get on other people’s shows. I don’t know how people do it without somebody like you. So why don’t you tell us how it works? 

Tom Schwab [00:08:31] Yeah. So we’ve been doing this for nine years now and we have a team of 30 in Europe and North America and. When we first started out, it was almost like guest blogging, right? My background is inbound marketing and engineering, and I looked at it and said, Well, I guess blogs aren’t working anymore more. Could we? The equivalent of guest blog on podcast. And so we started with that. And Greg, the first three years, we built up the systems, the processes, and I went, I tell people about it. I’d get my elevator pitch and they’d go, What’s the podcast? Well, that changed about 2019, and people started to see the power of those. And so now, now one of our clients said, I love working with you because you let me be the guest and you take care of the rest. And I’m like, Oh, that’s good. Copy were taken that. But we’re working with thought leaders, right? Coaches, consultants, leading brands, not fiction, nonfiction authors to get them out there on the right podcast and really, you know, let them be Sinatra. And we do all the supporting work with that. So not only finding the podcasts, but prepping them for every podcast, giving in the best tools and processes for each podcast, and then also the feedback, right? I’m an engineer by degree, so, you know, in God, we trust everyone else bring data. So we license a whole lot of databases. And I think without that it’s more podcast guessing than podcast guesting, because at the end of the day, nobody comes to us and says, I want to be on a podcast, right? That’s that’s an ego thing. Now there’s always an overarching goal of I want to grow my business. Yeah, being on podcast. So that’s really what we focus on. 

Greg Alexander [00:10:24] Okay, so some of our members and I’d say quite a few are what I would describe as a brilliant domain expert. Whatever their domain is, I don’t know. Maybe they’re, you know, a brilliant creative director in a marketing agency, or maybe they’re an absolute brilliant technologist in cybersecurity or something like that. And that’s is what allowed them to get their firms to the point that they’re at. But they’re they’re not great at sales and marketing and they don’t like it. And they sometimes suffer from what’s known as the imposter syndrome. You know, they maybe don’t recognize how brilliant they really are. So putting themselves out there on a podcast can be very intimidating to that group, which is a shame because the world needs to hear what they have to say. So you mentioned that you coach them and you prep them before they get on a call. So how do you help somebody like that maybe overcome their fear and kind of hold their hand? So it’s a great experience for them. 

Tom Schwab [00:11:25] Yeah. And I think I’m going to correct you there. I think all of them are brilliant, right? They’ve all brilliance in different ways. And one of the phrase you hear me talk about a lot is what’s ordinary to you is amazing to others. Right? So that expertise that you have there that everyone knows that. And there was a friend of mine that actually helped me with this because I started out I had that imposter syndrome. I’m like, I’m not the expert, Right? I don’t think there’s anything as the expert, but there is a expert. And he said, you know, the legal definition of a of an expert is someone by their training, their education or their experience knows more than the average person. Trust me, as long as hard hours as you put in your business, in the industry, you have expertise there that others don’t have and that your clients are paying you for. And so I think to frame it that way, for people to also work through their one sheet to say these are the topics that you can bring expertise to, let’s focus on these. Right? Nobody’s going to ask you a question. You know, if you’re not in finance, they’re not going to ask you, Well, what do you think about the Fed’s move? I don’t know. That’s not my area of expertise. Yeah, right. So they want to bring you on. They they want to make you look good with that. So I really think it’s focusing that that light on where they can they can add expertise. The other thing is I love it when people come and they’re like, Yeah, I don’t like sales, I don’t like marketing, I don’t like promoting myself. Perfect, right? Because the worst thing to do on a podcast interview is to make it an infomercial. Yeah. And, you know, Rand Fishkin, who wrote the book Lost and Found Her, I love how he put out there. He said the best way to sell something today is not to sell anything, but to earn the respect, awareness and trust of those who might buy. And I would say, you know, on a podcast, it’s those who are ready to buy, right? If they listened to you for 30 or 45 minutes, they’re going to turn you up or turn you off. That’s fine, right? But if you’re the answer to. FRAYER You don’t have to sell them, right? You have to just tell them what you do, how you do it, and it will attract it to it. And, you know, the data shows that we’ve have for nine years that the leads from podcaster interviews tend to close faster for a higher initial engagement and less churn. Yeah, and it sort of makes sense. It’s not cold traffic. It’s it’s a warm referral. Yeah. 

Greg Alexander [00:14:04] I mean, that’s the experience that I’ve had for sure, and that’s why I’m so committed to the podcasting piece of our marketing mix. All right. Well, listen, we’re out of our time here, but for the members that are listening to this, I want to encourage you all to attend the private member only Q&A session, which we’ll have with Tom that will allow you to ask your direct questions to Tom and he’ll answer those. That meeting invite will come out shortly, but look for that and please attend. If you’re not a member and you think you might want to join, go to collective 54 dot com. You can fill out a contact us form and one of our reps will get in contact with you. And if you’re interested in topics like this and you want to learn about other things, I would point you in the direction of our book. It’s called The Boutique How to Start Scale and Sell a Professional Services Firm. But with that, Tom, I mean, I appreciate you and all that you do. Thanks for being a great contributing member to Collective 54. You give a lot as well as take. So thanks for that spirit and thanks for being part of our tribe. 

Tom Schwab [00:15:02] I thank you for putting it all together. It’s such a great community and like I said before, what’s ordinary to you is amazing to others, and there’s just brilliance in there. And when people share that, it’s amazing the magic and synergy that happens. 

Greg Alexander [00:15:17] Okay, great.

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Episode  128 – How to Begin Building a Sales Team with Fractional Sales Talent – Member Case by Dan Morris

Scaling boutiques need to build a sales team yet delay doing so because of the perceived risk and expense. In this session, member Dan Morris shows us how to reduce the risk and ease into it by leveraging fractional sales leadership. Most boutiques use fractional finance, HR, IT, and Legal executives and it may be time for you to deploy the same approach to sales. 

TRANSCRIPT

Greg Alexander [00:00:10] Welcome to the Pro Serv podcast, the podcast for leaders of thriving boutique professional services firms. If you’re not familiar with us, we are Collective 54, and what we are what is known as a mastermind community. And we are different than other communities in that we focus on a single industry, the pro serv industry, and a certain type of firm within that industry, what we call a boutique, which is kind of post-startup at pre-scale. And we have a weekly podcast that we put on where we profile a role model, and that’s what today’s show is about. And we’ll talk on today’s episode about fractional sales leadership and sales teams. But before we do that, let’s do a couple of intros. So my name’s Greg Alexander. I’m the founder of Collective 54, and I’m going to be your host. We also have with us today Dan Morris, and Dan runs one of these fractional sales outsourcing companies. And I’m probably not doing it justice so we’ll give him a chance to introduce himself in his company. So, Dan, it’s good to see you. Please, please give us an intro.

Dan Morris [00:01:22] Hey, Greg. Great to be here. Yeah. My name is Dan Morris. I’m Managing Partner at Mindray, a consulting. We’re a boutique management consulting firm. We focus on growth, efficiency, and in our case, what that means is we support our clients by helping them to develop effective growth strategies. And then when it’s required, we implement those strategies by leveraging fractional executives and fractional teams.

Greg Alexander [00:01:47] Okay, sounds great. So because you are a member, you’re familiar with our membership, the profile of a member and many of our boutiques know that in order to reach their full potential, they have to make an investment in sales. They get to a point in their journey where, you know, referral generation and kind of word of mouth is not enough. They have to invest in convincing people to hire their firms. And those folks of those folks, many of them don’t know who they are, but they’re gun shy to make the investment in this nonbillable asset. So they’re curious about fractional sales leadership. So let’s start there. So define it for us. What is it?

Dan Morris [00:02:30] Fractional leader. Or in our case, specifically a fractional sales leader, a highly experienced individual normally north of 15 years of experience. They bill and they run sales teams and sales organizations before in the industry using the business model that the clients have. So they’re very familiar with both the industry jargon and the ways of doing the types of deals that the client is doing. That means that they’ve committed themselves to share their experience with multiple clients who are non-competing at the same time, which means that they can give the client access to their experience at less than the full rate for bringing that person in. And their scope could be from carrying a bag themselves to actually help win a couple of deals to help refine the process before they’re then able to start bringing people in around them and building out that commercial sales team. And they can look at new business, they can look at upsell and cross-sell to the existing client portfolio, as well as exploring potential for partnerships and channel business as well, depending on the opportunity. And so their engagements would range from supporting a founder who needs some help building their confidence to get some complex deals done all the way out. So implementing and managing a commercial sales team and developing an in-house leader. So it runs a very broad scope, but it’s about role and then walk and then run in order to get things right. You might go from one fractional leader to another. Well, in the next stage and all the while not investing the full amount that you’d have to invest for a full person to be full-time.

Greg Alexander [00:04:28] Very good. And I’m assuming that there’s a natural point in a firm’s evolution where it makes sense to engage in this model. When is that point?

Dan Morris [00:04:41] Though there’s two points that we most often get hired, and one is where you’ve got a CEO that does not identify as a salesperson who is committed to figuring out how to grow in a scale. They’ve got some initial clients and often that’s somewhere between $1,000,000 and $3 million in top-line revenue. The second use case is where they brought in a fractional CFO or even a full-time CFO, and that person has somehow inherited the responsibility for driving revenues and reporting on revenue growth. And they bring in a fractional because they need to be able to deliver in that period of time.

Greg Alexander [00:05:26] Okay. And then is there a point in time when they graduate out, you know, above this approach where fractional is no longer enough and they want full time? Is that a natural evolution or no?

Dan Morris [00:05:38] Yes, it is. So we’ve actually built a whole service offering review, refine, roll out, and then replace. And in between roll out and replace is a lot of repeat will go round that cycle several times to get an organization to where they want to be. And it might be three months and it might be three years to get them to the place where they want to replace most often. And then a fractional person would develop somebody from internally within the team to take over and lead that team using all of the best practices and processes that have been developed in that business.

Greg Alexander [00:06:16] Okay. And then as I’ve gotten to know you, I’ve learned that it’s not just leadership that can be fractionalized, but it can be a sales team as well. So please describe that to us.

Dan Morris [00:06:27] That’s right. So we’ve developed over we’ve done over 300 advisory and engagements with clients now since 2014. So we’ve been around this for a while, since before it was called fractional. And so recently we’ve been developing more and more things around the clients the way that they want them. And so we were doing business just with sales leaders, revenue leaders and supporting a lot of founders. We found that there are really natural partnerships with other people in the fractional ecosystem, such as Chief Finance Officers or Chief Operations Officers but within our pillar which is revenue, we are able to provide the sales leader, the marketing leader, the revenue operations leader, which is the sales and marketing technology implementation and process management and actually a turnkey sales team to get a client from where they are to where they want to be. So having access to that in a very flexible way is what the market told us that they wanted to do. And so we’re supporting more and more businesses to get there until they feel confident enough to bring in the full-time leader and begin to either rebuild that internally or take over some of the resources.

Greg Alexander [00:07:42] So I’m very bullish on this idea because. You as a firm goes through its evolution and they need to make this investment in sales. They’ve reached that point where in order to hit their growth targets, the law of large numbers says they’re not going to get there by kind of shaking the tree of their personal network anymore. They’ve got to do more than that. But sometimes if you go full-time, especially if you hire leadership in a team, they don’t have the capital to do it and they don’t want to go into debt. They don’t want to raise the equity because of the dilutive effects of that. So they end up not doing it. But by doing it this way, they can grow into it because fractionalizing would suggest it’s more cost-effective to do it. So. Why are more firms not doing this? What’s standing in the way of pulling the trigger on this? Because it seems to make such great common sense.

Dan Morris [00:08:35] You’re right. And part of that is that they don’t know that it’s an option. It’s becoming much, much more talked about now. And I think the most common fractional engagement today is still in the finance department because bookkeeping is one of the most natural first things to outsource then the Chief Financial officer involved in a lot of the CPA’s offices around that. And so that’s where it started. And then operations followed because getting things organized in the back of the business affects that profitability very immediately. And then after that, people look at this other pillar, which is a lot scarier to a lot of founders. You know, the reason they haven’t built out the commercial sales team is because they don’t identify as salespeople. They don’t really feel confident in building that sales engine right away. They want to make sure that everything is going to land properly first before they go and get a lot of new clients. And so that we think that there’s definitely a trend in the market right now with people talking about fractional, them becoming feeling more relaxed about bringing in people on that basis. But also there’s a lot of businesses out there that just restructured significantly, right? They leaned out back or W2 based and are now looking to invest in businesses that can give them that level of flexibility. And so there’s been a lot of businesses transitioning to partner with us over that last few months for that reason as well. So one is more education and one is market timing.

Greg Alexander [00:10:05] So for those that are listening to this, that might still be afraid to do it after 300 engagements. I’m sure you’ve seen mistakes. What are maybe two or three things to think about before they jump on this fractional sales leadership concept?

Dan Morris [00:10:20] Well, it’s an experiment until it’s not. Right. So you’re getting on board with somebody who can come in and give you a 5000 or 10,000 foot view of your business in 30 days. That’s the first thing that you’re doing with the fractional executive. Is not like making a higher W-2, where you have to figure out you’re going to give this person a year. You’re going to get the sales number. You’re going to try and work it out. The first 30 days of this is figuring out where the priority should and should not be working with that person. And that’s something that’s very bite-sized that a lot of founders and CEOs don’t think they can do but they can. And so, you know what we see one of the problems is when founders or CEOs try and buy a tactic that they’re not sure about, that we know we should be doing outbound sales. Okay. Well, is that the right thing for you to do first? They haven’t thought that through and they try and buy a vendor who will do that for them and they set fire to a bunch of money. What we often find is that they’re already trying to do too many things with the resources that they’ve got. And in that first 30 days, often we’ve identified businesses. There was one who were trying to do 17 growth strategies with four people on their team.

Greg Alexander [00:11:37] Oh my Lord.

Dan Morris [00:11:38] We help them focus on five of those growth strategies and they 5x that business in the next 12 months. Mm hmm. Do less with more, but the right things. And so a good way of protecting themselves is to get really clear with that front workshop, get the strategies aligned for what they’re going to do, what they’re already good at, and, you know, go with an individual who has less experience as a fractional or may not give them that straight away. And the risk is where a CEO is not familiar with hiring a sales group and brings in an experienced fractional or who just is being a really strong individual contributor. There’s room there for missed expectations, and that’s the biggest risk I think, out there in the world of fractional. Oh, we had this fractional when we tried out and it didn’t work. Yeah, well. There’s a better way. Yeah.

Greg Alexander [00:12:30] What do you say to the member who believes, in my view, incorrectly, but still very strongly held belief that what they do requires so much industry and domain knowledge that outsourcing it to a fractional sales team is just impossible?

Dan Morris [00:12:49] Well, we do run into a lot of business owners and CEOs who struggle with overcoming that, and they come back to us a year later in the same place. They haven’t grown. They’re still stuck there, they’re more upset about it. It’s a natural barrier for us to be overcome with a crawl and then walk and then run approach. And a simple way of looking at this is to say that one day if you want to exit your business, you have to solve this problem anyway. And getting the right support to do that in a fractional basis to help you along the way is one way of doing it. And I’ll give you an example. We’ve been working with a founder on and off for eight years. A super nice guy, really brilliant at what he does, and finally came to us in January and said, okay, let’s look at this a bit differently. And what we helped him to do was a Done with You program, which helped him to do the activities he needed to do to get out of his own way. And now he’s doing massive projects with his ideal clients. Four months later, he’s in that procurement process is where he’s never been before. Now we can show him what the roadmap is to have somebody else do those activities and gently begin to walk him backwards outside of that process so he can focus on the other parts of his business. Just one example, but it’s got to be crawl and then walk and then run with people who are really holding onto that mindset. Otherwise, they just never get down to that.

Greg Alexander [00:14:18] Yeah, you know what I would offer the audience is that, you know, we’re all comfortable now with fractional CFOs. Most of us are using fractional I.T. departments. We might call them something different, like a managed service provider. Pretty much most of our members use some type of outsourced fractional HR Leadership. A growing number of our members are using fractionalized chief technology officers as they attempt to productize their service offering. So I don’t think it’s a stretch to now expand that philosophy into the revenue growth engine, the sales team. And if you take the approach that Dan recommends today, which is the crawl, walk, run approach, it’s actually very little risk. There might even be more risk not doing it than there is to do it. So that’s what I would kind of conclude with. So Dan, we’re really happy that you’re in the group. Our community really needs what you do, so you’re adding a lot of value to us. So on behalf of all the members, thanks for being here today and we look forward to the Q&A session with the members and having them give them an opportunity to talk to you directly about this.

Dan Morris [00:15:22] Thanks, Greg. There’s been enormous value for us being part of this community, and so we’re really happy we’re here as well. And thanks for making the time to talk today.

Greg Alexander [00:15:29] Okay. Very good. All right. A few calls, action for listeners. So first, if you’re not a member of Collective 54 and you want to be, check out the website, Collective54.com and fill out the form. One of our representatives will get in contact with you. If you are a member, be sure to attend the session that we’ll have with Dan, the Q&A session. And if you’re not ready to join just yet, but you like content like this, I would point you in two directions. First. Subscribe to our newsletter that’s Collective 54 insights. You get three things a week, you get a blog, you get a video, you get a chart of the week, or you can check out our book, How to Start I’m sorry, The Boutique: How to Start, Scale, and Sell a Professional Services Firm, which you can get on Amazon. But until next time, I wish you the best of luck. Audience members. And as you try to grow, scale, and someday exit your pro serv firm. Take care.

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Episode  123 – How a Pioneer from the SaaS Era is Jumping on the AI Wave to Re-invent his Firm – Member Case by Jeff Pedowitz

Jeff Pedowitz, CEO of The Pedowitz Group, was one of the pioneers of the SaaS era by driving adoption of marketing automation technology from Eloqua, Marketo and others. This allowed his firm, The Pedowitz Group, to dominate his niche for almost two decades. Now, Jeff sees the next big wave, AI, and he shares with Collective 54 how to ride it all the way to the bank.

TRANSCRIPT

Greg Alexander [00:00:10] Welcome to the ProServe Podcast, a podcast with leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused entirely on the unique needs of ProServe firms. My name is Greg Alexander. I’m the Founder and I’ll be your host today. On this episode, we’re going to talk about A.I. artificial intelligence and its impact, in particular around B2B sales and marketing and overall revenue generation. And we have a fantastic role model today, and his name is Jeff Pedowitz and he’s fantastic for a reason, and are many reasons, I should say. But the one that is relevant to today’s topic is the last time we had a major tech wave was the SaaS wave, and Jeff was a pioneer in that space. He and a very small number of people I believe, can claim attribution for the mass adoption of marketing automation. And having gone through that entire journey all the way from a nascent industry to maturity, which it is today, his perspective is profound, and I think he can take those lessons and apply them to AI because it’s early, early days there, and he maybe more than most, can probably share with us where this might be headed. And what we hope to accomplish today is by listening to that story and applying past lessons to new tech, maybe we can get ahead of the curve, learn to learn a few things, and maybe profit from them. So, Jeff, it’s great to see you. Would you mind introducing yourself and your firm to the broader audience, please?

Jeff Pedowitz [00:01:59] Sure thing. Greg, good to see you too and thank you for having me back. So I own the Pedowitz Group and we are a sales and marketing consulting company. We work with sales and marketing leaders who want to drive more revenue and we specialize in digital channels. And of course, AI is probably the best emerging digital channel we’ve seen in quite some time.

Greg Alexander [00:02:21] Yeah. And I understand that you just did a bunch of homework on a new book that you got coming out in just a couple of weeks. What’s the title of the book?

Jeff Pedowitz [00:02:27] It’s called The AI Revenue Architect. Great.

Greg Alexander [00:02:33] So why don’t you kind of give us the outline of what’s in the book and maybe we can use that as a framework for our talk today?

Jeff Pedowitz [00:02:39] Yeah, absolutely. So. Well, my job, my company’s job is to follow technology because that’s what our customers want us to do, is to implement technology so they can scale their sales and marketing engine. So AI and various components of AI have been around for several years now. It’s just this whole emergence now generated by AI and what that Open AI platform are doing are bringing it into the mainstream and really starting to help a lot more people visualize the tremendous possibilities. As I start to think about this and the problems that my company and I have been solving for the last 16 years. There are still systems are still siloed. There’s data that’s everywhere. And people spend more and more and more on technology and data, but they still can’t run sales and marketing any more effectively than they could 15 years ago. They just have a lot more tech now to deal with it. So as I started thinking about the potential of AI, the first thing I wanted to do was really just help companies solve their problems better. And so the book introduces a concept called Rain, and that name was chosen intentionally because in sales, of course, we’re always trying to make it rain. But in this case I took Matt and it really stands for a Revenue Artificial Intelligence Network. And what it does is it connects all your systems and processes both inside and outside through AI. So you can actually, through one single interface, actually start to direct and manage your revenue engine. So it controls scale.

Greg Alexander [00:04:15] Mm hmm. I love the acronym. So let me make sure I understand that. So Revenue Artificial Intelligence Network.

Jeff Pedowitz [00:04:23] Yes.

Greg Alexander [00:04:24] Okay. And the way that you just described it to me, I find myself wanting to apply past frameworks to it. So is it is it middleware in your perspective or is that an incorrect analogy?

Jeff Pedowitz [00:04:39] Well, in some ways, yes. Right. So it’s it could be taken into something like a Boomi or Mule Sox or automatic or any of these integration in all areas. But combining it with AI so that you can train the systems that you have. So even some of the routine, mundane tasks can be done quickly. But as that starts to supplant, you can actually be a lot more productive. So just some typical use cases we scoring, which is something that we had Eloqua pioneer back in 2004 for the first time, largely has not changed dramatically. Most of the input for sales marketing is made, scoring is manually derived. Well, I think we should get ten points for a website, visit it five points about an email or 17 points of view or a demo. And then the models are relatively rigid, and then we send over what I suppose to be qualified ways to scale sales based on this framework, grade spec and prioritize. But with A.I., you don’t actually need an artificial or an arbitrary model. It can actually analyze the real activities, the demographic data that customers really did to come up with a scientific data, factual-based model that will continue to sell, learn, and even more importantly, become more predictive. Wow. So that’s just one example of where AI can play a major role. There isn’t a sales and marketing person I know that loves cleaning up data. We love getting more data, but we don’t actually like going in and cleaning out fields and systems and building new segments and doing all that well. That’s another way that AI can actually do that, because once you train it on what data standards you want for your company, you can start doing that automatically. Content creation and response. No matter what sales methodology is in today’s modern B2B selling environment, our customers are 90% and 95% of the way through the sales cycle. This is not like what, Greg, when you and I are personally, I wish we could control everything. So that inherently puts us at a disadvantage. So if you can use AI to do more informed research on your prospect customer, write better correspondence, look at their content, come up with unique differentiators, anticipate possible objections your buyer might have, and be ready with response to be more proactive. You’re now starting to get ahead of the game.

Greg Alexander [00:07:09] Those are fantastic use cases. It’s causing me to creatively think about how to get them implemented. What I want I would like to do speak to you about a question I have here in my notepad is, you know, selfishly, I’m trying to help the members of collective 54. I know what you’re doing is much bigger than that. But in this particular case, about 85% of a proserve income statement. The expenses are labor. And so if you can replace labor with tech in theory anyways, you can significantly increase profit margins. Now, some people view that as a negative, you know, and a lot of the stuff you read about AI right now is all these scare tactics. But as a capitalist, I view that as a huge plus. I mean, if my members could take their workforce from 110 and keep the revenue the same, I mean they’re going to make a lot more money and scale a lot faster. So is that hype? Is that real? I mean, do you see the tech replacing humans?

Jeff Pedowitz [00:08:05] Well, it’s a little bit of both. I mean, it doesn’t outright replace humans. And it should be noted that we talk about AI as a general category. AI in its truest sense, means artificial intelligence, sentience, self-awareness, emotional awareness, what we’re all talking about, this general of AI, ChatGPT. It’s not that, it’s machine learning. Now it can take large amounts of data and it can learn quickly in a process to make decisions. But it’s not self-aware and has no emotional understanding. It doesn’t understand context. It doesn’t understand nuance. It is still just a tool in the hands of a skilled practitioner. So I view this as the third major generational change since I’ve been in the workforce. The first, of course, being the rise of the Internet. The second, the introduction of the smartphone. And now this. Now, when the Internet first came out and I got my first marketing job in college, I did catalog marketing the bank. There was no email. There was no Internet. There was no nothing. Did catalog marketing go away? No. Did two new digital channels come into play? Yes. Some people that were very skilled in direct mail moved over into email, digital channels and developed new skill sets. When the smartphone came out, it also introduced the whole new apps and mobile advertising and all new ways of doing things. So I think if you’re just doing simple, repetitive tasks and you’re not willing to adapt like any other moment in human history, if you don’t evolve, sure you will get left behind by an unknown space. AI doesn’t replace the human. It can’t because it’s not a human. It can make us a lot more productive. It can make us a lot smarter. And it can process things faster. So sure, it will introduce new margin providing that professional service owners can really think about how to apply it in the best way for their business. So let’s talk about some immediate practicalities. Almost all of us in professional services are doing research with our clients. We’re doing interviews, we have transcripts, We provide some kind of report or presentation that, well, today that takes a lot of manual activity. It requires our senior and junior people to crunch data and do that. Those tasks can be replaced by AI and done in seconds, which will free up more value added time for those professional people to add more quality insights based upon that data back to the client. Mm hmm. And you use AI. to automate the data gathering. So if you’re doing a subjective in-person interview today with your client and you have them, just go to a site, they fill out a survey,  AI processes all that information in real-time, speeds up that discovery period, adds more value. Yes. So there are a lot of different ways that AI can enhance it, but I think it gets a little overhyped to say that it will replace.

Greg Alexander [00:10:55] Okay. So if I’m listening to this, my first thought is I need an AI strategy for my firm. I’m intimidated by that because it’s evolving. I mean, just just in the last 10 minutes, you’ve dropped more things on me that I knew were possible and that I’m imagining that pace of change is going to continue. So what do I do? I mean, how do I develop a strategy for myself and how do I keep it up to date?

Jeff Pedowitz [00:11:24] Well. Try not to make it bigger than it is. Right, because it’s going to keep evolving and changing. So if you can appreciate that this is a way of streamlining and take improving analytical capability processing. Make a list of your business today. Look at your operational things that you do, your sales things, your marketing, and then look at whatever your professional service on or whether you’re on an architecture firm or a law firm or you are on a consulting firm. What are the things that you’re delivering to your clients? Go back and look at your recipes, your statements of work, and say, okay, if I was going to just add AI to my things, what would that look like? How can I just improve my offering? If I was just to AI enable. Many of us have some type of maturity level, some type of tiered offering with our clients, could you take your top tier and introduce AI to it bigger and more advanced? Or conversely, could you introduce AI to your basic tier and make it more palatable for your prospects and clients and thereby lowering your cost of delivery and acquisition? And I would just start there. So build a simple spreadsheet and go through and that’s how you start to frame out a strategy. Don’t sweat about whether or not you got the right tools or not. Start off with something simple like ChatGPT or Bard, which are conversational and generational. Don’t get some. I mean, there are literally since the time you and I talked about doing this podcast, there’s been 500 applications that have hit the market, but only in the last month or so. But a lot of them are crap, you know, and a lot of them are just small little widgets. Don’t get to fall into that trap of getting consumed. Like you’ve got to go out and buy all this stuff. That’s not necessary. Use the free stuff.

Greg Alexander [00:13:15] If you think back to the two previous key changes of your career, the Internet, the smartphone, and now this. What did you with retrospection now, what did you learn from those two previous major moments that you think you can apply to this moment and allow you therefore to take advantage of this moment, maybe more than you did the previous two?

Jeff Pedowitz [00:13:36] Well, as an investor, I definitely wish I would have added that on some of those .coms, not the ones that last, but the ones that I really I, you know I think that I would have gotten involved sooner and incorporated it even much faster in the business. Well, the benefit of hindsight, I think, always makes us all more prescient. But in light of that. I reflect back on the earliest part of my career, I did not understand truly what the Internet was going to become. I had no. I mean, again, this is we’re talking early nineties, mid nineties here. There was no Google, no SEO. We had dialing with AOL and.

Greg Alexander [00:14:18] No one had any.

Jeff Pedowitz [00:14:19] I decided to hear that we got mail. So I’m certainly not going to claim I mean, certainly with the revision I could be a futurist, but at the time, no, I didn’t know. But I think I would have embraced it more and seen seeing where it’s gone. Same thing with a smartphone. I mean, when I first came out, I was I love my BlackBerry like everybody else. I was just like I was reluctant to switch over and what actually got me to do it is a good friend of mine, Dave Lewis, owned a rival firm. We were at some conference up in Toronto and he was showing me all the stock prices of his clients, his public clients that he was helping since he got involved on his smartphone. And I thought that was just the coolest thing, you know what I mean? Basically saying, Hey, what’s going on? Since we got involved this is what my clients are doing. So I went out and got the phone the next day, haven’t looked back. Yeah, but even then, you know, this first couple of years, you think about us here in the States, we would not even think about using it for banking. I know. And working out. I’m not going to have my information out there. I still got to go to the bank like everybody else and deposit my checks. But today, do any of us think twice about just aiming our phone somewhere? Those of you that are listening, I’m like aiming my virtual phone here. Now. I mean, so it’s changed, you know, we get it and it’s proven over and over again that as consumers, we will trade privacy for convenience. Yeah. So at first, what we’re reluctant to until we realize what we’re ever afraid of. So, yes, I mean, the concerns out there right now are real. And I don’t mean and I don’t want to minimize it in any way. I mean, there are definitely ethical concerns. There’s definitely a built in bias to some of these systems and tools. But that doesn’t mean that they still can’t be highly productive. And you just you know, you exercise with some common sense and some caution but today’s fears will be abated by tomorrow’s gains and productivity and the things that we’re going to be able to do because of AI are going to be mind-blowing. In fact, just like I mean, even though I’ve thought about a lot of things, there are so many things that we haven’t even possibly contemplated yet that are going to happen in the next 2 to 5 years because of this change in technology. And that’s the great thing about the human race, is our endless ability to create and to innovate.

Greg Alexander [00:16:33] Yeah, I agree. I mean, if you just think about the health implications of what we’re going to be able to do medically because of these tools, I mean, it’s amazing. And I’m with you. I think the the pros outweigh the cons tremendously. Okay. Well, we’re out of time here. So, Jeff, thanks for being here. Give us the name of the book again, because by the time this airs, we should be able to buy it. And I’m assuming you’re going to sell it on Amazon.

Jeff Pedowitz [00:16:55] You got it. The AI Revenue Architect.

Greg Alexander [00:16:58] Okay, very good. So I encourage everybody that’s listening to this to pick up a copy of that. Jeff is a qualified author, to say the least, so I’m sure it’s well-researched and well-written. Couple other things for you. Obviously, members, you should make sure you attend the Q&A session we’ll have with Jeff when that gets scheduled. You can ask your AI-specific questions to him at that point. If you’re not a member, of course I encourage you to do so. Go to Collective 54.com and apply and one of our reps will get in contact with you. If you want some more content, check out our newsletter Collected 54 Insights. You can find that on the website. And of course our book is called The Boutique: How to Start Scale and Sell a Professional Services Firm. You can find that on Amazon. But until next time, I wish you the best of luck as you try to grow, scale and exit your firm. Take care.

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A Strategy for Growth: How to Create Value for Clients

A Strategy for Growth: How to Create Value for Clients

Play Video

How do you make your firm more valuable for your clients? That’s the ultimate question. But what it comes down to isn’t as simple as X’s and O’s. Your business strategy needs to cover all the bases.

That means everyone understands the allocation of resources, your staff has a clear understanding of what’s required for customer satisfaction, and leadership knows what it takes to raise the skill level of the entire team.

In this video, we walk through the do’s and don’ts of an efficient business strategy to create more value for clients. 

In this video, you’ll learn:

    • The 3 resources a business strategy is built around
    • 4 data inputs that can help make your business more valuable to clients
    • How to create a business strategy that makes your business more valuable to clients
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Episode 88 – How a Founder of a Training Firm Scaled his Firm by Scaling Himself – Member Case with Tom Abbott

Scaling a boutique takes a team but firms are often started by a single founder. On this episode, Tom Abbott, CEO and Co-Founder of SOCO Sales Training, shares how he transitioned from being involved in every aspect of the business to focusing on team development. 

TRANSCRIPT

Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm bigger and faster. My name is Greg Alexander. I’m the founder and I’ll be your host today. And on this episode, we’re going to discuss how a founder of a boutique processor firm is able to scale the firm by replicating himself in an executive leadership team. This is a really fascinating topic because we’re combining a couple of different chapters from our book, The Boutique, and we’ve got a great role model with us today. His name is Tom Abbott, and Tom is in the throes of this as we speak. And he’s had the courage to attempt to do this. And we’d love to hear his his story. So. So, Tom, welcome to the show. And and if you wouldn’t mind, please give the audience a proper introduction. 

Tom Abbott [00:01:20] Hey, thanks for that, Greg. Yeah, a real pleasure to be here. Tom Abbott here, co-founder and CEO of So called Sales Training. We help companies to optimize their sales performance, so we do that through virtual instructor led training, through webinars and through our e-learning platform called SOCO Academy. So anything about sales, we help B2B companies particularly to optimize their performance. 

Greg Alexander [00:01:44] Okay. Very good. Okay. So let me set this up a little bit. So sometimes founders and co-founders like Tom suffer from what I call the hero syndrome. And the hero syndrome is that we as human beings, we love to feel needed. We love to feel like the hero. We have our personal identity wrapped up in the firm, and it feels good. We get validated when when clients say, Hey, you have to be in the key meeting, or when employees come to you all the time with major decisions that get made. And this insecurity can get in the way of scaling a firm. And the fix here, if your aspiration is to scale beyond a lifestyle business, is to build a firm that is not dependent on you, a firm that can run without you. And this requires, you know, being able to kind of check your ego, so to speak, and surround yourself with an executive leadership team that can do what you can do as well as you can do it. And if you’re able to do that, you’re you’re able to overcome the founder bottleneck and scale yourself by replicating yourself and others. And this is a big stumbling block for many. So so, Tom, as I understand it, this was once a stumbling block for you. And it’s either no longer or it’s in the process and partially no longer a stumbling block. So would you would you share with us kind of where you are in your journey and how you first became aware that maybe you had this problem and maybe what your first steps were, etc.? 

Tom Abbott [00:03:18] Wow. Okay, so there’s a lot to that question. The first the first part is it’s always a work in progress. I think the first key is realizing that you suffer from hero syndrome. And that’s the first part is the awareness. And then sort of realizing is this is this working for me? Right? Is this really helpful? Does this help me grow the business? Do I feel like a hero that I can swoop in and save the day, but at the expense of doing other things like actually growing the business and thinking about strategy and expanding and doing the kind of, you know, boss stuff. So, you know, typically, you know, that’s always a challenge. But I came to that realization, you know, probably about three years ago, I imagine, where it just became really apparent that this this company won’t grow beyond me if I don’t kind of get out of my own way. So the first step for me was to say, look, I’ve got to stop doing sales and I’m awesome at sales. So that was very difficult and I’ve got to stop delivering training programs and I’m a great facilitator and trainer, so that’s really hard, you know, you know, I’m still available for keynotes for companies still engaging to come in and do the big, you know, motivational rah rah as a thought leader. But when it comes to the training for a half day or one day or a two day program, we’ve done a really good job of of of getting freelance trainers certified through me and our training program, which I can talk about later to deliver that on our behalf. And that’s just been honestly a game changer because the training is happening all over the region, all over the world. Sometimes when I’m asleep, it’s just it’s just been a game changer. All right. 

Greg Alexander [00:04:56] So I want to I want to probe in a little bit because you are great at sales and you are great at facilitating. But one of the reasons why you’re great at both is because you love it. So I think founders don’t do what you did because they they love what they do and they don’t want to. Doing what they love doing. So how did you reconcile the conflict between, Hey, I can go out and sell the next client, which I love doing, that I get energy from it it feels good with. Yeah, but that’s in the way of me trying to scale my firm. Like, how did how did you how did you put those two things together? 

Tom Abbott [00:05:35] I think what I did, Greg, was I realized that there were other things that I also love to do. So I love to train. But then I could change my love for training sales teams to training my own sales team. So I can I can do that. I can change my love for, you know, sales for well, let me let me coach my sales team and then they can bring me in for some deals. On some cases, if there is, you know, three or four C-suite people on a call, they’re like, hey, Tom, if we get you on this call, you know, you sprinkle a little founder’s magic 3 minutes. That’s all I need from your time in and out. And you’re good. That’s fine, because then I can still have the team do the grunt work, the follow up to put the proposal together, to send the brochures, to answer the questions, to schedule meetings, all of that stuff that I should not be doing. Because something I realized a long time ago is I was the most expensive trainer on the planet. I was the most expensive salesperson on the planet, probably the most expensive data entry clerk on the planet, like everything we’re doing as founders. And I realized a few years ago, I always ask myself, Is this making me money? And if the answer is No, this isn’t making me money, then I’ve got to stop doing it and get someone who’s, you know, cheaper to do it for me. Yeah. 

Greg Alexander [00:06:49] One of the primary, if not the primary reason why boutiques don’t scale is they have senior people doing junior work, which is what you were just talking about, because in the most senior person in the firm is the founder who happens to be the most expensive. So if you’re doing something that a junior person can do, by definition, you’re eroding all your margin. And that’s a great realization and a great reminder. So I love your answer around how you didn’t sacrifice job satisfaction to make this happen. You just redeployed your love in other areas that lended itself to scale. For example, instead of training clients, train your own staff. That’s a great example. What would you say to founders who say this to me all the time? And it’s somewhat of a religious battle between me and them at the moment that says, Well, I’m special what I do, nobody else can do. So it’s impossible for me to replicate myself. Junior people can’t do X, Y, Z. What do you say to that? 

Tom Abbott [00:07:46] Well, the first thing I say is two things. One, I totally get that because I struggle with that. And you’ve got to get over yourself, because if no one’s going to be as great as you and I’ve realized that I feel, you know, and maybe, maybe we’re wrong, okay. Founders maybe were wrong. Okay. There’s a slight possibility that maybe we’re not as amazing as we think we are. However, we’ve all taken our businesses to a certain point, which means we’re great at a lot of things. But the point is, and I’ve said this to people, my 80% in front of a classroom in a workshop selling my 80% is probably most people’s hundred. Right? So if you can get someone who’s 80% of what you’re able to deliver, that’s pretty darn good. So do you want to have 100% of a small piece of the pie or get someone who’s 80% but you’re able to scale? So if I can get, you know, three salespeople who are 80% my level, that’s still better than me at 100%. There’s no comparison. If I can get three, four or five, six trainers around the region delivering training at 80% of what Tom Abbot would normally do, that’s fine. Now, a good way to solve that problem and we started doing this this year is we charge the same rates for our training across the board with a so-called certified sales trainer. But if they’re insistent on having me hey, Tom, you know, you worked with us last year. We’d love to have you back. I’m happy to do it. It’s at 50% more than our usual rate. 

Greg Alexander [00:09:22] Wow. 

Tom Abbott [00:09:23] Yeah. And I’ve had some people take me up on it, which is great. Okay, I’ll get out of bed for an extra 50%, like, why not? Yeah, you know, because I still love to do it. So don’t get me wrong, all the founders out there, we still love to do what we do. We’re still great at it. But we have to realize that if we want to scale, we need to get more people on the team doing what we do. And look, there’s there’s no magic. You can document this. I can talk about that, too. You can document the process. You can train people to do it. So let’s get out of our own way and leave the ego at the door. It can be done. But in the event that, you know, people are like, We really insist on having you, the answer is yes. And here is what the investment is. Take it or leave it. Yeah. 

Greg Alexander [00:10:05] Which is a great way to quantify it in the eyes of the customer. And some people will say, you know what, time, yeah, you are worth it. So here’s the premium. And some people will say, okay, you know, I’m okay with. You’re a certified person and that gets you out of it gracefully. Right. It’s a it’s a really excellent example of that. And 50% is a big number. Okay. So here so I’m going to play the role of of these. 

Tom Abbott [00:10:24] And let me tell you, I a 50% is a big number, but it has to be big because I played around with that. And if it’s too close to the regular rate, they’ll just pay that all the time. And then you will never get out of doing that delivery ever. 

Greg Alexander [00:10:37] Okay. So here’s the next objection that when you speak to our members in the future about this subject, this is what you’re going to hear. They’re going to say, okay, I get it. However, I’m time starved. So the time it takes for me to teach somebody to do what I do as well as I do, it just takes forever. I can just do it myself in half the time. So I’m going to scale that way. What do you say to that? 

Tom Abbott [00:11:02] I say that’s actually going to take a really long time. And the reality is the quickest way to scale. Get someone to follow. You want a sales call? The quickest, easiest thing to do. You’re already doing it. Get someone to shadow. You want to call, get them to follow you on a sales call. That’s number one. Number two, hit the record button on Zoom. Super easy. That doesn’t take any time. You can. Then what we’ve done is we’ve recorded all of my sales calls over the last two years. And look, we’ve been in COVID for so long. If you haven’t been recording your Zoom sales calls, you’ve missed out on a tremendous opportunity to start this learning bank. So it’s a lot easier than you think. So we’ve got literally dozens to hundreds of different sales calls that we label and tag. Oh, this was an inbound prospect. This was a discovery call. This was a follow up call. This had multiple stakeholders, you know, whatever. This was a follow up call. So you can tag those. And then when you’re onboarding your reps, you just send them the link. Hey, watch this, watch this, watch this. So it’s not as hard as we think. And then you just start documenting. So you’ll notice that with your emails that you send out, you’re probably doing your own kind of a copy paste almost every time. So it’s just a matter of, you know, you save those, you put them in a folder, you copy paste, he put those on on a note, you put it in Dropbox or put it on Google Drive before you know it. Before you know it, you’ve got the makings of a sales playbook. It’s not as easy. It’s not as hard as we think. And you could be doing it right now and you don’t even know it. 

Greg Alexander [00:12:29] A lot of our members have handled this issue in the sales function, meaning other people are now selling work on their behalf. Most of them have done that because they’re not like you. They don’t enjoy selling. You know, if I’m a management consultant that specializes in cybersecurity, I can geek out about all the possible hacks that I might deal with. But I don’t want to talk to a client and sell it. So they they delegated that just out of the fact that they didn’t enjoy doing it where they really get nervous about delivering the work. So a client hires me to go to do X, Y, Z. I’m supposed to be an expert with charging them a lot of money, and then I’m going to trust somebody else to deliver the work. It scares them. So how have you overcome that? 

Tom Abbott [00:13:12] Well, there’s a couple of ways. The first thing we do is we we certify all of our facilitator. So how do we do that? One is, you know, knowledge. So we’ve got testing. So I’ve written two books on sales, for example. So we make sure that they read the books, they watch all of our videos and so called Academy, which is our e-learning platform, and then we actually test them on content. Are you a sales expert? Are you a subject matter expert? I can’t teach you to do that. I don’t have time for that. So are you competent and confident in training sales? Do you know your stuff? That’s number one. Then number two is the the skill of actually facilitation. So that’s what we need in our business. Number one is you’ve got to have the sales acumen and knowledge. But the second is you need the delivery skills, the so-called platform skills. Can you engage an audience? Are you good, coach? Do you know how to answer tough questions? Can you put people in breakout rooms and facilitate discussion and role plays? So that’s all part of my world in the training world. So preferably we get people that have had some certification in training. They’ve gone through a training program. They understand about curriculum development or they are or were an internal trainer within a large company. So they’ve got their chops. Having done that, I don’t have to teach them how to do that. So we would test them. So test them in knowledge, which is a written test, some multiple choice, some, you know, short answer as well as delivery. So we get them to actually deliver a sample session with our team and we recorded on Zoom and then internally we look at it and give them feedback so we can see them in action if they’ve got a demo video even before they come to the interview process. Even better. So that’s how we can guarantee that, okay, we’ve got good people. Then they’ll work with me personally and I will train them. Okay, so this is how I handle this situation. This is how we do it here at SOCO. So there’s you as a sales trainer, and then there’s how do we do it here at SOCO? So then we just have to be able to guarantee to our customers that the experience will be the same. So a lot of people think that it’s about the trainer and in a sense it does have a lot to do with the trainer for sure. However, what most of our customers want is a consistent framework or a consistent methodology for all of their sales teams around the region or around the world. We’re able to do that through the certification program. So that’s that’s been really helpful for us. 

Greg Alexander [00:15:32] Okay. And then the last objection I get sometimes is, hey, if I hire these people to do what I do, I got to pay them. I’d rather just put the money in the bank account and not pay anybody to do this. So what do you say to that? 

Tom Abbott [00:15:46] I mean, you can do that. But again, it’s you know, do you want just like a mom and pop, you know, like a hobby business or what? But do you want to grow? Right. So if you actually want to grow and you want more business, you have to find a way to meet the needs of customers. And there’s just not enough hours in the day. I know that. There’s just not enough hours in the day to to service everybody. Now, maybe you’re happy just having a lifestyle business and maybe say, look, all I want to do is this many hours and and that’s fine. But if you actually have aspirations of, you know, reaching as many people as possible, like, you know, I have a goal. I don’t want anybody on the planet to lose a sale because they can’t sell. That’s that’s my mission. So I want to reach as many humans on this planet as possible. Tom Abbott can’t do it all by himself now. It took me about eight years to realize that, but I can’t do it all by myself. So I got to work with people. Yeah. So and it’s very hard when you feel like you’re really good to actually start bringing people on because there’s a danger in going, Yeah, but she’s not exactly like me or I wouldn’t have done it that way. That’s your biggest problem right there? Yeah, maybe they do it their own way, but following a framework, if that makes any sense, kind of, you know, you’ve got some things you need to do, but you do it your own way. You focus on the what and the why and let them focus on on the how in the sense. And and, you know, that’s just going to help you grow. You’ve just got to build that team and just trust, trust in your process. So what I’ve done, Greg, is I’ve been able to say, look, I’m going to take my energy away from sales. I’m going to take my energy away from training and put it towards training my team and becoming a leader and developing them. And I see my number one role as a CEO is to step up and be a CEO. Yeah. And run the company the way a CEO would. Yeah. Get out of my own way. 

Greg Alexander [00:17:36] Well, listen, you have a tremendous amount of self-awareness. You know, being an entrepreneur is a journey. Right. And you’ve been on it for eight years, and you probably didn’t know what you know now back then. And you now know. And it’s just a wonderful pleasure to have you in the membership because of your level of self-awareness, your humility, your modesty, because you’ve had a tremendous amount of success. And just on behalf of the membership, we’re up at our time window here, but I just wanted to thank you for your contribution. You know, the way the collective works is we’ve got to contribute to the collective body of knowledge, and you’ve just made a great contribution. So thanks, Tom. 

Tom Abbott [00:18:11] Hey, my pleasure. And thank you, Greg. I’ve gotten a lot from my membership in Collective 54, and I was just thrilled to be invited on the podcast to kind of give back because I’ve gained a lot already. So thanks to you. 

Greg Alexander [00:18:22] Okay, fantastic. And for those that are interested in this topic and those like it, you can pick up a copy of our book, The Boutique How to Start Scale and Sell a Professional Services Firm. And if you’re interested in joining our mastermind community and meeting great people like Tom, check us out at collective54.com. Thanks again. Take care.

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Episode 86 – How a 43-year-old Marketing Agency Handled a Generational Transfer – Member Case with Rob Rankin

Decision making evolves as your firm scales and the founder must be replicated in the successor. On this episode, Rob Rankin, CEO at Clarity Coverdale Fury (CCF), shares his perspective on developing the next generation of the firm, with a focus on succession planning and how decisions are made. 

TRANSCRIPT

Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm bigger and faster. My name is Greg Alexander and I’m the founder and I’ll be your host today. And on this episode, we’re going to discuss power. And when I say power, basically what I am referring to is how decisions get made inside of a boutique. And how that changes over time as we move through the lifecycle of a boutique from growth to scaled exit and even beyond. When the first generation is transitioned into the second generation and the second generation is transitioning to third generation and so on and so on, the decision making power dynamic tends to morph when that happens. That’s really important because decisions in a small firm are easy. There’s not a lot of them. They’re simple. They’re not complex. The founder who’s making the decisions can play the role of dictator because he or she is still really close to the business and has great instincts. But as you get bigger in, the founder or co-founders might be two or three steps removed from the day to day or the clients, you know, they might not be the best people to make decisions anymore because their inputs have changed quite a bit. So that’s what we’re going to discuss today. And we have we have a great role model, Rob Rankin, and Rob is in the middle of this. He has a really great perspective because he has been through a generational transfer and has a viewpoint from that standpoint. So, Rob, welcome to the show. It’s great to have you. And would you mind, please, giving a proper introduction of yourself? 

Rob Rankin [00:02:06] You got it. Thanks, Greg, and thanks for having me today. My name is Rob Rankin and I’m president and CCO of CCF, we’re a marketing communications firm that was founded in 1979 based in Minneapolis. And our sole world headquarters are still in Minneapolis. 

Greg Alexander [00:02:23] And what type of clients do you serve? 

Rob Rankin [00:02:26] About 60% of our book of business is in health care and health and wellness. And what we like to call we know health care from all four angles. So public health manufacture, payer and provider. 

Greg Alexander [00:02:39] Okay. Got it. And Rob, we wanted you to speak on this subject because as you just mentioned, your firm was founded in 1979, and right now it’s 2022. So there’s been a journey. And I’m sure the decision making power has changed over time and there’s been generational transfer. So if you wouldn’t mind, maybe kind of walk me through briefly that history from then till now and how the power dynamic changed. 

Rob Rankin [00:03:06] Yeah, so I joined the firm in 1998 and it was founded in 1979 by three Gentlemen’s Clarity, Coverdale and Furey. And in 1978, I was just an account guy and then grew up into a more leadership role account supervisor and ultimately running a department. It was also at that point in time where the gentleman who founded the company were getting ready to retire. One was very ready and the other two weren’t very far away. So over probably a 3 to 5 year period of time, we started to have discussions about a transfer. A few of us, what we call Gen two, formed a team and moved into that and we bought that firm in 2014. We’ve been running it successfully ever since. I’ve since lost one of my partners to retirement and another just is trying to retire this year. And we’re we’re going to get her out of the door to her own accord shortly here. And we’re building that Gen three team that can ultimately take it over from myself and my two other partners. 

Greg Alexander [00:04:13] Yep. And this progression. Gen one, gen two, gen three. You know, this is very common in professional services because it’s a people business. And very often there’s the next generation that wants to stay and wants to continue to do what they’re doing. And there’s an opportunity, if you handle it this way and handle it correctly, you know, for each generation to benefit for not only financially but in other ways. Rob When, when Gen one was transferring to, to Gen two, you and your partners, did it go as smoothly as you had hoped or was there, were there any bumps in the road? And what type of lessons might we learned from that, from that tale? 

Rob Rankin [00:04:59] Yeah, I’m super blessed in that it did go what I would say, relatively smoothly. Perfectly. Absolutely not. And the founding partner, Tim Clarity and myself used to say, because we intended at least to keep the name the same, that if we wake up five, seven years from now and no one know you guys bought it, it worked. And it worked really, really well. And that actually happened. I will say that there were some speed bumps early on as we were forming our Team Gen two and there was a person in place who just wasn’t going to be partner material. And so there were some really, really hard discussions that had to be had to let him know that. And to say that was what was easy. It wasn’t it wasn’t easy at all, but it had to be done or we would have been setting ourselves up not for success, but for failure. And so that was probably the most difficult thing. And then the other thing, at least from Gen two, is perspective being patient because we had we had a kind of a phased approach with each of the partners where they wanted to phase out over time for different reasons. And we allowed that to happen. And from an outside looking in perspective, it still appeared like they were in charge even though they weren’t. And that was important to them and it was okay with us. You know, it wasn’t something where we needed to be seen front and center. We also didn’t want to reinvent the enterprise. We didn’t want to rename it. We didn’t want to rebrand it. We didn’t want to blow the whole thing up. They had a model that was working and had worked for a really long time. And we felt the blow up, that type of equity in the marketplace would have been a big mistake. So that required a little bit of discipline, but we were able to do that as well. 

Greg Alexander [00:06:38] You know, what jumps out at me about your story is that, you know, you joined as a young account person and grew up to where you are right now, which means that those that Gen one did an excellent job of identifying high potential employees and grooming them to take over bigger and bigger responsibilities. That that happened in the typical kind of apprenticeship model where it was just through osmosis or was there some formal system put in place? 

Rob Rankin [00:07:05] It was really more of an apprenticeship model. Tim Clarity I tend to be the type of person that if you give me a lot of room to move, I work better. If you constrain me, I’m not good being micromanaged. And so that’s kind of the philosophy in the culture here. We hire really responsible people and let them do their way, do their job, and we do our best just to get out of their way. That doesn’t mean they don’t need coaching. It doesn’t mean they don’t need training. It doesn’t mean they don’t need mentoring of sorts. But but we let them do their job. And Tim allowed me to do that and allowed our media director at the time, Danny there to do the same thing and in and of it. She and I both kind of grew up together in the business and became somewhat area parents at the end of the day. Diane was probably interested in retiring sooner while she was. She’s already retired sooner than I and and she’s since moved on. And because of that, she didn’t want as big a share when we transitioned. But we had a third person internally who also had really was a finance person and had really great, great credentials in that space. And so she worked in that and she was interested in buying in a little bit more. And between the three of us, we found we found a good balance for each of us. 

Greg Alexander [00:08:21] Now, you mentioned buying, so I’m assuming there was some type of transaction that happened from Gen one to Gen two. And was it the traditional way where the first generation kind of set up, maybe like a sellers note and they transitioned a piece at a time based on profits that were being generated by the business? Or did you guys have to go out and raise the money to pull this off? 

Rob Rankin [00:08:42] No, we were really fortunate. There was an owner financed buyout over a five year period of time with an option for a year, six and seven, if needed, at the seller’s discretion. So we didn’t control that, and then we did have to have some skin in the game. So there was a certain percentage of the overall price that we agreed upon that we had to we had to go to a bank and we had a we had to find financing for that. And based on our individual percentages, that’s what we had to put up. 

Greg Alexander [00:09:13] And they structured that way because they wanted skin in the game. Or was that the only way to close the gap in price? 

Rob Rankin [00:09:19] They wanted to know that we were serious and 100% owner financed buyout, I think and I believe that it was the right decision for us. It was the right decision for them. They wanted to know that we were serious and that, you know, being able to have needing to go to a bank and taking out some form of a loan, you know, it it ratcheted things up just a bit. 

Greg Alexander [00:09:40] Right. And during that transition, let’s call it five years. Back to the main topic here, which was how decisions are getting made or the power structure externally. It was important to them to still be perceived to be in charge. But internally, you and your partners were running the firm. Sometimes this gets messed up because the generation that’s on their way out, sometimes they don’t want to give up control and they they stick their nose where it doesn’t belong at times. How did that happen at all? 

Rob Rankin [00:10:09] And in not to a not to a degree where it was terribly difficult to the partners that simply wanted their name still on the door, it was more that they just wanted to be seen as still the important person that started the company, and rightfully so. They’re fantastic gentlemen, their friends and mentors to this day. There was one that loves to do the work and is just passionate about the work and was an in 30 until the day he walked out the door. But it wasn’t difficult and there wasn’t anything that was acrimonious or needed, lawyers or anything like that. 

Greg Alexander [00:10:46] Okay. You know, and then Gen2 takes over and some of them are retiring, as you mentioned. Is there like a mandatory retirement age or is there some some rules around when somebody can walk out the door there? 

Rob Rankin [00:11:02] There aren’t, other than once you decide to walk out the door. The firm has up to ten years to purchase your stock at the firm’s discretion. I say so we can do that over time. But you can’t hold on forever. And you also can’t be the one that drives that. You can’t walk out the door and say, I want to get paid tomorrow. 

Greg Alexander [00:11:23] Very good. I mean, that makes a lot of sense. That keeps everybody on the same page there. It sounds like to me you had some great legal counsel that held your hand here and put these things in place to make sure that, you know, there was no unnecessary tension and drama. Is that fair to say? You had great counsel. 

Rob Rankin [00:11:40] We we had fantastic counsel. And my only disappointment is that he moved on and went and worked for his dad’s company. So he’s no longer my lawyer. So. 

Greg Alexander [00:11:52] And would you advise our members that might attempt to do this, not to do it themselves and find the right attorney to help? 

Rob Rankin [00:12:01] 100%. I would say that unless you’re an attorney yourself, and even if you are, it would be a mistake to try to do this without the one. Putting the structure in place from a legal standpoint. Kept us all in line. Yeah, we all knew the rules. We agreed to the rules, and we knew we had to follow them. And we did. Yeah. 

Greg Alexander [00:12:18] And that’s the important thing. And everybody agrees upfront, right? So there’s, there’s no surprises. And when I’ve seen this and I’ve seen it several times now, it’s very rare. Does a dispute wind up in court because of this? I mean, it was it’s friends cell and a friends, so to speak. And it’s a very natural, organic thing to do. And this is well-worn territory. This isn’t something for those that are listening. You don’t have to go invent the wheel here. I mean, this has been going on for a long time period just because it’s the first time that you may be doing it members. It’s not the first time that it’s been done. Okay. So now let’s fast forward a little bit. So your partners are retiring. At some point you’re going to retire and you’re going to have to go to June three. Do you plan on using the same approach or are things the world is different now than it was back in 1979, 1998, even 2014 does is the process still workers? Is it changing? Does it need to be modernized? 

Rob Rankin [00:13:13] I think it can work, but we have to be sure that certain components are in place. So right now we have one gentleman who’s actually a member of Collective 54 as well, because he’s brought in and is a partner and and he’s a candidate to take that lead. Now, we have to do a few things. We have to surround him with people just like I was surrounded with great team members to be a part of that. And so if we can do that over the next 3 to 5 years, then we’ll have a gen3 and I think it can work pretty seamlessly. If not, we do need a plan B, you know, whether that’s a merger and acquisition selling, where we’re bringing on talent to help round out that individual or surround him, I should say, with others that can help him with the day to day business. And then that’s an option too. So I’ve seen several people in our space, specifically marketing communications, be left at the altar by that internal person who was supposed to buy. And so I know that we do need a plan B. 

Greg Alexander [00:14:14] Yeah, I’ve seen that happen too, you know. And then also, I mean. Can you go so far as to think about zero on Jan three? Can you peak down to Jan four? Is that too far of a stretch? Too many years will pass by by then. 

Rob Rankin [00:14:27] I think for me I don’t I think by by the time I hand off the torch it’s it’s then there’s to have and I think that’s part of what really worked with us is the guys never came back and wanted to be back in the business. They let they let Jan to run it the way they they saw fit. And there’s also just a spirit and a culture here that’s been built, starting with Jan one, carried on by Jan two. That’s really important. Yeah. And it’s why I know that while it’s likely, maybe even probable that we could get more money if we did an external sale, it’s not in the spirit of the enterprise and what the guys were gracious enough to do for me and my other partners, we want to do for those that have been working with us side by side for years as well. 

Greg Alexander [00:15:11] Yeah, well, this is a great story. You’re a fantastic role model. This topic is underrepresented in the world. It’s not talked about enough. And the way these collectives work, ours and others, is that, you know, people have to make a deposit into the collective body of knowledge, and that’s how we all get smarter. And you did that today, and I’m very grateful. So on behalf of the members, thanks for being here and sharing your story with us. 

Rob Rankin [00:15:37] You got it. Thanks so much, Greg. And I’ll see you at the boutique on Friday. 

Greg Alexander [00:15:41] Okay. Very good. And for those that are listening to this and they want to learn more about this topic and all the other ones related to growing, scaling and exiting, if you haven’t already, pick up a copy of the book The Boutique, How to Start Scale and Sell a Professional Services Firm. And if you’re not a member and you’re listening to this and you want that type of tribal knowledge, which is very tough to come by and meet, really interesting people like Rob consider becoming part of our community and you can find that at Collective54.com. Thanks again, Rob. 

Rob Rankin [00:16:15] All right. Take care.

Posted on

Episode 77 – How a Founder is Scaling Her Marketing Agency by Getting Prospects to Come to Her

Ali Schwanke

Invest in your marketing and let your customers come to you. In this podcast episode, we interviewed Ali Schwanke, CEO & Founder of Simple Strat, to share how this professional services firm elevated its inbound marketing strategy and improved win rates.

TRANSCRIPT

Greg Alexander [00:00:16] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale, and exit your firm bigger and faster. 

My name is Greg Alexander, and I’m the founder of Collective 54, and I’ll be your host today. Today we’re going to talk about defining a market. And let me set this up by suggesting why this is important. You know, many like to say, and I agree with this phrase, the riches are in the niches. And as founders of boutiques, our members have to pick the right market. It’s got to thread the needle a little bit. 

It’s got to be big enough to matter but small enough where you can dominate. So we’ve got a great role model with us today, someone who’s got some experience with this, and she’s willing to share her learnings with us. Her name is Ali Schwanke. And Ali, I would love it if you would give a proper introduction to the audience. 

Member Case Study: Ali Schwanke, Simple Strat

Ali Schwanke [00:01:19] Absolutely. Well, thanks, Greg, for being here. Yeah, as Greg said, I am Ali Schwanke, and I’m the founder of a business called Simple Strat. And we are a HubSpot consulting agency that started about six years ago. And we have worked with folks all over the nation in helping them get more out of their HubSpot instance, which is a marketing technology and software platform.

 And also increasing the effectiveness of their content on that platform once they get their bearings under them. So we’ve been doing that for the last six years, but myself, I’ve been in marketing for almost two decades now. 

Greg Alexander [00:01:51] Okay. And Ali, what’s a typical client look like for you? 

Ali Schwanke [00:01:56] Sure. So our clients that have the most success with us are between about five and 200 employees. And they have a strong propensity to grow efficiencies with their business. And they are primarily B2B because they have the need to track information inside of a technology platform and then eventually get the most out of the reporting and analytics that come with that function. 

Greg Alexander [00:02:18] Okay. Very good. So the reason why I wanted to speak to you this morning is I understand that you and your team have been redefining your target market a bit and yet that answer you just gave me was very crisp. You should be proud of that answer. That tells me that you really have given this some thought. 

You mentioned an employee count range, etc. So why don’t we start with what first made you think about maybe redefining your target client and redefining the market that you’re going to compete in? 

Scaling a Business: You Need to Define Your Target Client and Market

Ali Schwanke [00:02:48] Sure. Well, a lot of professional services firms and agencies are not excluded from this. They’re kind of like that  story of the E-Myth, where they have someone who’s really good at a craft, and they just start an agency or start a company. And you go from being able to do the work to thinking about building a company around the work. And once you do that as an agency, you realize that you are competing with everybody and their mother and their son who went to college for social media. 

And the word marketing is so vague, and I think it is for a lot of folks. So when we started saying initially, when Simple Strat started, we were going to focus primarily on helping folks with marketing strategy because there weren’t as many strategy firms out there. What I failed to realize at the time was that strategy is something that is not defined just by marketing. You’re now competing with firms that do business strategy and all these other things. 

So as the firm developed, we found a specific line of success in helping folks navigate HubSpot. And what we realized is, if we can get really, really good at that platform and know it better than any of our competitors and focus only on that platform, we have a competitive advantage of simply focus. And that focus allowed us to then narrow that target market to teams that really appreciate our expertise and have the value and a budget defined for engaging someone like us. 

Greg Alexander [00:04:11] Okay. So the path to getting to it towards this new focus of HubSpot, it sounds like, but I don’t want to put words in your mouth that you were looking at where you were having success and then said to yourself, maybe that’s where we should focus. Is that how it happened? 

Ali Schwanke [00:04:28] It did. I’ll say it happened in a little bit of a backward way. We said initially we became a HubSpot partner. There are lots and lots and lots of those out there. We did that about five years ago, and at the time, I think me and my inexperienced mind was thinking we become a partner. That’s our niche. And we go. 

Well, what happened is we did a lot of things to try and promote that partnership. And I’ll tell you, Greg, nobody cared. Nobody cared. So very similar to the story that you published in Chapter eight of the market when we started publishing content around our competitive advantage and demonstrating that expertise online, that’s when things changed for us and the focus became real. So it’s very interesting. I would do it all over again the same way. 

Greg Alexander [00:05:14] Yeah. So let’s talk about that a little bit, because it’s easy to fire up a spreadsheet and say, “Okay, so there’s 5000 companies to go after. And these are the vertical industries and the geographies and the job titles and the sizes that we want to focus on.” But sometimes, we often forget we have to figure out how we’re going to reach them. 

You know, there’s the TAM (total addressable market), and then there’s the percentage of that TAM that you can reach in boutiques like yours, like the one that I had, like our members. It’s not as if we have a 10,000-person salesforce that can go out and reach all these folks. 

So you started producing content and that content started getting out there. That was your reach. Instead of salespeople, you were using content as to extend your reach. And then that content was attracting people to you. That’s how it was working. Okay. Right. And that must be some great content because there’s a lot of content out there about inbound marketing in HubSpot, etc.. So how did you develop content that kind of penetrated the noise? 

How Simple Strat Brought Prospects to Their Firm Through Great Content

Ali Schwanke [00:06:26] Yeah, I think what we found is there was a lot of companies that are writing similar things. And to be frank, when you become a partner with HubSpot, they do their due diligence in helping you sort of build your business plan and your approach. But I’ll say that I’ve been in this long enough to see that at first they were encouraging you to be called an inbound agency, and then they were encouraging you to position yourself as a growth agency and now position yourself as a robot. 

Well, if you think about this, they’re telling all of their partners similar advice. And so great, we’re now in this sea of competing with each other in these same terms. And we did a little bit of analysis of the market of looking at this sort of unserved population. And that was there are a lot of things you can do in HubSpot, but the number of instances that I have seen where the first thing I say when I open up the portal is what’s going on in here. They don’t want to admit to their agency that they don’t know what they’re doing. 

And so we found if they can find content that’s very basic things like, here’s how to set up your lifecycle stages or, here’s how to have here’s how to do a portal audit. There was no content online for that because that is content you have to see. And we already had an advantage of being able to produce video tutorials. So we just leaned into that and that lesson was people, if they see your expertize online first, they trust you before you even make a sale. 

Greg Alexander [00:07:56] It’s so true. I mean, you just referenced one of the chapters in my book, and a book is a version of content marketing, and people read it. And if it resonates with them, they reach out to us and hopefully become a member. I mean, that’s how it works now. 

You mentioned video. I want to go there just a little bit because a lot of our members, I think, aren’t using video as well as they could. And these days, you know, people are consuming content on their phone. Video tends to lend itself really well to that, particularly short clips. So tell me a little bit about what you’re doing in the video bucket. 

Ali Schwanke [00:08:30] Yeah. So I’ll tell you what we did wrong first. I was a firm believer of video back when I started in 2016. I said, we need video. I hired a videographer. I had planned on selling video services to folks as well. And I’ll tell you, Greg, I think I made a whole $5,000 off of this video person. 

Mostly what they did is produce video for us. And in doing that, what I learned was two things. One, there’s two types of video. One is video that is thought out on how to do something. And then there’s video that’s entertaining and kind of what I would call rabbit hole video. You find yourself watching clips after clips, after clips. 

And so for us to go lean into that video piece was we learned that the video content that was out there, people were talking about themself a lot. They weren’t actually thinking about the viewer first. And so we said if we just create short to the point videos that were well-produced and highly searchable, I think we can win. 

So we put a small bet out. We put a certain amount of very, very low production value videos first and saw those succeed. And then we invested in a full channel and it was about six months until we saw that really kind of transact for us. But once we started getting traffic, then we started talking about how to convert the traffic.

 We didn’t  have this like grandiose thing all at once. We grew as we learned. And I think that’s one piece that makes a lot of folks nervous about video is they want to see results after two videos or three videos. And it’s a cumulative effect that we now dominate the YouTube channel for the search of HubSpot. 

Greg Alexander [00:10:00] Interesting. So a boutique like yours is the dominant player on YouTube. 

Ali Schwanke [00:10:06] If you type HubSpot into YouTube, my face will be on at least four or five of the ten results. 

Greg Alexander [00:10:12] No kidding. Wow. That’s quite an accomplishment. 

Ali Schwanke [00:10:15] At the moment. Like, let’s hope that that continues, right? 

Greg Alexander [00:10:18] Yeah. That’s a little bit of an arms race for sure. Yes. Okay. So you mentioned the next stage was learning how to convert once you started getting the traffic. And that’s a big component about defining your target market, which is what our subject is today. 

You know, sometimes we realize that we have to reach this large market and we’re going to do it through content marketing in all of its forms. And you throw the content out there and all of a sudden you start getting lots of inbound interest. But you’re catching the wrong fish. You can’t win. So how did you learn more about your target market based on what was coming to you in response to this content that you were creating? 

Scaling a Consulting Business: How Simple Strat Learned More About Its Target Market

Ali Schwanke [00:11:01] Yeah, I’m a big believer in constantly observing your audience in the way that they talk. So what a lot of teams I would  think miss when they’re looking at their total addressable market. So for instance, if I said I believe my total addressable market needs rev ops because that’s the buzzword right now. I will tell you in having conversations with sales and marketing leaders, rarely do I ever hear the word rev ops. 

And even right now, if I run a keyword search report on that, the volume is low. And that’s because it’s a word we use to describe it in the marketing industry. But the actual thing folks are looking for is, can I have a function that’s accountable for sales and marketing in my organization? So when we’re looking at the way that your total addressable market talks about their products and their needs and their pains, that’s the content to create. And then you have to sort through and say which one of those is closest to a sale? 

So in our case, if they’re having issues with their sales reporting, that’s a problem they’re looking at solving immediately. If they just want to figure out how to optimize their blogs better, that’s longer to revenue for them. And so they might not be willing to pay as much. So we focused on the content that you see immediate gain and then we’re continue like we have a next thing that we’re rolling out that helps address some of that stuff higher on the. 

Greg Alexander [00:12:23] So some of our listeners right now members are going to say, this is fascinating. I’ve never met anybody who can dominate the YouTube channel like Ali has. And it’s hard to do. And what I’m taking from our conversation is how incredibly focused you are on the client and how you’re outward in and everything you think about. 

That example of rev ops is a great one. I mean, that’s industry lingo, but the clients don’t use it. So it’s not valuable. It’s valuable to the other HubSpot partners, but it’s not valuable to the client. I have some members who say, “I don’t have time for this. You know, I’m super busy. I’m a young growing firm. And who’s got time to do this?” I’m sure your to do list is just as long as theirs. So why do you make time for it? 

Ali Schwanke [00:13:11] So I didn’t have a business that existed when we all saw each other a lot in person. Like, I definitely have been to conferences and I’ve networked and I’ve had a lot of success in that early in my career. But we now live in an environment where you don’t go to one master trade show a year and build all of your leads. We now live in a world where that’s happening every single day, and to say you don’t have time for that is like saying 25 years ago that I don’t have time to go to the largest trade show in my industry. 

And if you don’t have a mindset of value, you will not make time for it. But I will say if you do not create content based on what your audience finds valuable, and you talk a lot about this in the book and we talk about a lot about it in the Collective. If you do not create content based on what your audience is interested in and just what you want to say, it will not convert for you and you will have a failed experiment. 

Greg Alexander [00:14:04] And for those that say I don’t see a client spending thousands and thousands of dollars with me, that came through a social media channel like YouTube. What would your response be to that? 

Ali Schwanke [00:14:19] Sure. Some of this comes down to education of marketing and what it is and how it’s defined. I will say the majority of founders that I have worked with in the professional services industry, their initial perspective of marketing and marketing spend is what I would call direct response. Yeah, I have a coupon. I turn in coupon. I see that coupon led to sale B2B sales. And especially when you’re involving a human in their expertize, there is a high degree of trust. There is a lot. 

It’s actually not marketing at all. What you’re doing is psychologically driven and we are complex beings and we make decisions with our level of logic, which sometimes is zero and it’s all feeling. So if you make them feel that they’re learning things from you and trusting you, you can sell them sometimes whatever you want. That’s not a good practice, but once you gain that trust, then you are simply depositing additional coins in that bank that keeps that trust for a long time. 

Yeah, and that’s again, it’s a mindset. I will say conversion wise though, you do have to have a content offer that brings them value and actually shows a small piece of what you can actually do. It has to be tied to the overall value. And if it’s not, then it’s just a fancy download. 

Bringing Clients To Your Door When Scaling a Business: Knowing Them is Key

Greg Alexander [00:15:34] This has been a great conversation. And just to summarize, you know, Ali started and she had a really large definition of a market strategy which can mean a lot of things to a lot of people. And it was outside of her niche and then she narrowed that down by becoming a HubSpot partner. And then even within the HubSpot ecosystem, if you will, she got even tighter by focusing on a specific type of company to go after. 

And then really what I learned today, which was really fascinating, is the code that she’s cracked, if you will. She’s figured out how to reach this tightly defined market in a cost-effective way with a high conversion rate. And she’s doing that through content marketing, in particular on YouTube. And if you type in HubSpot into YouTube, I mean, she’s going to be the dominant provider there, which is quite a thing for sure. 

So, Ali, we’re at our time commitment here, but the way the Collective works is that we all contribute to the collective body of knowledge. You know, every time a member contributes, the other members benefit. And that’s the give and take nature of this. So on behalf of the membership, I want to thank you, because that was a big contribution. I learned a lot today. 

Ali Schwanke [00:16:42] Yeah, thank you. I have learned a lot from the Collective and I know other members have as well. So thank you for what you’re doing. 

Greg Alexander [00:16:48] And members I’m sure many of you are anxious to speak to Ali because if she’s doing this for her firm, she can probably do it for your firm. So feel free to reach out to her via the member portal and have a follow-up conversation with her. 

Okay. And for those that are interested in this topic and others like it, you can pick up a copy of our book, The Boutique: How to Start, Scale, and Sell Professional Services Firm. And for those that are listening to this and are not members and are interested in meeting fascinating people like Ali consider joining our mastermind community which you can find at Collective54.com. Thanks again, Ali. Take care. Ali Schwanke [00:17:24] Thank you.

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