Agency Growth Starts with Existing Clients

0:08Hello and welcome to another episode of the Duct tape marketing podcast. This is John Chance And my guest today is Max Traylor. He helps agencies upsell and cross-sell their existing clients. His approach centers on building relationships with decision makers and aligning with their business objectives, which ultimately leads to long-term retention and growth. Max is also the host of Beers with Max podcast, where he interviews other agency advisors and the author of the Agency Survival Guide book series. So, Max, welcome to the show. Yeah, I didn't realize the intro was so long. I cut some out, believe it or not.

0:46But yeah, you nailed it. You got it all. What do we do now? You know what? I stumbled on my name, actually, because this is my third show today. So I think I'm struggling. So did I also see you drink a beer? No, that was water. You caught me with some kombucha. Oh, okay. I was kind of hoping it was a beer. Yeah, me too. But I'm on 10 and a half weeks after breaking my foot, and I got out of the boot. I got out of the big walkie boot thing two days ago. And yeah, beer does not help with the healing of bones. So I'm really trying. Yeah, yeah. You got to do it. You got to get back out there. So there's a lot of intrepidation in the agency world right now.

1:31Our mutual friend, I think I saw you comment on Marcus Sheridan had a recent post basically saying the agency world is over, that AI is replacing a lot of the things that agencies traditionally have done. Where do you stand on that kind of sky is falling approach? Yeah. I mean, I was saying that 10 years ago and that's when I started. I think there's always a healthy dose of one thing going out the door. But originally I was seeing what was going on in the Martech boost. So you got a lot of, it reduced the barriers of entry for agencies down to zero. So a lot of new entries into the market. They knew how to design things because it was CMS world of low-code sites.

2:18So people could look like they knew what they were doing very easily and it caused prices to drop across the board. Then you had that surge of gig network websites, which I think was the first sort of chop at the tactical deliverable work that agencies were doing. And then I think AI just gave it the one-two knockout punch. I would say a version in there squeezed in there somewhere is you had all the folks that had a team in Philippines doing work and really eroded pricing as well. Sure. Yeah. So just all the... But I mean, I've always been on team strategic work. I think that the value of a third party is in their expertise, not what they can do.

3:01And the doing of things will always go up and down in terms of you need a specialist to do it or some piece of technology just took that person's job. I think it's very difficult to have a long-term, sustainable, professional service business where the service you provide is constantly changing, whether that's being taken by AI or whatever it is. But if you have something strategic, if you specialize in understanding the way people buy, I mean, that might change a little bit over the course of 10 years. And that's where you can really build up some expertise and monetize it. Yeah, you know, you see, I've been doing this for a long time.

3:37So I've seen the wave of digital marketing agencies, social marketing agencies, you know, just like kind of now you're seeing AI agencies, people just kind of hopping on the latest train and they eventually all get wiped out, don't they? Yes. The train does leave the station eventually. And you're caught reinventing yourself. Nobody knows who you are. You're cutting prices. Yeah. So that's sort of the narrative that I keep talking about is like, be careful aligning yourself with the tactical work. It will constantly change. It will constantly be undercut. It is low margin. It's a volume game. And unless you're a volume player, which most of us in this game are not, then we're going to get hurt out there.

4:23So I have been preaching that because I think what's happening is not only strategy become more important, I think, especially in the small to midsize business, it really doesn't have a marketing structure, certainly no marketing leadership, that actually providing marketing leadership as a service, I think, is sort of the next level of what being strategic means. I'm curious what you think about that idea. I agree with that. However, I continue to find that leadership in general, decision making in general is at an all time low. So if the idea is that we're going to provide marketing leadership and come up alongside sales leadership, product leadership, what I'm finding is that leadership just isn't there.

5:10There's rarely a defined decision-making process. There's rarely a delegation of authority to the members of that leadership team. There's nothing that says, okay, this is the information we're going to look at and we're going to make a decision every quarter for our budget in this regard. So if that's not there, then what are you coming up alongside as a market leader? Well, I guess my point is, I agree with you. there's nothing to come alongside so why don't you bring it to them yes and and so it's a yes and i don't think your task is to bring marketing leadership i think your task is to bring leadership and you should be prepared for the first time to facilitate a leadership planning session so i i think it's one i think you need to skip or just recognize that you're you're not just leading marketing as the person that owns that space, you're also needing to facilitate, probably for the first time, a decision-making process, a planning cadence.

6:13And so you need to be well-versed in the other departments in the business. And you can't just assume that everything's going to function the way you think it should function. Oh, I think you should assume completely the opposite. Yes, assume complete dysfunction. That is the way. You know, sometimes I talk to smaller agencies and they believe that going up market, those clients are going to have their stuff together. And you and I both know that it's more chaotic the larger the organizations get, which makes it a lot easier to provide value in a strategic way because they're so dysfunctional.

6:49Yeah, it's just more meetings. That's what I've found. It is more meetings. That's correct. So let's get to your favorite topic, shall we? I know that you have been for some amount of time talking about this idea of, here's an idea. You've got a client already. Why don't you get more business out of them? Scale the relationship that you already have. So talk a little bit about, and I know you've got some success stories you could talk about, but talk a little bit about that mindset shift even. Yeah. I mean, we want to make revenue. Let's start there. We can all agree. We're at the fireplace. Cool.

7:26You get revenue from two sides of the business. You get new clients and you upsell, cross-sell to existing clients. That's the only way to get revenue. It's the only way to grow revenue. And all of the studies are showing a downward trend in the number of new meetings, a downward trend in the number of new logos coming on. It is getting harder. A person I was interviewing the other day had some study in his hand. They all do. And it was, meetings are across the board, down 30 % in 2024, and it's only getting worse in 2025. The numbers are irrelevant. Just go ask people. You and I talked to enough people.

8:00New logos are getting harder. That's the theme of 2023, 2024. Everything was sunshine and rainbows before that. So my question to everyone out there is when new logos are hard, why can't we look at upsell, cross-sell as a reliable revenue growth engine? And the reason is no one's paying attention to it. No one's incentivizing for it. No one's training for it. No one's holding people accountable. We're completely asleep at the wheel. It's as if we hired a bunch of salespeople without incentivizing them or training them. And by the way, they've never worked in sales before. That's what's going on in the agency space.

8:43All right. So let's talk about mistakes on this because that seems like a simple concept, but it also seems like there's ways to screw it up because I've seen agencies that have business development folks and they're like, no, that's my job. But they have no real relationship with the client, whereas the account manager or whoever, project manager, whatever you call them, is working with the client every day. So how do you see that working? Is it a business development function or is it train your account managers to look for opportunities? I think that if it had to be a business account function, that would be better than it is today because I don't see what you've just described, where an account executive that is responsible for a revenue quota is going, okay, I could sell to new logos.

9:30Okay, my pipeline's a little dry. What do we have for existing clients? Who can I upsell there? That is not the mindset. Because what typically happens is the principal assigns, and I say assigns in big sarcastic quotes, assigns upsell, cross sell, client retention to the services side of the business. And it's actually a no fly zone. It's a no fly zone. It's a don't go there. It's not your job. You won't be incentivized for it. Right. That's the attitude towards the sales team in an effort to make sure they focus on getting new logos. And so honestly, if we just broke down the barriers and just admitted that our service people aren't willing or able at the moment to pull their weight and upsell clients, and you just unleashed the sales team on existing clients, I think they'd get pretty far.

10:23I think they'd do pretty well. Yeah. But it's not happening. How are they going to identify the opportunities? I mean, theoretically, the account executive is in there going, oh, they should do this. We should do this. Here's an opportunity. How does a salesperson can identify those opportunities? Well, I don't care who it is, but to identify sales opportunities, you ask questions. Yeah. And right now, agencies are spending months, if not years, not asking questions at all. They're delivering reports on clicks and whatever we think the client says is their business objectives, which we're never delivering against business objectives.

10:57We're delivering some marketing metric. We're talking about the things that we have delivered. We haven't had a business conversation since the sales process. That's the reality for most clients. So I don't care who does it. I don't care what dress you put on it. I don't care if you bring in a third party. If it's sales, you come in and you say, hey, I want to ask you some questions about your business. What initiatives are you investing in across the board? Let's talk about sales. Let's talk about product. Let's talk about finance. Let's talk about anything that's not marketing. Like, let's just, let's talk about real stuff here.

11:31You ask questions, you understand what they're spending money on, and then you say, hmm, how can I add value to those business objectives? Like, that's what sales, that's sales. So that's what we got to do. So a lot of agencies structure their fees around retainers. I know how you feel about this. So I'm just going to let you have this one. Did I say that before? I don't know. So what about, what do you tell that agency says, well, we're locked into this retainer. I'll set you up. I think you think retainers are not the right way. Well, like, you know, when you go bowling and then there's the people with the bumpers.

12:11Yeah. Yeah. Yeah. Or, or, or you're riding a bike and there's training wheels. Yeah. Retainers are for the non-confident. Retainers are a trade-off. Yeah. First of all, we all know that any retainer relationship is going to get less profitable as time goes on because the client is incentivized to get more and more from you for what they're paying. Great. So profitability goes down. The other challenge is it's nearly impossible to grow or expand that account when you're on retainer because the whole point is we're on retainer and you get whatever you need from us. So there's no upsell. Now, retainer also breeds this sort of complacency throughout the entire account team.

12:52And all they're thinking about is, how do I hang on to this? It's a very defensive posture. Ultimately, the client starts to gain control. They start to set scope and tell agency what to do. You've lost control, you're done, you're going to lose that account. So you see a lot of agencies that are not confident in their upsell motion go after retainers. And honestly, I think it's a false sense of security because if a client is going to cancel after month three, they're going to cancel. The fact that you have a contract that lasts a year is completely irrelevant. They could berate you across the internet and you'll be begging to get out of that contract.

13:30So let's be real. What is much more profitable and naturally breeds upsell is projects. Everybody hates projects because you have to keep selling them. There is a middle ground. I always tell agencies, look, you want to have that long-term conversation. You want to create a roadmap that aligns with their business objectives for the course of the year, because that's when they decide how much budget is going to be allocated to, say, marketing. But what I wouldn't do is say, okay, here's exactly what I'm going to do with that budget for the course of the year. I'm going to say, look, we as as as your new marketing leader, and I know organization that you don't have a planning cadence, but as your new marketing leader, I suggest that once a quarter, we as a leadership team get together and decide how this budget will be allocated.

14:14We'll create a plan that says, here are the goals, here are the roles, the timeline, the budget considerations. And what that does is it gives you the benefit of a project because you can scope that out very defined so you maintain your margins and you maintain control of the client account. But it also forces the leadership team, the budget-holding decision makers, to come to the table once a quarter. And you sit and you listen. This sort of relates to that. We work with a lot of, I end up having a lot of conversations with agencies that feel like they can't get what they're worth. They're always in this competitive environment.

14:52How do you, a lot of times it's just they won't charge what they're worth because they're afraid they won't get the work. Yeah, honestly, step one, you don't even have to pay me. You don't have to pay John. Just raise your prices. It's a sobering exercise. There's somewhere in between what you're charging today and what you're worth. And you got to find that. But yes, that's step one for many people. Seth Godin in his last book, and I never heard it just put so succinctly, he said, you know, pricing is how you pick your clients and how you pick your competitors. And I was like, yeah, that's very real.

15:26Yeah, my dad always said, you know, if you get a yes, all you've learned is that you didn't charge enough. No is the beginning of getting to the price that they're willing to pay. We went through a period, and I don't know if we're out of it or still in it, you know, where a lot of agencies were very much trying to productize their approach, you know, package their, their approach, their deliverables, you know, that they could say, well, if we charge this for this deliverable, we know what our margin is. Where do you fall on that type of approach? I still see a lot of it. It seems like it's waning a little.

15:55Where do you fall on that? Yeah. I mean, my, my first book was how to productize your consulting services. I mean, I think the term productizes, it gets confused a lot. What I really mean is be an adult responsible service provider. You can't just say it's chaos. You can't say it's different for every client. No, grow up. You need a service process. Of course, clients are going to get different deliverables and things. But you have to decide, these are the companies I'm working with. This is the process we're going to use to deliver the value. And you have to make some decisions on what piece of the value proposition that you want to contribute to.

16:34So for years, there's been a general lack of decision-making on positioning and on service process. It's been complete chaos. So yes, I've used that term productized just to say, you deliver the same thing to the same people for the same price, or you don't have a business. You have operational chaos. What I've, I guess what I've seen is, yes, more and more companies have done that. And let's say 10 years ago, sales consultancy world was very mature in this area. the world did not need another sales methodology. There was 25 million books on this is the sales methodology. And clients got tired of that.

17:10They were like, look, I don't care what your methodology is. Just what are you going to do for me? Marketing was about 10 years behind. We had 10 years of taking chaos into these named methodologies. And this is our inbound thing. Now every buzzword in the English language has been claimed. Clients are fatigued. Yes, I think there's no longer this, proprietary named thing. So no, I don't think there's that lure to it from a sales standpoint, but you still need to create that product mindset within your services team to get repeatable operations, to be able to set and meet expectations with clients.

17:52You still have to do it. You're not putting it in bright lights and going, look at what we can do. It's like, yeah, look, AI can tell me that too. All right. So your answer may be don't. But if somebody were listening to this and saying, I'm going to start a consulting agency today, what would you tell them? Where would you tell them to go? What would you tell them they have to be thinking about? What would you tell them they can't possibly do? Well, the first thing I would do is ask myself, where do I have experience? My grandfather always said, you have to know the territory. And the worst thing that people do, like you have perfectly capable business owners out there that start agencies, but they go through this phase of, oh, we're going to see what works.

18:37and they ask for some referrals and they'll spend years in chaos not really developing an identity for themselves and whatever identity they do develop is completely tactical, replaceable, marginalized by people in decision-making seats. So they have to just look at their career and say, what business acumen do I have? Okay, I'm going to do that. And they have to make that scary decision. And when they make that scary decision, you got to spend the first year talking to as many people as you can in that space. Figure out what they need. Do that for them. Those are the basics that I just don't see people doing.

19:16I think you can develop an incredibly successful business if you A, choose your target market, and B, are relentless about speaking to them, understanding what their needs are. Those two things, I think you're good. I think agency is in a great place, but not for most, given the mindset that I encounter, you know, day in and day out. Said a billion times, people don't care, don't want what we sell, they want their problem solved. I think that's what we have to continue. Yeah, so you are problem finders. So you got to pick your thing, you got to go figure out what their problem is, and then you got to help them solve the problem.

19:53I would still say that, you know, there are two steps to solving a problem. It's helping the client understand how to solve that problem. That I think is where the money is. That's selling knowledge, that's selling expertise. then there's the doing of that thing that's the commoditized area that's either going to be by ai or you know shark price chops chum water with whatever generation is entering the market now i don't track of it but those guys those yeah whatever comes after z i don't know what comes after z right do we start over yet but they're out there that's right awesome well max it was awesome for you to stop by the duct tape marketing pockets.

20:34There's some place that you'd invite people to find out more about your work and connect with you as a great new social network. LinkedIn. Yeah. Okay. Yeah. Max trailer, LinkedIn. I'm always saying opinionated things and posting videos. Yeah. No, your, your feed is, is lively and interesting. How's that? Thank you. That was a compliment, huh? Yes. I took it as such. Okay. That's how it was made as well. Again, thanks for stopping by. Hopefully we'll run into you one of these days out there on the road. Cheers.