Struggling to implement AI to help streamline your SEO strategy? Click here to get matched with top marketing agencies who can help.

With the explosive growth of artificial intelligence (AI) technology in recent years, many businesses, marketers, and others trying to master search engines are wondering about the current and future impact of AI on SEO.

In this article, we are going to discuss AI’s impact on SEO and deconstruct the theory, ethics, and power of these changes. Read on to learn about how the digital landscape is adjusting to changes brought on by artificial intelligence. 

The Impact

AI’s impact on SEO has been significant, to say the least. With the advent of cutting-edge AI technologies, SEO has undergone transformational changes. Some of these evolutions include:

Enhanced Search Algorithms

AI technologies, including machine learning and deep learning, have played a pivotal role in advancing search engine algorithms. These sophisticated algorithms are designed to better understand and interpret user search intent, context, and relevance. By leveraging AI capabilities, search engines can analyze various signals, such as search history, user behavior, and content attributes, to provide more accurate and personalized search results.

The integration of AI in search algorithms has led to significant advancements in areas such as semantic search, natural language processing (NLP), and machine comprehension. AI algorithms can now decipher the nuances of human language, including synonyms, context, and sentiment, enabling search engines to provide more precise and contextually relevant search results.

Voice Search Optimization

The proliferation of voice assistants and smart speakers has ushered in a new era of voice searches. As users increasingly rely on voice commands to interact with technology, AI-powered natural language processing (NLP) capabilities have become essential for search engines to comprehend and effectively process voice queries.

AI-based NLP algorithms enable search engines to understand conversational language patterns, context, and user intent. They can decipher the meaning behind spoken queries, taking into account factors like tone, inflection, and natural language variations. By leveraging AI, search engines can provide more accurate and contextually relevant results for voice searches.

To optimize their content for voice search, SEOs need to consider specific strategies. One crucial aspect is incorporating long-tail keywords that match the way users speak naturally. Voice searches often involve more conversational and colloquial language compared to text-based searches. Therefore, understanding and incorporating these conversational phrases and queries into content is vital.

Additionally, structured data markup, such as schema.org markup, plays a significant role in voice search optimization. By providing structured information about entities, events, products, and more, SEOs can help search engines understand and present relevant information in voice search results.

Data Analysis and Insights

AI has revolutionized data analysis by its ability to quickly process vast amounts of data, providing valuable insights for SEOs. AI-driven analytics tools can analyze various aspects of SEO, including website performance, user behavior, and market trends, enabling SEO professionals to make data-driven decisions and optimize their strategies effectively.

AI algorithms can efficiently process and analyze complex datasets, extracting meaningful patterns and correlations that might be difficult for humans to identify manually. By examining website performance metrics, such as page load times, bounce rates, and conversion rates, AI-driven analytics tools can pinpoint areas for improvement and optimization.

Moreover, AI-powered tools can analyze user behavior, including click-through rates, navigation patterns, and engagement metrics, to gain a deeper understanding of how users interact with a website. These insights allow SEO professionals to optimize the user experience, identify opportunities to increase engagement and refine conversion strategies.

In addition to analyzing website-specific data, AI can also analyze broader market trends and competitive landscapes. By monitoring industry trends, keyword popularity, and competitor strategies, SEO professionals can identify emerging opportunities, stay ahead of the competition, and adjust their SEO strategies accordingly.

The data analysis facilitated by AI can help SEOs identify patterns, opportunities, and areas for improvement in their strategies. It empowers them to make informed decisions based on data-driven insights rather than relying on intuition alone. By leveraging AI-driven analytics tools, SEO professionals can optimize their websites, content, and overall SEO strategies to enhance visibility, increase organic traffic, and improve search engine rankings.

User Experience and Engagement

AI technologies have significantly enhanced user experience on websites, providing personalized interactions and improving engagement. Through the use of AI-powered algorithms, various aspects of user experience can be optimized to cater to individual preferences and behavior.

Personalization algorithms leverage AI to analyze user data, including browsing history, search patterns, and demographic information. By understanding user preferences and interests, these algorithms can deliver customized search results, product recommendations, and targeted advertisements. This level of personalization creates a more tailored and relevant experience for users, increasing their engagement and satisfaction.

AI-powered chatbots and virtual assistants are other valuable tools for improving user experience and engagement. These intelligent virtual agents can provide instant and interactive customer support, guiding users through their queries, troubleshooting issues, and offering personalized recommendations. By offering real-time assistance and addressing user concerns promptly, chatbots and virtual assistants enhance user engagement and satisfaction.

The Changes

AI has brought along several changes to SEO that are notable and impact many people in the SEO and digital marketing industries. These changes include: 

Content Creation and Optimization

AI-powered tools can assist in content creation and optimization. Natural language generation (NLG) algorithms can automatically generate content based on specific parameters, such as product descriptions or blog posts. AI can also optimize content by analyzing keywords, topic relevance, and readability, helping to improve SEO performance. Additionally, AI can assist in generating important on-page elements that are crucial for SEO success, such as meta tags, headings, and other relevant components.

While AI tools like ChatGPT have simplified the content creation process, SEOs have raised valid questions regarding their impact on SEO. Here are a few considerations:

Content Quality and Relevance: AI-generated content may lack the depth, nuance, and context that human-created content can provide. SEOs should ensure that AI-generated content meets the standards of quality, relevance, and value that search engines and users expect. It’s important to review and edit AI-generated content to ensure it aligns with SEO goals and delivers a positive user experience.

Unique and Original Content: Search engines prioritize unique and original content. AI-generated content might produce text that resembles existing content on the web, potentially leading to duplicate or low-quality content issues. SEOs should verify the uniqueness and originality of AI-generated content to avoid negative SEO consequences.

Keyword Optimization: AI can assist in keyword optimization by analyzing keyword density and relevance. However, SEOs should be cautious to not rely solely on AI tools for keyword research and optimization. A human touch is still crucial to understand user intent, identifying long-tail keywords, and ensuring the appropriate placement of keywords within the content.

User Engagement: While AI-generated content can be helpful, it’s essential to prioritize user engagement. Content created solely for search engines may lack the emotional connection and storytelling that resonates with users. SEOs should strike a balance between optimizing for search engines and crafting compelling content that captivates and engages the target audience.

Monitoring and Adaptation: SEOs should closely monitor the performance of AI-generated content. Analyzing metrics like organic traffic, bounce rates, and user engagement can provide insights into how well the content is resonating with the audience. Based on the data, adjustments may be necessary to optimize AI-generated content for improved SEO performance.

Ultimately, while AI tools can streamline content creation processes, SEOs should carefully assess the impact of AI-generated content on their specific SEO strategies and goals. A combination of AI-driven assistance and human expertise can help strike the right balance between efficiency, quality, and SEO effectiveness.

Ethical Considerations of AI and SEO

Ethical considerations are crucial when integrating AI technologies into SEO practices. These considerations include transparency and disclosure, bias and fairness, user privacy, authenticity, and more.

Transparency and Disclosure: SEO professionals should be transparent about the use of AI technologies in their SEO strategies. Users should be informed about any AI-driven processes, such as AI-generated content or AI-powered optimization techniques. Clear disclosure helps maintain trust and transparency between SEO teams and users.

Bias and Fairness: AI algorithms can inadvertently perpetuate biases present in the training data. SEO professionals should be aware of potential biases and actively work to minimize them. Ensuring diversity in training data and regularly evaluating algorithm outputs for fairness and inclusivity can help mitigate biases and promote equal opportunities in search results.

User Privacy and Data Protection: AI-powered SEO tools may collect and analyze user data to personalize search results and improve user experience. It’s essential to handle user data responsibly, adhering to privacy regulations and industry best practices. SEO practitioners should clearly communicate data collection practices and obtain user consent when required.

Authenticity and Misrepresentation: AI technologies can generate content that mimics human writing, raising concerns about authenticity and misrepresentation. SEO professionals should ensure that AI-generated content is clearly identified as such and not presented as the work of human authors. Maintaining authenticity in content creation is vital for building trust with users.

Accountability and Oversight: While AI can automate certain SEO tasks, human oversight, and accountability remain crucial. SEO professionals should take responsibility for the actions of AI technologies and actively monitor their performance. Regular evaluation and auditing of AI-driven processes can help identify and address any potential issues or biases.

Impact on Workforce: The integration of AI in SEO may lead to concerns about the impact on employment and the workforce. SEO professionals should consider the potential effects on job roles and responsibilities, upskilling opportunities, and the ethical implications of AI-driven automation. Ensuring a smooth transition and addressing any potential workforce challenges is essential.

Accuracy and Factuality: Maintaining the accuracy and factuality of information presented in AI-powered SEO is of utmost importance. While AI technologies can streamline processes, it’s crucial to ensure that the generated content and search results are reliable, verifiable, and based on trustworthy sources. SEO professionals should prioritize using reputable and authoritative sources, fact-checking information, and implementing quality control measures to safeguard against misinformation and inaccuracies.

The Future

The future of AI and SEO holds great potential for further advancements and evolving strategies. While it’s impossible to predict the exact trajectory, SEO professionals have made several predictions:

Evolving SEO Strategies

AI will continue to play a pivotal role in shaping SEO strategies. One emerging concept is “predictive SEO,” where AI algorithms analyze historical data, user behavior, and market trends to anticipate future search patterns and adjust SEO strategies accordingly. This proactive approach can help SEO professionals stay ahead of the curve and optimize their efforts for anticipated changes in search algorithms and user behavior.

Artificial Intelligence Engine Optimization (AIEO)

AIEO specializes in optimizing content to address users’ common questions, enabling businesses to provide direct answers and boost their visibility in search engine results pages (SERPs). By leveraging AIEO strategies, businesses can increase their chances of securing this highly coveted spot and attracting valuable organic traffic. 

So, what does the ascent of AEO signify for the future of SEO? It’s probable that the two will become more closely intertwined, requiring businesses to prioritize both types of optimization for organic search success. Instead of viewing AEO as a substitute for SEO, it should be regarded as a complementary strategy that enhances overall search performance. 

Search Engine Algorithm Updates

As AI continues to evolve, search engine algorithms, particularly those of Google, will likely undergo further updates. These updates may leverage AI technologies to better understand user intent, improve search relevance, and combat spam. SEO professionals will need to stay informed about these algorithm changes and adapt their strategies to ensure their websites maintain high visibility and rankings.

Google’s Search Generative Experience

In 2023, Google rolled out a new generative experience in Search Labs for select beta users. Harnessing the power of advanced generative AI in Google Search, Google is revolutionizing the search experience by reducing the effort required to find information. This means users can gain a deeper understanding of topics quickly, explore fresh perspectives and valuable insights, and accomplish tasks with greater ease than ever before.

Other search engines like Bing and Yahoo! are also likely to release similar technologies in the future, changing the nature of search.

AI has made many powerful changes in SEO already, and the future of digital marketing is constantly evolving. SEO professionals are continually adapting to the impact of AI and innovating ways to utilize AI for SEO practices.

Work with Credo to Find Top SEO Teams

The importance of SEO cannot be underestimated and AI is not a replacement for a highly qualified team of SEO professionals. In today’s modern age, every business can benefit from an effective SEO strategy. The right SEO team will understand how to utilize AI in the best ways to drive strong results for your business. 

With Credo, you can find the perfect SEO agency that can deliver the results you need swiftly. Benefit from our extensive experience in agency matchmaking and receive free, no-obligation introductions to qualified agencies. Enhance your outcomes by partnering with a top-tier, pre-vetted SEO agency. Start your journey towards success today with Credo. 

  

The post AI and SEO: The Impact, Changes, & Future appeared first on Credo.

Looking to hire an SEO agency in Houston? Click here to get matched with specialized digital agencies specific to your brand’s needs.

Are you looking for a Houston search engine optimization (SEO) company? With so many options available in Space City, it can be difficult to determine which agency is right for your business.

In this article, we offer some quick tips on how to find the best agency — regardless of location. To finish up, check out the list of the top-rated digital agencies in Houston.

Quick Tips for Vetting Houston SEO Companies

In a sea of options, choosing the right SEO partner can be a daunting task. But narrowing your search to a specific area, like Houston, can make the decision-making process easier. 

Three Questions to Help Start Your Search 

1. Are you based in Houston and looking for a local SEO agency that has a deep understanding of your market?

1. Are you targeting clients in Houston or the greater Texas area and in need of an agency that can provide insights into your ideal audience?

1. Is it important to hire an SEO agency that can deliver an authentically Houston flair to represent your brand voice and marketing efforts?

If you answered yes to any or all of these questions, you can find Houston SEO experts to match your needs on the Credo Platform. Let’s cover some of the best ways to vet SEO agencies before we dive into the list of top digital providers in Houston.

Assessing an SEO Marketing Agency’s Website

One of the first steps in finding a reputable local SEO agency is to assess their website. As you begin comparing options, here are some things to look for:

• Is their website easy to navigate and visually appealing?
• Do they have a blog? If so, are the articles informative and well-written?
• Do they have case studies or testimonials on their website? 

Together, these factors can be a good indicator of the agency’s experience and success.

Asking Questions in an Intro Call

Once you’ve bookmarked a few potential SEO agencies, it is important to schedule an intro call. Think of this as a question-asking mission. To that end, here are some good questions to ask a digital marketing firm about SEO:

• What is your process for conducting keyword research and on-page optimization?
• Do you have examples of successful SEO campaigns or case studies?
• How do you measure the success of an SEO campaign?
• How do you stay up-to-date with the latest SEO trends and algorithm updates?
• What is your approach to link building?

A good approach is to ask these questions to each potential agency. You then have a good reference of what each agency options and who stands out from the rest. 

The Best SEO Agencies in Houston

Now that you have a list of good questions to ask during an intro call, we’ve compiled a list of the top Houston agencies to help you get started on your search. Take a look at your options, narrow down your finalists, and drop us a line if you have any questions.

1. Zyne Ventures

Zyne Ventures offers customized technology and digital solutions that help clients lead their industry in innovation, efficiency, and cost reduction. From platform development to UI/UX design, their team of experts adds creativity to problem-solving. With a team of experts in SEO, website and application development, UI/UX, and graphic design, Zyne Ventures adds creativity to problem-solving, setting it apart from others.

Location

9494 Southwest Fwy Suite 450-Q, Houston, TX 77074

1. Houston Digital Marketing

Houston Digital Marketing is a premier SEO services firm in Houston with a proven track record of success. The team specializes in web design, blog writing, local SEO, social media management, and video production. Their SEO team of experts has the knowledge and experience to help your business grow online. With years of experience in marketing, they know how to get your website seen by the right people and generate leads that convert into sales.

Location

18711 Egret Bay Blvd APT 416, Houston, TX 77058

1. ASTOUNDZ

ASTOUNDZ is a Houston-based company that specializes in SEO and Website Design & Development. The business offers both local and national SEO campaigns to drive relevant traffic to websites. In addition to SEO, ASTOUNDZ also provides services in PPC (pay-per-click), web application development, and social media marketing.

Location

4501 Brookwoods Dr, Houston, TX 77092

1. MARION Integrated Marketing
   

MARION helps businesses grow through strategic SEO improvements, ensuring their website appears at the top of relevant online search results. Effective SEO establishes a strong foundation for internet marketing success, making it more likely for target audience members to choose their business when making purchase decisions.

Location

7026 Old Katy Rd Suite 249, Houston, TX 77024

1. EWR Digital
   

EWR Digital prides itself on delivering results and taking an unconventional approach. With over 20 years of experience, clients have deemed them the best SEO company in the United States, thanks to guaranteed SEO results. The agency’s team of experts employs the latest SEO best practices to optimize clients’ websites, resulting in improved search engine rankings.

Location

13105 Northwest Fwy Suite 765, Houston, TX 77040

1. TopSpot

TopSpot offers a top-shelf range of services such as SEO, PPC, web design & development, and analytics solutions that prioritize accountability and business growth. For the past two decades, Houston businesses of all sizes and across various industries have relied on TopSpot’s digital strategies to transform and grow their business online.

Location

515 Post Oak Blvd #300, Houston, TX 77027

1. BERK Labs

BERK Labs is a comprehensive consulting agency that offers data-driven SEO strategies with the aim of marketing Houston businesses and helping them achieve objectives such as launching new products, entering new markets, acquiring loyal customers, operating more effectively, raising venture capital, hiring teammates faster, and building for the future.

Location

12333 Sowden Rd Suite b, Houston, TX 77080

1. INFINI Marketing

This Houston-based agency aims to grow businesses through its MAPS program, which offers digital advertising, SEO, web design, branding, graphic design, photography, and videography services that are designed to deliver proven and results-driven outcomes. Reach your business goals with INFINI Marketing.

Location

5718 Westheimer Rd Suite 1175, Houston, TX 77057

1. GBC Digital Marketing

A Houston-based, woman-owned digital agency that offers web design and SEO services to help local service providers dominate their market. They use a proven system tailored to each client’s specific goals and have won multiple awards and certifications from Google, Bing, SEMRush, WebAwards, and the Better Business Bureau.

Location

3505 Graustark St, Houston, TX 77006

1. Forthea

Forthea is a digital marketing agency based in Houston, Texas. With expertise in SEO, paid search and social, and web design and development, Forthea helps brands transform their digital marketing effectiveness, eliminate wasted spend, and prove campaign ROI through a focus on results-driven campaigns that generate new selling opportunities.

Location

2727 Allen Pkwy #1200, Houston, TX 77019

1. Actual SEO Media, Inc.

Actual SEO Media is a Houston-based online marketing agency that specializes in high-quality local SEO services, providing clients with a team of website designers, content writers, and SEO specialists to drive organic growth and improve web presence through trusted techniques.

Location

1880 S Dairy Ashford Rd Suite 682, Houston, TX 77077

1. AdsRole

AdsRole is a Digital Marketing Agency that has won awards for its work. The company specializes in professional SEO services to improve a website’s organic search score, even in highly competitive keyword areas. AdsRole also provides website design and development services, with a focus on making websites customer-centric and improving the user experience. The team aims to offer these services at an affordable price.

Location

700 Smith St #61070, Houston, TX 77002

1. On-Target! Marketing & Advertising

Going on 20 years, On-Target aims to initiate a transformation in its clients’ business with its extensive range of services. Their team of experts helps in generating leads and achieving powerful results with speed and efficiency. The company provides services in inbound marketing and sales, web development, SEO, PPC, social media management, content writing, and any other digital strategies that can help grow your business. 

Location

1334 Brittmoore Rd, Houston, TX 77043

1. SiteJab

At SiteJab, the team understands the importance of generating leads through effective digital marketing strategies. With a focus on SEO and PPC advertising, SiteJab helps businesses reach their target audience and drive traffic to their websites. By utilizing customized lead generation strategies, SiteJab ensures that leads are not only coming in but are also qualified and ready to convert into customers.

Location

1210 W Clay St Suite 25, Houston, TX 77019

1. Elevato

The experts at Elevato have the digital marketing skills to deliver on any project. The full-service digital marketing agency boasts over 1,552 websites launched and 5,374 stunning marketing campaigns created across their 35+ years of experience. Their service offerings include Web Development, Content Creation, Paid Media, Brand Design, and more. Elevato has worked with clients in a multitude of industries, including Education, Entertainment, and Healthcare. This agency can create beautiful and powerful digital solutions for any company’s needs.

Location

Remote

Final Thoughts

Finding the right SEO agency in Houston is no small feat. After all, everything really is bigger in Texas. But by assessing a marketing agency’s website and asking the right questions during an intro call, you can narrow down your options starting with those on this list. 

If you aren’t sure if you need a geographic-specific digital agency, don’t play the guessing game. Credo digital matchmakers offer free consultations to help you make that decision in confidence.

The post How to Find The Best SEO Agency in Houston appeared first on Credo.

Looking for a new digital agency to help create your lead generation magnet? Schedule a free marketing evaluation with our team to meet the right agencies fast. It’s fast, free, and we get it right.

“You need to do content upgrades!”

“Build your email list!”

You hear this advice all the time but it’s rarely actionable.

Questions To Answer About Your Content Upgrades

Even when you know it’s an effective strategy for growing your email list, you’re usually still left with more questions:

1. What content should you create?
2. How do you convert people?
3. What email service should I use?
4. What do I do with them after they sign up?
5. How do I actually turn them into customers?

These are all very valid yet also very surmountable problems.

But I’m going to assume that you have the first four taken care of. If you don’t:

1. Answer the questions people have asked you or teach them how to do what you do (which is the highest ROI you’ll ever have on content marketing);
2. Merchandise signups across your site, and put your highest impact piece of content on your homepage above the fold;
3. We recommend Drip, but there are many you can use. Just make sure it has automation and tagging so that you’re not paying double for subscribers who sign up for more than one piece of content;
4. Keep them engaged with follow-on emails, case studies, and content they’ll enjoy;
5. Let’s go over that now!

One of the highest leverage things I’ve done on Credo in the last month was all implemented in one email. Seriously

Here’s my Credo podcast episode about it (subscribe on iTunes!):

Here’s the strategy:

1. Create a content upgrade that people can sign up for. This content upgrade should hit your target market exactly and be near the bottom of your conversion funnel;
2. Send them the content (and drop them onto a conversion page where they can click to download. This also lets you track conversions in Google Analytics);
3. 12-18 hours after they convert, send them a plain text personal (yet automated) email asking them if they are looking right now for what you offer.

It’s that simple. Here’s how it is set up within Drip for me:

And here’s the exact text I automatically send:

Hey, are you looking to hire an outside provider to help you with your digital marketing?

John

That one question and one email have generated multiple thousands of dollars in revenue in the last month.

Enjoy the podcast episode, and leave your questions in the comments!

The post How to Turn Content Upgrades Into Profitable Lead Magnets appeared first on Credo.

Ready to finally find the right digital agency for your brand? Schedule a free marketing evaluation with our team to meet the right agencies fast. It’s fast, free, and we get it right.

“I know they’re the expert, but I want them to just work on building me backlinks and not touching my site until they prove that they can build links. The last guy wanted to do both, but I just wanted him to build links.”

I wish I had a dollar for every time I’ve heard this. This recent conversation with a business owner who was looking to hire a marketing provider through Credo had just come out of an engagement that was not successful, but they were not willing to change their approach in order to find another provider who could actually deliver the results.

How To Hire The Right Digital Agency

Would this be you? Have you had a bad experience working with a digital marketing agency in the past, and now that you’re free you’re scared to hire again?

We’ve seen this all too many times at Credo. A client comes to us because they were trying to grow their business (through SEO/content/ads) and so they hired an agency or consultant that ultimately was not able to deliver.

When that happens, I see one of two things happen:

1. They’re scared to hire again and want to start off with too small of a budget (when they can afford more) to “see ROI before I invest anything”; or
2. They understand that the previous engagement had reasons why it didn’t work out (usually a combination of factors involving budget, communication, and strategy) and they take a step back to think about it more deeply so that they can move forward with a new engagement that will get their business the needed results.

If you’re in this position, then I encourage you to listen to this 10-minute podcast episode I recorded (either below or on iTunes) all about how to approach hiring if you’re in this position.

You’ll learn:

1. Why engagements often don’t work out between businesses and marketing providers;
2. The questions you should be asking before you sign a contract;
3. Why I don’t believe starting with a small budget is the way to go.

Have a listen, and leave your additional questions in the comments!

The post How to Hire The Right Digital Agency After A Bad Experience appeared first on Credo.

I was speaking with a marketing agency recently about what they do and who they do it for.

As I spoke with them, I was looking at their website.

Their website had generic pages like “SEO services” and “Digital Transformation”, but didn’t actually say anything about the types of work they do – or who (brand, vertical, industry) specifically they create the best results for.

When I asked them about it, they said “Oh yeah, you know the cobbler’s kids. We’re so busy working on clients that we don’t have time to keep up our website.”

(Image Credit – Search Engine Land)

…says every digital agency ever to open up shop. 60% of all businesses, in fact.

(Smells like… opportunity.)

The reality is that this agency is struggling to close work because its website is so generic. Generic doesn’t help their site visitors answer the “Is this solution right for me?” question. 

In this episode, you’ll learn:

1. Why action trumps everything, every time;
2. Why the cobbler’s kids’ excuse doesn’t check out;
3. How to overcome mental blocks with a challenge I give at the end.

Ready to finally optimize your website for success? Yes! I’m ready to take action.

And don’t forget to subscribe on iTunes and rate the show! 

The post How To Be Successful: Take Action [CredoCast] appeared first on Credo.

Are you a business that focuses on your local area? If so, then this video is for you because I go deep with local marketing expert Greg Gifford.

What we cover

In this video, we cover the following:

• Minute 05 – The difference between nationwide and local marketing
• Minute 06:10 – How searches change based on where you’re located
• Minute 7:25 – My pizza story – why local SEO is important
• Minute 11:25 – I do some searches in my area to show differences in volume
• Minute 14:47 – How Google is kind of like a toddler
• Minute 23 – Google My Business
• Minute 25 – Does content matter for local businesses?
• Minute 31 – Will a non local area phone number hurt my local SEO rankings?
• Minute 32 – Does an address?
• Minute 37 – Why $500 a month is way too little to pay for SEO (or any other digital channels)
• Minute 38 – Why a local business should not be spending less than $2,500/mo. The math just doesn’t work.
• Minute 39 – Why “how much should we spend” is the wrong question to ask.
• Minute 41 – It’s not about how many leads you need, it’s which type of leads you want so then you can determine the right budget.
• Minute 43 – What I’ve learned about pitching work and pricing it (for the agencies out there.

About Greg

Greg is an experienced Local SEO consultant specializing in the automotive industry. An experienced conference speaker, his movie-themed slide decks are always audience favorites.

Find him:

• Twitter
• LinkedIn
• SearchLab Digital
• SearchLab on Credo

Full transcript

Coming soon…

John Doherty:

Hello, everyone. Welcome back once again. My name is John Doherty. I’m the founder and CEO over here at Credo, where we help great companies find and hire the right digital marketing agency. Speaking of digital marketing agencies, I have one with me today.

John Doherty:

I’m trying to develop a lot more content like this by digital marketing agencies talking with me, talking with you, educating you about marketing, how do you budget for marketing? How do you think about doing marketing for your business? And today we’re focusing specifically on local businesses.

John Doherty:

So I’ve been thinking about local businesses a lot. And by local, I mean like location bound businesses. So you might be in one location, in Dallas, right? Where my friend Greg who’s with me is located, or you might have locations in five different states, in different cities. But basically your business serves people in a specific geographic area.

John Doherty:

So maybe you’re a dentist or you’re an HVAC company, or you’re a real-estate agent or you’re an auto-dealer or something like that. So those are the kinds of businesses that we’re talking to here. So today I have with me Greg Gifford, who is with SearchLab Digital. So Greg is an old friend of mine actually in the digital marketing industry. Man, we’ve known each other, what? 10, 11, 12 years, something like that.

Greg Gifford:

Yeah, easy.

John Doherty:

It’s been a long time. Our dogs have played together. Our kids have played together. It’s a long running friendship, relationship. But Greg is the guy when it comes to local businesses and local digital marketing. He’s got a long storied history. So I’m super, super happy to have him here today. We’re going to get into the conversation here in just a second.

John Doherty:

But Greg, if you would, introduce yourself to the audience, tell us who you are, tell us your quick background and tell us what you love doing when it comes to marketing local businesses.

Greg Gifford:

So like he said, I’m Greg, I’m the VP of Search at SearchLab. We’re a boutique agency, and all we do is locally focus marketing. I’m lucky enough to be a popular speaker, so I get to speak at conferences all over the world. Not so much lately, thanks to COVID. But when COVID hit last year, even though it was only March, when they started closing events down, I already had 28 conferences booked in eight different countries.

Greg Gifford:

So I get to go all over the world on a lot of cool trips. And I really do that not as much for business because we only really serve customers in North America. We could do international customers, but really I do that because I love to help people be better. Hey, if you’re not going to buy for me at least don’t buy from somebody that you’re going to waste your money.

Greg Gifford:

I want to speak at these conferences to help people understand, here’s what it takes to be better and grow your business. You know I was speaking at Pubcon last week in Florida, and the other guy presenting with me was Damon Gochneaur, another guy that we’re all friends with. And one thing that he said, that’s great about working with local businesses really kind of hit home is that, you’re not working with some multinational corporation, that it’s just a line item.

Greg Gifford:

When you help somebody grow their business, they get to buy a bigger house, or buy a better car, or put their kids through college. So you’re making a real world on somebody’s life. And so that really kind of hit home, because that’s really what it is. I enjoy helping people be better because it really affects those people’s lives.

John Doherty:

Yeah, that’s awesome. I love that. And it’s funny, you mentioned Damon because the shirt I’m wearing today, Damon actually sent me from his [inaudible 00:03:14] in Dallas. So shout out to Damon there at Spiro Digital. So yeah. Greg, today, we’re obviously talking about local marketing. We’re talking about digital marketing for local businesses.

John Doherty:

Obviously local businesses they often have like a physical location. Maybe they have a sign out front, that kind of thing. They’re getting more referrals from local people. But when it comes down to getting found online, as a local business, what is different about local marketing? We’re going to talk a lot about SEO, search engine optimization, and Google ads, pay-per-click, Facebook ads, that sort of thing.

John Doherty:

What is different about that than like a nationwide, just digital business is going to be doing? Right? Because my background is all with working with nationwide, right? Like companies. I did some local years ago, but it was like scale thousands of hotels.

Greg Gifford:

Sure.

John Doherty:

So, we can talk about franchise if we want to, but what is different about local specific marketing than nationwide campaigns? What’s the mindset that people need to kind of adopt when it comes to investing in digital for local?

Greg Gifford:

Well, it’s a different way of looking at things, because most of the time businesses know I need to do digital marketing, and it’s just digital marketing as a whole. And there’s subsets in there. You’ve got paid search, you’ve got social media ads, and you’ve got SEO. But in each of those areas, there’s still a difference between not having a geographic focus and having a geographic focus.

Greg Gifford:

Most people are going to look at SEO. I need to do some stuff to my website to get it to show up better in Google, or I need to do paid search ads that will show up in Google. And they don’t think about any sort of geographic focus, because a lot of businesses, if you’re an e-commerce business, you’re a nationwide business, you just need to show up.

Greg Gifford:

But if you’re an HVAC guy in Dallas, or a car dealer in Denver, or a plastic surgeon in LA, you don’t really… I’m sure maybe somebody might fly across the country to see you if you’re a plastic surgeon, but for car dealerships, for doctors, for dentists, for HVAC guys, for plumbers and electricians, you don’t need to show up outside of area, you only need to show up in one particular geographic area.

Greg Gifford:

So there’s different things that you need to do with your ads, whether it’s Google ads, or social ads, and with SEO, it’s actually a different algorithm in Google that returns those results. So it’s different signals that the algorithm looks at. So some sort of SEO is always going to be beneficial. But if you did like a Venn diagram where you’ve got a circle here for the traditional SEO, and a circle here for SEO that focuses on local, the area of overlap is what benefits you.

Greg Gifford:

But if you really need local SEO and you’re doing regular SEO, it’s just that sliver, that overlaps where if you do local SEO, you’re including all these additional signals that regular SEO doesn’t look at. And the way that I like to illustrate this is, it’s easier to think of real world examples.

Greg Gifford:

So if your office is in downtown and you sit down at your computer, open up Google, type in two words, pizza delivery, you get a list of the pizza spots that are right there by your office. But then let’s say you live in the suburbs 30-minutes away. You can do that same search when you go home at night with the same two words and you get completely different results.

Greg Gifford:

And most people don’t really think about that, because you’re not going to do a search like that, but you could type the exact same search phrase into Google and get vastly different results based on your location. Because Google understands, if I need a pizza delivered, it’s not going to be showing me the pizza place in Detroit that has the best website in the entire world, because I’m not going to get a pizza delivered from there. It’s only going to show me localized results.

Greg Gifford:

So it uses those extra signals, and that’s where people can kind of start to go. “Okay. Yeah. That makes sense”. If you’re a plumber or an HVAC guy, you don’t need to show up across the entire state, you need to show up in the town that you can actually service.

John Doherty:

Right. Totally. Yeah. And just thinking about like myself as a buyer, I live in Denver, Colorado, right? And basically like downtown is here, I live here and my in-laws live out here. Funny story for you is a year or so ago, my in-laws, they had just moved into a new house, and my mother-in-law ordered pizza for us to pick up on our way to their house.

John Doherty:

So this chain, it’s like, it’s a Denver local chain. They have two, three different locations. There’s one in Cherry Creek, which is on the other side of downtown for me, and then there’s one out like basically Westminster, which is on the way to my in-law’s house. She ordered from the one in Cherry Creek, which is the opposite direction. And we only found that out when we went to the one in Westminster, right?

Greg Gifford:

And they didn’t have your pizza.

John Doherty:

And they didn’t have our pizza. Right? And he’s like, “Oh, well that went to cherry Creek”. I’m like, “Well, I’m not driving 30 minutes that way to pick up a freaking pizza, then drive 50 minutes back”. Right? It’s like “I want it here”. So, super, super important.

John Doherty:

I think an interesting thing that you brought up Greg at the start there was, like let’s talk auto for a second, because I’m a car guy and you’re the auto dealership SEO guy. In the industry like a year ago, a year and a half ago, I was looking for a new car. Right? My old car, my old 2008 Audi was not on its last legs, but had a lot of miles and I was looking to get something bigger. And we just bought property up in the mountains.

John Doherty:

I was like, “All right, I’m going to get pickup truck”. And so, I was looking and I didn’t necessarily need the dealer that is 10 minutes up Federal Boulevard from me, the Toyota dealer there. I wanted to see where are all the Toyota Tacomas in basically the Metro area. Right?

John Doherty:

And actually, I mean, this was last year before we even used cars went crazy. I actually ended up buying it from a place up in Greeley. I found it on Facebook marketplace. Right? Well, once again, that’s local and yeah, it’s 15 minutes away, 45 minutes away, but they had the truck that I wanted, that I’d been looking for for three months, I was willing to drive 50 minutes to go buy it. Right?

John Doherty:

But I didn’t care that they are in the Sloan’s Lake Area of Denver, West Denver, I just cared that they were in the Denver Metro Area and I could go get it. Right? And so that’s kind of the mindset for thinking about it. And I, a lot of times talking with businesses, especially local businesses or any type, that they focus on kind of the fringe. It’s like, “But I’m a Porsche dealer. What about the people that are looking for the specific Porsche that I have in Denver?”

John Doherty:

Okay. That’s fine. But if you look at all the auto, like the auto aggregators, right? And I used to work in real estate. So like the auto versions of Zillow, et cetera, the CarGurus, Autotrader’s et cetera, a lot of them are going to allow you to get outside of like, you can search within 50 miles, and I can also search nationwide, because if I’m a Porsche collector, and there’s five of them per sale in the country, and I have the money to buy that Porsche, I’m going to be willing to fly there and buy it. Right?

Greg Gifford:

But you’re also going to find it no matter.

John Doherty:

[crosstalk 00:09:51] local people. Right. Exactly. Exactly. Yeah. So basically market to the people that are within your area, right? Your 25 miles, your 50 miles, whatever that is, because the people that really want to find you are still going to find you.

Greg Gifford:

Or the other way to look at it too is, take a couple of your keywords and do searches for the phrases that either you know are important to your business, or if it’s a different phrase that a customer would search for, that you’d want to show up for that, search for some of those, and don’t enter any sort of geographic phrase.

Greg Gifford:

So don’t say, Toyota dealer Denver, just say Toyota dealer, or just say used car dealer, or just say HVAC repair, or just say toilet repair, plumbing, whatever those phrases might be for your business. Even when you don’t include a geographic modifier like near me or nearby, or using a neighborhood or a city or even a state, Google’s going to just default to showing you stuff in your local area anyway, because Google knows where you’re located, and that’s where you can see, “Okay, Google’s using this local algorithm for my business, that’s actually the kind of marketing I need to do”.

Greg Gifford:

Even though you might have aspirations of, I want to sell to anybody in the country. Those people are going to find you, if they’re going to find you, but you can’t change the way that Google is treating your business.

John Doherty:

Exactly. Yeah. I just searched Toyota dealer in Google. I’m based in Denver, I’m logged into Google, they have my IP, et cetera. They know my favorite pizza order. They know everything about me. And I find, I get two ads. One is a local dealership, the other one’s Carvana. But then the very first organic result above the local, the Map Pack, I get toyota.com certified Toyota dealers in Denver, Colorado. Right? I literally just searched Toyota dealer. Right?

John Doherty:

So yeah, I think that’s a great call. And if you’re a local business, go and do a search, don’t even type in the location, don’t type near me. None of that, just type Toyota dealer, type HVAC installer, whatever kind of business you are and see, kind of what’s showing up there, that starts to drive your marketing there.

John Doherty:

So Greg, to zoom back out a little bit, as a local business is getting going, obviously there’s like stages of local businesses right there. Your VSPs, your small mom-and-pop shops, that kind of thing, like quickly, what should they be doing? But then as you get bigger, right? Say you’re an HVAC dealer, you got 20 different salespeople out in the field and you’re installing AC units all over Dallas or Denver or whatever.

John Doherty:

At kind of a higher level, how should people be thinking? How should local businesses be thinking about digital marketing as in the channels that they should be investing in? Where do they start when they’re looking to grow? How do they sequence thinking about channels? When should they start with SEO? When should they start with Google ads, Bing ads, right? Let’s talk about Bing ads, for sure, and local. And then also, social. What are the different areas that they should be thinking about there? How should they sequence for it? And then we’re going to talk about budgeting as well.

Greg Gifford:

So the way that I always look at it is, you’ve got to start with your website. And that typically means you’ve got to do SEO first, because it doesn’t really do much good to start paying for ads that are going to drive traffic to your site, if your site sucks, because then it’s not going to convert that customer. So you’ve got to have a great website experience first, so that those people that you’re paying to get to your site, find the answer they’re looking for and have confidence that you’re the right person to do business with.

John Doherty:

So what are the common things that you see local businesses getting wrong on their websites that they need to fix before they start driving traffic there?

Greg Gifford:

Well, I mean, I just talked to a guy earlier today, and he didn’t have a phone number on his website, and you had to really dig around, and he didn’t have contact us as a main menu button, which you should always have. Because if people have questions and they don’t want to call you, they’re going to want to email you. So make contact easy to find.

Greg Gifford:

But you want your phone number to be up in the header of the site. so that it’s clearly visible on every page. And on mobile, make sure that that number is clickable, so that they don’t… Because if I’m on a mobile device, if I’m searching on this and your site pops up, but I can’t click on the number and have it dial, then I have to switch back and forth between my phone app and my website app to type in the first three numbers, then switch back, see the next three, switch back, then do the last one four. Don’t make it hard for people to contact you.

Greg Gifford:

So think about the concept that’s on your site. And this talks to the question too, about, like you said, for the smaller mom-and-pops, what do you do first? I always like to try to boil things down to the simplest concept, because it helps people that don’t understand digital marketing have a better handle, and for the people that do understand it, a lot of times they get so in the weeds on the details that they forget the big picture.

Greg Gifford:

So when you boil down to the simple concept, it helps everybody get on the same page. And the simple concept is, Google’s kind of like a toddler. It’s very curious and wants to know a lot about a lot of different things, but it doesn’t really have deep knowledge about what you do. So it’s like holding your toddler’s hand and explaining something.

Greg Gifford:

You’ve got to have it really obvious who you are, what you do, why you’re awesome, and where you are on your site. And then it also taking that next leap, Google’s that curious child. If you really boil Google down to the simplest concept, Google is really just a pattern detection. Google’s algorithm is looking at different factors and establishing a pattern, and if a site has a better pattern than another site, then it shows up higher in the search results.

Greg Gifford:

So to have a better pattern means you’re doing digital marketing, whether it’s ads or website or whatnot, so that you stand out from your competitors, you have a better pattern than your competitors. And when it comes to the content side, a lot of people have the same generic BS content that’s on all their competitors sites. So you don’t stand out.

Greg Gifford:

If you have the same content and a lot of small businesses they just kind of do that. They don’t really know what to do. So they’re going to find a competitor that they like and kind of copy the same content. Or if you’re using a provider. If you’re using a provider that does websites for dentists, or websites for car dealers, or websites for doctors, or whatever it might be, that provider is probably going to just put some default content on your site. Then you have the same thing as everybody else.

Greg Gifford:

So the easiest way to think about content is, if you want to show up as a search result, if you want a page on your website to show up as a search result for something that someone typed into Google, you need a page of content on your site about that concept. It doesn’t have to be a perfect keyword to keyword match, but if I’m looking for HVAC repair and I’m a company that does HVAC repair among a lot of other things, I don’t want to have one page that says, “Here’s all the stuff that I do”.

Greg Gifford:

I need a page for every service or every product that I sell. So I have a page about that concept, so that I have a page on my site that answers the question or answers the needs that that potential customer might have. And that’s really the biggest mistake that I see is people just, they’ll have one or two pages on their site with a bunch of bullet points of here’s all the things that we do.

Greg Gifford:

Using the HVAC example, I don’t need to know that you can install a brand new system. I don’t need a brand new system.

John Doherty:

Right.

Greg Gifford:

My coolant went out and I need you to fix the compressor in the coolant. And if you just have we install HVAC, I’m probably going to move on to the next guy that does have a page that says, “Yeah, we’ll come out and give you a new compressor and refill your coolant, and you’re good to go”.

John Doherty:

Totally. Totally. Yeah. Yeah. I just had to get my HVAC replaced last year and I think we got a Daikin, is the brand that we got. And I don’t even remember how we found the people. But if I’m an HVAC provider in the Denver area, yeah, I’m going to be optimizing towards like, HVAC, Denver, those sorts of things. But I’m also going to have, for people that are a little bit more… They’ve been doing their research, et cetera. Right?

John Doherty:

They talk to a few people. As like, “Okay, I know I want to get a Daikin so let me find a Daikin dealer, right? Someone that can install that for me. Right? But also most people are not that educated. I was not that educated. Right? I didn’t know, do we need a new system or can we repair this one? Well, actually I did know that we needed to replace it, because the people that came out the previous year told me that like, “Hey, as of this December 31st, we’re not allowed to repair these anymore in the Denver area”.

Greg Gifford:

Oh really?

John Doherty:

Okay, cool. I mean, it came with the house. Right? I knew it was a little bit old. So like, “Okay. We have to get a new system next year”. So I knew that, so then I got someone out to tell us and consult with us on like, how do we get more air upstairs and that kind of thing. Right? So basically what you’re saying is having levels of, what are people searching for? What could they be searching for? What are the questions they’re asking you? Right?

John Doherty:

Ask your salespeople, “Hey, what are the questions you most commonly get?” Right? Do I need a new system or can I repair my old system? Okay. You need to have a page about that. Right? You need to have that in your FAQ. Something like that. Thinking really about, not what do you want to communicate to them, but how do you answer what they are asking of you?

Greg Gifford:

Well, and it’s taking the blinders off too, because on the smaller side, you’re the business owner and operator, it may be like you and your wife, or just you running the store and that’s it. And you have to wear a bunch of different hats, or on the higher side, there’s a lot of different people involved, but on both sides of things, you’ve got your either owner or your market or blinders on.

Greg Gifford:

You’re on that side all the time. You understand the industry because that’s your job. But you got to understand using your example of HVAC, people don’t buy a new HVAC system every year. You get one every 10 to 15 years, right?

John Doherty:

Right.

Greg Gifford:

So chances are somebody getting a new unit, they’ve never done that before in their life. If your site is full of all this jargon and all the ways that you talk about it, but it doesn’t have a simple, “Hey, my air conditioning doesn’t work, what do I do? How do you know if you need a new one or a replacement?” If you don’t have those general things, great example here on this one.

Greg Gifford:

I work with a lot of car dealerships, so I’ve got a lot of history there. Car dealerships, like to say that they sell pre-owned vehicles. Because it just sounds nicer than used cars. In fact, Mercedes goes so far as to tell their dealers, they’re not allowed to use the term used cars, they have to use pre-owned vehicles, because the connotation is better.

Greg Gifford:

Most dealers will call it pre-owned vehicles. The problem is the general public never uses that term. The general public searches for used cars. So if you look at various SEO tools, if we want to get in the weeds, if you look for, I don’t even remember the numbers, but it’s something like 225 times the search volume on used cars than what you get on pre-owned vehicles.

Greg Gifford:

So that you to take those marketing blinders off and figure out what are the questions customers are asking, or how are the… I mentioned earlier, what are those people going to look for that you want to show up for? Not particularly the name of your service or the name of your brand, because sometimes they’re going to end up needing to buy your product or service, but that’s not their initial search.

Greg Gifford:

Their initial search is, I have a problem, I need a solution. And as they do research, they then figure out what they need. So you’ve got to think about the user side and how’s that person going to look for you, so that you can create the right kind of content and optimize it the right way on your site, so you’re going to show up as a search result.

John Doherty:

Totally. I just did the search pre-owned Toyota versus used Toyota. And obviously I’m getting all like Denver results. Pre-owned Toyota, Keywords Everywhere told me it had 6,600 searches a month, used Toyota has 22,200. SO it’s like four times the search volume. Right? I’m sure for others it’s a lot more. But yeah. Putting yourself in the customer seat once again, it’s what are they asking of you and how do you answer that? Not what do you want to tell them?

Greg Gifford:

Exactly.

John Doherty:

And yes, branding is important, and the language you use, I mean, Mercedes they’re high end, right? So they’re going to go for pre-owned versus like Toyota. I mean, they’re all showing up here of all the local Toyota dealerships plus there’s Honda advertising in there. They’re going to use used because, there’s a whole like stretch of Toyotas.

John Doherty:

You got your ultra luxury, but you also have your entry. Camry’s best selling car in the country for what? The last six years Greg, something like that?

Greg Gifford:

Something like that, yeah.

John Doherty:

It’s crazy. Yeah. But their brand doesn’t matter. They’re not going for the high end of, Mercedes or Porsche or Audi or someone like that. Really important to take into account. So let’s get a little bit into the weeds here, and let’s talk about how do you actually do SEO for local businesses? We talked at kind of a high level about like nationwide SEO and local SEO and like, two different circles and the overlap.

John Doherty:

There’s a little bit of overlap for sure. Right? And I talk about SEO as like, it was kind of three core tenets to SEO technical, content, links, right?

Greg Gifford:

Yep.

John Doherty:

Same in local SEO, but how those look for local SEO is different. So can you unpack that for us a little bit?

Greg Gifford:

Yep. So A, you still have technical content and links, but you have a fourth one that is location, because if you’re a local business, you’re going to have a Google My Business listing. So there’s two types of local businesses. You’ve got the brick and mortar, where a customer is going to come to your physical location to do business with you, to buy your product or service.

John Doherty:

That’s your local coffee shop.

Greg Gifford:

Right. Or you have a service business like an HVAC guy, or a plumber, or an electrician, where they may have an office, or they may not, but they’re going to come to your office or to your home, and service you there. Either type of business needs local SEO. And so you have to have that Google My Business listing, which is what allows you to show up in the Map Pack in Google search results or in Google Maps.

Greg Gifford:

And it’s also that kind of extra entity signal to Google that says, “Hey, look, this guy really is located in Denver and he’s not really a guy in Boulder that’s trying to show up in Denver, that once a customer finds him is like, “Well, I’m not going to drive the 40 minutes up to Boulder, I want somebody that’s down the street from me”.

Greg Gifford:

So you have to understand the Google My Business side, and part of that, Google My Business side is also customer reviews. Because yeah, customer reviews are important for any business, product or service, but when it comes to local businesses, your reviews actually play into Google’s ranking algorithm.

Greg Gifford:

So you want to have a good review process to make sure that you’re getting customer reviews. You want to make sure that they’re making it easy for customers to leave reviews. You’re asking everybody and you’re responding to reviews, et cetera, et cetera. And then when it comes to the technical. Technical is still pretty much the same between the two, but when it comes to content, like I mentioned earlier, you got to have that page of content about that product or service or that concept.

Greg Gifford:

But you also have to optimize the content the right way. And you kind of hit on it a minute ago where a lot of people, if you’re doing HVAC repair, you’re going to say, “I do HVAC repair in Denver”. You’re going to target that. So as you’re optimizing your title tag, your H1 heading, your content, your alt text on your images, your URL, your meta-description, all those standard SEO elements of, “I need to go make sure my keyword phrases in these places” it’s no longer just the keyword phrase. It’s the keyword phrase and the geolocation phrase that you need to include everywhere. So it’s a different way of optimizing.

Greg Gifford:

Then when it comes to links… Well also on the content side too, another thing that’s important is building local relevancy. So it’s not just having that keyword in a few places. It’s making sure that your content is actually about your business, but that it’s also clear that you’re in that local area.

Greg Gifford:

So it’s not like you just mentioned Denver a couple of times, but maybe you’re mentioning some landmarks or directions or other things that show that you’re really in that area. And then also, when it comes to blog content, with local SEO, a lot of times it’s beneficial to write blog content that’s just about the local area and doesn’t even have anything to do with the business.

Greg Gifford:

Because if you’ve got 150 plumbers that are trying to show up in Denver for plumbing, and they all have exactly the same sort of content, but then you’ve got this other guy and he’s like, “Yeah, here’s why it’s important to pay attention to your plumbing, because in Denver, we get a lot of cold weather and you’re going to have a bigger chance of busted pipes. And so blah, blah, blah, blah, blah”.

Greg Gifford:

Or, “Hey, if you’re driving up and you’ve got a house up in Summit County that you go up to ski and on the weekends, here’s what you need to do to pay attention there, because you’re at a higher elevation and in colder weather”. You have things that may be kind of tie into your business, or maybe it’s just like, “Hey, you know what? We travel around and do HVAC repair all over town, and Denver is really known for breweries and we love all the breweries. In fact, here’s our top five breweries”.

Greg Gifford:

So you mention HVAC repairs, because we drive around and do this, but here’s my five favorite breweries. And I like IPA’s, these are the five best IPA’s you can buy in Denver. So it’s kind of what we call the billboard effect. If everything on your site is all about what you do, you’re only going to show as a search result when somebody is looking to buy what you’re selling, which if we’re talking Denver, that’s a pretty narrow focus. No matter what the business is. Car dealer, doctor, lawyer, dentist, plumber, HVAC, you’re only putting stuff that’s going to show up as a search result when somebody’s looking for you.

Greg Gifford:

There’s a whole lot of other people out there that would potentially buy from you in the future. So it’s like putting a billboard up right there on 25, that somebody’s going to drive by every day on their way to work or on their way home. They get that brand recognition. So when they do want to buy from you, they’re more likely to buy. So it’s doing that stuff.

Greg Gifford:

Then on the link building side, instead of going for these high value, really big authoritative links, you actually want to get low value links according to the SEO tools, because what you want is links from other local businesses. So Google’s local algorithm really values it when you get a link from another business that’s in the same town as you.

Greg Gifford:

Even if that business has nothing to do with you, it still has something to do with you because it’s a local business. So it’s just a whole different way of thinking about digital marketing when you’re doing it.

John Doherty:

Another local business, they have Google My Business that like their website points to Google My Business and vice versa. And so Google can say like, “This business is also in Denver, there are plumber, and they’re linking to this HVAC company, right? I don’t know, maybe you’re partnered up or something like that, there multiple different reasons why? But they’re going to count that more than like a generic directory or general site in Dallas, like into a Denver HVAC, like pretend it’s just not going to carry as much weight.

Greg Gifford:

And it bleeds into ads too. Once you’ve got the website and the SEO side locked down, you ask what order we should go in. So first, it’s locked down your website, get good SEO. Then you’re going to want to start doing Google ads because that’s the next most important thing that’s going to give you the biggest bang for your buck. Then you’re going to want to add on Bing, because Bing, there’s still a lot of people that use Bing. People don’t realize all the places that Bing shows up. It’s the default browser on all Microsoft computers.

Greg Gifford:

So if somebody’s not going to go, “I really like Chrome. I want to switch to it,” which means, not to be ages, but typically older generation people are not super computer savvy or they don’t care. They’re going to use whatever browser comes on the computer, which means they’re seeing Bing, they’re not seeing Google or-

John Doherty:

And that’s big for those where they come to your home because people that are older are more likely to be homeowners and they’re more likely to use [crosstalk 00:29:28]-

Greg Gifford:

Exactly. For younger generation, it’s everybody that uses Cortana as their voice assistant. It’s going to be Bing results. Everybody that does searches on a windows phone, which there’s not that many or anybody that does searches on Xbox is also Bing. So there’s a lot of different places that’s Bing stuff and Microsoft Office. You can run ads inside of Microsoft office too, and that stuff shows up. So Bing is important. Then once you’ve locked down Google and Bing, that’s when you start adding in social.

Greg Gifford:

But with any of those paid ad platforms, it’s also about locality. One of the biggest mistakes we see when we’re talking to potential clients that we work with is, they’ll be running Google ads and they’re not constrained to their city. So, I might be talking to a business owner that’s in Seattle and we start doing some searches and we see that guy’s ads showing up to me in Dallas, where there’s no way that anybody in Dallas would ever buy that product or service. But that doesn’t mean Google’s not going to charge you for that click if somebody clicks on it.

John Doherty:

Exactly.

Greg Gifford:

So, you’ve got to make sure you’re with a vendor that understands local and doesn’t just go, “Let’s go spit this campaign out and not constrain it to a particular area.”

John Doherty:

Yep, totally, totally. So I want to do a couple of like rapid fire questions for you on local SEO. And then I want to talk about budgeting real quick.

Greg Gifford:

Yep.

John Doherty:

So first of all, some questions that I commonly get from location based businesses is when it comes to local SEO, does the phone number on your page matter? Like I’m in Denver, right? 720 and 303 are two area codes. If I have 215, which is my like personal right because I lived in Philly 10 years ago and I haven’t changed my phone number. If I have my 215 number on there, is that going to impact me negatively for local SEO?

Greg Gifford:

Some people will say yes. Some people will say no.

John Doherty:

What’s Greg’s take?

Greg Gifford:

My take is, nobody’s 100% for sure. But it’s pretty likely that, that at least has some amount of weight. Now, does it mean that if everything else has done well and you’ve got that Philly area code that you’re not going to show up in searches? No. But why not do everything that you can and having a local area code is a really easy thing to do. It’s not hard. It doesn’t take any knowledge or coding.

John Doherty:

Totally.

Greg Gifford:

Get a call forwarding number, get a call tracking number. You should be doing call tracking any way to track what’s going on. You don’t need an 800 number. Nobody needs toll free numbers. Everybody can call for free. So just get a local area code tracking number, and that way, if your cell phone does have a Philly area code, get your call tracking number, it still rings to your cell phone, but customers see that local area code on the site.

John Doherty:

Yeah, it’s a conversion thing too. Because like I’m in Denver.

Greg Gifford:

Exactly.

John Doherty:

I see an HVAC company with two and five, I’m like, “Oh, really?” That’s a Philly number. So yeah, it builds trust to improve your conversions.

Greg Gifford:

Yep.

John Doherty:

Number two, address. Same sort of thing.

Greg Gifford:

Address very important. Address is 100%. 100% for sure important. Your address is really important. It needs to be on your site. It actually needs to be marked up with schema markup. Very clearly you’re holding Google’s hand saying this is physically where I am because that location in the real world and proximity of how far away the searcher is to your location is so important in local.

John Doherty:

Totally. People historically, I’ve always heard people talking about your NAP, right? Name, address, phone number used to be the same across your site, your Google my business, your directory listings. It looks like patients like all that sort of stuff. Like same phone number, same address, same business name, all that kind of thing that needs to be consistent across the board because that’s what Google scrapes to show you other places as well. So, we’re going to make sure you’re giving them the right information.

John Doherty:

Quickly on blog content, this is something I get asked about a lot, like, “Should like local businesses be creating content? It sounds like you say yes. Right? So like a real estate agent. Like if I create, from your perspective, if I create, like I’m a real estate agent, let’s say in Denver and I create content around like how to buy a house, right? That’ll probably show up nationwide.

Greg Gifford:

Potentially yeah.

John Doherty:

Is it worthwhile doing it, or like, I mean, really what you should do is how to buy a house in Northwest Denver, Colorado. How to buy a house in Denver, Colorado. So it’s less likely to show up broader. But if someone searches how to buy a house, they’re located in Denver, they’re more likely to show Denver-

Greg Gifford:

We could have done a whole hour just talking about this particular topic and what’s around the fire. But that’s the thing, if you’re writing a piece of content around a concept, because you want to show up for that, and you’re also making that the best answer to the question that searches you’re asking about that concept, it’s likely you are going to show up outside of your local area. And we have a car dealership that’s got one blog post that gets 30,000 plus visits a month just to this blog post.

John Doherty:

Wow.

Greg Gifford:

And then we get a lot of international visitors to our blog because of this post. Should we take it down? We said, “Well, yeah, if there’s 30,000 visits a month and 25,000 of them are outside of your local area, who cares?” That’s still 5,000 people in your local area that that’s valuable for. And maybe that post doesn’t drive business, but the blog, it’s really important to understand the content that goes on your site. And the content that goes into your blog is two different kinds of content.

Greg Gifford:

The content from the main section of your site, that’s your product service content bye for me now. The content on your blog is more informational. It’s more showing that you are an expert and you’re the right person to talk to. The content on your blog usually doesn’t lead to someone calling you or someone filling out a form. It’s usually how they discover you. And then they see other stuff on your site and they convert from one of those website pages.

John Doherty:

Right. Plus if you’re doing any sort of like social ads, retargeting, that sort of thing, you dropped your pixel on anyone that comes, but you only show your ads to people that are within the Dallas area. And so you’re not actually paying, you’re not actually advertising to them. So, you are getting, and you’re getting 5,000 more qualified people a month, right?

Greg Gifford:

Yep.

John Doherty:

And if it’s a house purchase or a car purchase or something like that, we’re talking big ticket items here, right? Even HVAC like five, six K, still a big ticket item. It’s not nothing for sure. So let’s talk quickly on that note about like kind of high ticket items, high ticket services, whether it’s a car or HVAC or plastic surgery, how do you counsel people to think about the budget that they put towards this?

Greg Gifford:

So when we were talking before we started recording, you worded it way more eloquently than I would. But basically what you want to look at is, you want to grow your business. And if you incrementally sell one or two more of your product or service, what is that worth to you, and what are you willing to spend to get enough leads? Because it’s not like a one-to-one relationship. Somebody comes to your site and submits a lead doesn’t necessarily mean they’re going to buy from you.

Greg Gifford:

So, if you’ve got a 25% close rate on phone calls, so 25% of the people that call you are going to actually buy from you. That means to sell one more, you need four phone calls.

John Doherty:

Yep.

Greg Gifford:

But usually selling one more is not enough. So if you need to sell four more, then you need 16 phone calls out of that. So what’s that going to take? And what’s that going to cost? And then you’ve got to look at what are you getting for SEO? And you guys just did that study on what do people charge? What’s the average hourly rate? I think it was like $125 an hour, was the industry average?

John Doherty:

Historically it’s 125. They’ll have the new one out in about a month. But yeah, historically it’s 125. It’s why [crosstalk 00:36:59] don’t have it.

Greg Gifford:

So let’s say, if it’s 125 on average, and you’re spending just $500 on SEO. That means at best, you’re getting four hours of work a month to do all of the technical stuff. Research, the content, write the content, edit the content, post the content, optimize the content, do your reputation stuff. Do your name, address, phone number stuff. Do your link building, like there’s not enough time there.

John Doherty:

It could kind of work.

Greg Gifford:

So typically, and I speak at conferences all over the world. Are there some businesses they can spend 500 bucks a month on SEO and be fine? Sure. If you’re a mom-and-pop business in the middle of Wyoming and there’s not much competition, great. If you’re an HVAC repair in Dallas where there’s probably 800 people in the Metro area that will do HVAC repair, you’re not going to get by on 500 bucks a month. It’s not going to work. So what I tell people at most conferences all over the world is, if you’re looking at it in US dollars, almost think of it like an attorney.

Greg Gifford:

It’s not like every time you talk to your digital marketing partner, you’re going to pay more money. But look at it like you’re buying a bucket of hours. When you’re buying SEO, or paying for PPC management or social ad management, you’re paying for a butt or multiple butts to sit in a seat and manually do that work. You’re paying for manual labor and expertise. So, there’s time involved to do all of these things.

Greg Gifford:

You got to think about what’s that going to cost. And typically, you shouldn’t really be spending less than 2,500 to three grand a month on the really low end. Then it go way up from there. But if you’re going, wow, 1000 bucks a month is too expensive for SEO. Yet, you want to do five or six more HVAC installs, the math doesn’t work there. You’re not going to get enough return out of that $1000 because there’s too much competition.

John Doherty:

Right. Exactly. Yeah. And I actually say, and this has been a big thing that I’ve been pushing is, the question of how much should we spend is exactly the wrong question. The question you should be asking is, what results do we want to get-

Greg Gifford:

Exactly.

John Doherty:

… and then what spin is it going to take to get there. Right? So it’s setting your own expectations and too many business owners, or even directors of marketing, Greg, too many people are like, “Well, we don’t know, we don’t know what we want to get.” Okay. Well, let’s solve that first. Right? Let’s look at how many leads are you getting now?

Greg Gifford:

Yep.

John Doherty:

How many are you closing? What’s your average close rate. Right? And it literally becomes math, and then, okay. If you haven’t done it before, they’re doing the research or paying someone like y’all to do the research for, “Okay, what’s it probably going to cost, right?” So you can look at your website, conversion data. If we get 100 visitors, we get one form submit, we know we’re going to close one of those. Right? And it’s let’s say $5,000.

John Doherty:

So every form submit is worth $1250 to you. Great, good to know. Right? Like we’ve got another data point, 100 visitors, $1250. Okay, cool. How much are you willing to pay to make $1,250, right. We’re going to pay 10% of that. 125. So you got to get clicks for like a dollar 10 or something like that. Right? Is that going to work?

Greg Gifford:

Which doesn’t always work out because like-

John Doherty:

Which doesn’t always work out.

Greg Gifford:

Like HVAC clicks in Dallas are 400 bucks a click.

John Doherty:

400 bucks a click. Holy crap. Right?

Greg Gifford:

Yeah.

John Doherty:

See. So like Google ads might not work until you’re at a certain scale. Right? And you’re doing big volume there. Or you improve your conversion rates. You need to get five or 10 form submits off of every 100 visitors in order to make those economic sport.

Greg Gifford:

And leading down that same path of a lot of times, businesses don’t know what they should spend. Those same people make the same mistake of going. “I see a lot of people out there sell SEO for 1000 bucks, so I want to get SEO for 1000 bucks.” Or they’ll talk to an agency, it says, “Here’s our four packages. Package one, package two, package three, package four, here’s the cost associated,” and let the business pick which one they need. That doesn’t work because how’s the business know which one they need?

John Doherty:

Mm-hmm (affirmative). Yep.

Greg Gifford:

A good agency is going to talk to you about what your goals are, and it’s not just how many leads do you need? It’s what kinds of leads do you need? You know, as an HVAC guy, do you want repair leads or do you want installation leads? And what’s more valuable and how do we split that up? And what are you getting right now? Let’s look at your Google analytics to see what’s going on.

Greg Gifford:

And then we can really answer, here’s how much you should probably spend on paid search, because we can see what your competitors are pretty close to spending, and we can see what your goals are. And we can back into those numbers instead of just coming and going, “Okay, we’ve talked to people all the time and like, yeah, we’re currently spending 20 grand a month on paid search.”

Greg Gifford:

And we come in and we do an analysis and we’re like, “Your paid search company isn’t constraining it to your area. You’re wasting $5,000 a month on clicks that are outside of the state. That there’s no possible way that, that person’s going to buy from you. So let’s not spend 20 grand, let’s spend 15 grand. In fact, you know what? We can do for 12 grand and get you twice as many leads as what you’re getting now, because we’re doing it the right way, aligned with your goals instead of just clicking a button to generate the same crap we do for everybody.

John Doherty:

And you just saved them 100 grand a year.

Greg Gifford:

Yeah.

John Doherty:

I mean, if you cut out eight grand times 12, $96,000 a year. Like that’s huge. No, I think that’s very wise when it comes to like thinking about how you go about kind of buying services as well. And I do actually think that agencies should present multiple options, but not like, “Here are your options. Tell us which one you want.” Right?

John Doherty:

Not like a menu maybe earlier in the process, an agency will present a menu, just like here are all the services that we offer, if someone is a little bit kind of higher in the funnel, we’re not quite sure what they need. And sometimes people like to know that like, “Hey, we’re not interested in Google ads yet, but we do want to do it in the future. So it’s good to know that we can bring you that in the future.”

John Doherty:

I see that helping a lot of agencies close work and it just helps buyers feel a bit better about signing with an agency, even if they never end up doing it, they’re more likely to sign. But, really what it comes down to is, “Does the agency have they experience overall,” but the agency should also tell you, “Hey, here are the four different options. Here are the trade-offs for each one, right?”

Greg Gifford:

Exactly.

John Doherty:

You say that you literally only have $2,000 a month. That is your hard budget. I get it. Right? You told us your goals are this though. So on $2,000 a month, we’re going to do X, Y, and Z. And I think we can get you to this goal, this revised, reset expectation number here, right?

Greg Gifford:

Yeah.

John Doherty:

But if we can hit this, then you’re making an extra $5,000 a month-

Greg Gifford:

And then its easy to upgrade.

John Doherty:

… would you then be willing to put an extra $1000 to $5,000 a month in, and here’s how the timeline will expedite. Right?

Greg Gifford:

Exactly.

John Doherty:

A good agency should be able to tell you that as well, as opposed to like, “Here’s the number, take it or leave it.”

Greg Gifford:

Yep.

John Doherty:

And this is actually something I’ve really changed my perspective on Greg. Because when I used to sell a lot of SEO consulting work, I would basically just be like… Because I would do a lot of like getting to know them and kind of putting together the right pitch. And by the time I went into presenting them a number, they were just like, “Yep, this is the thing that we’re doing. And we agreed on the scope.”

John Doherty:

But I’ve actually been convinced over the last couple of years that presenting three different like engagement levels and then setting those expectations for like, this is what is going to get you. My coach, Chris Lama talks about like, here’s number one. It’s like 80% of what you need, because that’s what you can afford. Right?

Greg Gifford:

Yep.

John Doherty:

Here’s 120% of what you need because you get all the things that you want and need, but then there’s this other 20% that you don’t even know that you need that we know because we are the experts. So it’s going to cost 20% more than what you said you’re ideally going to spend. Do you have that budget, right? And [crosstalk 00:44:16]-

Greg Gifford:

But you can’t get there unless you have the discovery call in the first place to find out what they actually are looking for. Just because they say they need digital marketing, doesn’t mean you could come in and go, “Okay, here’s your three options.” You got to talk to them about what they want to do, what they need, what their goals are, et cetera, first.

John Doherty:

So as the buyer, when you’re talking to agencies like SearchLab or coming through Credo and getting introduced to agencies like SearchLab, asking those questions and they should be asking you those-

The post How to do and budget for local marketing and SEO, with Greg Gifford of SearchLab Digital appeared first on Credo.

We live in a fascinating time. Perhaps you grew a few affiliate sites organically, went on to help a couple of friends get that #1 spot on search engines, and… boom! -you decided to start an SEO agency.

You know you can get results & can convince potential clients of the same. However, this is no individual work; now, you are in the agency business. 

Here, understanding the client’s business thoroughly & understanding their goals and reasons behind hiring your agency (way before you sign that retainer) is vital if you wish to grow to the top level. And it starts with asking some fundamental questions ⁠— they will ask you too.

Questions to ask potential SEO clients

Here are the questions you should ask a potential SEO client:

1. What exactly do you sell & to whom?
2. What are your goals with SEO? What’s the value attached to that goal?
3. Do you have any specific keyword(s) you want to rank for & expect us to deliver?
4. Who are your five main competitors you envy for their search engine presence?
5. Can you name a few publications/sites/forums your target audience frequently visits?
6. Have you worked with any other agency or freelancers for SEO? If yes, why did you leave them?
7. Ideally, when do you expect to start noticing your preferred SEO results after we start?
8. What’s your monthly SEO budget?
9. What reports would you like to see & how frequently?

Let’s explore each of these in-depth.

Understanding the client’s business

Question: What exactly do you sell & to whom?

Why you ask it: To get a deeper look into the client’s business, knowing what they sell, cross-sell, upsell, and for how much, will get you essential cues to weave your content & SEO strategy. 

The “to whom” part is to learn more about their ideal customer and current customer base. A proper answer to it will include detailed information on the potential customer. For example, their age, location, pronouns, income & social status, occupation, lifestyle, personality, values, buying intent, etc. That and more of the jazz you learn about in the “market segmentation” chapter. The best way to get this info is by asking the client to fill a buyer persona template.

Understanding their objectives

Question: What are your goals with SEO? What’s the value attached to that goal?

Why you ask it: To get the exact info on why they are hiring you. Your potential client’s goals can range from ranking for a low-volume keyword like “best construction consultants in east colorado” to getting more newsletter subscribers or more users to sign up for their free trial. If they are already getting traffic, they might want to optimize for lower bounce rates, conversions, sessions, etc.

Moreover, they might have a $ value attached to that goal. E.g., Someone using the free trial is worth $$ or someone staying on a site for long = $. This will help them quantify the ROI of investing in SEO.

You can also use our SEO calculator.

Knowing what your primary target would be

Question: Do you have any specific keyword(s) you want to rank for & expect us to deliver?

Why you ask it: Many clients already have specific goals in mind. The most common is pouring in the SEO budget towards hitting the top SERPs for high-intent keywords they are aware of but can’t rank for or don’t have the time to put in the effort. E.g., the previously mentioned “best construction consultants in east colorado.”

If they tell you the specific keywords they want to rank for, you can figure out how much time and money they will need to spend on the project to reach that goal.

With this knowledge, you can quote your price.

Learning about the competition

Question: Who are the five competitors you envy for their search engine presence?

Why you ask it: Clients don’t just want to rank; they want to rank above their competition.

They have been seeing their competitors on search engines for a while before they found your agency.

They know which common sites rank for the keywords they’d like to be ranking for.

Plus, this question will take some competition research load off your shoulder. 

Understanding client’s clients/customers

Question: Can you name a few publications/sites/forums your target audience frequently visits?

Why you ask it: The end goal is to make your client visible to their potential client/customer. Therefore, recognizing where the client’s potential clients’ attention is, gives you a proper direction to build your content calendar & SEO strategies.
E.g., If you are going to do PR work for link building, publishing on the publication client’s prospects read is better than a random Forbes feature.

Becoming aware of their past interactions with other SEO agencies

Question: Have you worked with any other agency or freelancers for SEO? If yes, why did you leave them?

Why you ask it: To get to know how experienced the clients are in dealing with SEO professionals or SEO in general. This tips you off to red flags and what not to do if you decide to work with the client.

For instance, if they have already worked with an SEO agency, they could’ve left the agency on account of their own error (e.g., not giving accurate details, impatience, etc.) or due to the agency falling short (e.g., not delivering on what was promised.)

Client’s SEO vision

Question: Ideally, when do you expect to start noticing your desired results after we start?

Why you ask it: You understand SEO is a game of patience & consistency that gets exponential returns over the long run but does the client understand it? The answer to this question will reveal the client’s expectations and their capacity to invest long-term. 

Of course, if they don’t understand, it’s your responsibility to help them understand how things practically go. After that, if they say something like “we’d like to see X pages indexed by the end of this month” or “we want Y pages on top-50 search engine rank in the next two months”, you know the client won’t bother you & will believe in the process.

The SEO budget

Question: What’s your monthly SEO budget?

Why you ask it: SEO budgets can range from $500/month to $10,000+/month. As an agency, you want to cover all the time & money about to be spent and make a profit. Therefore, identifying how much the client is willing to pay will determine whether or not you should take on the project. 

Even after you explain “a typical blog post costs $100 or a link costs $200, and you’ll need X amount of content and Y amount of links even to start seeing the results,” if they say they can only spend an *unreasonably low amount*, then you know right away there’s no deal.

Check out our SEO agency pricing data.

Your reporting duties

Question: What reports would you like to see & how frequently?

Why you ask it: If the client is paying $5000/month & giving you 12 months to show what you can do, they inevitably want to know what you’re doing and achieving for them. Typically, all a client needs is a Google Analytics report or Ahrefs report at the end of each month. 

However, there will be some clients that demand daily reports ⁠— you should be selective and realistic with these clients.

The post 9 Questions To Ask Potential SEO Clients appeared first on Credo.

https://getcredo.com/wp-content/uploads/2021/02/What-to-do-when-everything-feels-busy.mp3

I’ve recently reached a place where everything feels super busy. Even though we’re still in a pandemic and I’m not traveling like I used to because of that, there is a ton going on.

Business has grown substantially in the last year, and so we need to hire.

My daughter is a toddler and almost 2, so she needs more energy and attention that before.

My wife and I are at the tail end of having a new house designed and we’re preparing to break ground on that early summer once the snow melts off the property.

Things are busy, and that’s not a badge of honor for me anymore.

In this episode I talk about how things feel busy, why they’re busy for me right now, and then how I’m getting some sanity back in my life. I introduce the idea of a Time Audit, which is something an old coach of mine had me do and I’ve kept doing quarterly to every 6 months when I inevitably get to this “busy” phase.

I hope you enjoy, and subscribe.

Transcript

John:
Hey there everybody, and welcome to this episode of the Credo podcast. I’m John Doherty, the founder of getcredo.com. On this show, I interview smart marketers and entrepreneurs who can help you grow and scale your business through great digital marketing. Every now and then I do a shorter, me only episode, teaching you something that is on my mind specifically. This episode is, of course, sponsored by getcredo.com, my company, where we have a highly curated network of vetted digital marketing professionals who are best in class at what they do. We’ve interviewed them, we’ve seen their client metrics and we’ve accepted them into the network only after they’ve checked the necessary boxes. At Credo, we specialize in helping companies find and hire the best digital marketing firm or consultant for their specific needs. So, if that’s you, get in touch with us at getcredo.com. That’s G-E-T-C-R-E-D-O.com and click the Find a Marketer button in the top, right navigation.

John:
Yo, yo, yo, what is going on everybody? This is John Doherty. I’m back here in your ears. I’m actually recording this in my car. I’m driving my truck up to Breckenridge right now, couple hours, hour and a half, hour 45 outside of Denver. We have a ski lease up there, so heading up for the weekend. I’m driving by myself with the dog, of course, the wife and kiddo are coming separately.

John:
So, I wanted to hop on and record this for you and it’ll be released a couple of weeks after I record it, but I wanted to get this out while it’s fresh, because it might be something that you need to hear. I wanted to record it while it’s fresh, because it might be something that you need to hear that might help you unblock some things in your business.

John:
So, Credo’s been going for my business, if you’re not familiar, getcredo.com, has been going since early 2013 and I’ve been working on it since September 2015, the end of September 2015. And we’re five and a half years in, and it’s been a journey, as any entrepreneur will tell you with any business, it’s been a journey. You learn a ton, good times, interesting times. And you get the school of hard knocks, that’s what entrepreneurship is. And this is, obviously, no different for me. I’ve hired people, I’ve fired people, I’ve kept people around and people have quit. We’ve driven incredible results for a bunch of agencies. Other agencies didn’t see those results. It’s just been a thing. And I’m all about value. I’m all about the value that people are getting from it. But at the end of the day, I’m running a business, I’m not running a charity. It’s a for-profit business. And I’ll just come out and say that, it’s a for-profit business.

John:
The reality is that when I first started working on it, we went from basically no revenue, I think we did $80 in revenue the month before I started working on it. I think the month of September 2015, if I’m recalling it correctly, we did $80 in revenue. And we pretty quickly went to that December, we did $5,000 in revenue. I was doing some SEO consulting at this point, but pay myself out of that, but we’re not taking anything out of the business. But we did $5,000 in revenue, leads are increasing, and it wasn’t even that many leads per month coming in, 10, 12, 15, something like that. They’re increasing by a few every month, but revenue is going in the wrong direction. And so, I pivoted it into a subscription model and we went to, by the end of the year, we were at 18k or no, by the end of 2015, we were at about 18, 16, $18,000 a month in revenue.

John:
And then, I kind of hit a wall, hired a business coach. We reworked some things and we went to the next level. And then to be honest with you, we kind of mucked around. I brought on a business partner technology… On the technology side, we built, rebuilt all of our technology. We pivoted the business model to a marketplace/escrow model. And then mid last year, middle of three, few months into the pandemic, we decided, hey, we need to trim back the product and make this thing self-sustaining.

John:
And to be 100% transparent with you, we flat-lined revenue for two and a half years. Actually revenue went down a little bit. We were still profitable-ish, but revenue went down and then we did actually get to a point where we weren’t profitable, I was overspending. I was investing heavily. And we ended up about two months of cash in the bank, maybe, something like that. And everyone, if all of our customers had left, I basically could have paid the bills for two months. Trimmed the company back, had to let someone go, cut back my own salary.

John:
Long story short, now that mid to end of February, as I’m recording this, it’s going to be released early March. We are up about 70… about 60 some percent year on year and we’re up 70% since July. So, we’ve turned the business around and it feels good. We’ve got big cash buffer in the bank, which is awesome. But recently, what I’ve been feeling is that things are busy. I was actually, last night, my wife and I ate dinner with our kiddo, I put kiddo to bed because my wife wasn’t feeling well.

John:
And I came downstairs and did the dishes. And then I was like, “Okay, I got to go do some more work. I have some more things to work on.” I remarked too, I was like, “Things feel really busy right now.” And I used to crush work time. I honestly haven’t for the last few years, 30, 35 hours a week, it’s been nice. It’s been really nice, that the business has grown over the last eight months. And business has felt more sane than it did for the previous year, year and a half. So, that’s really, really nice, but I was like, “Man, things feel really busy right now.” And then I was looking at revenue and talking to my business partner, our CTO, who’s one of my best friends. And he and I were just kind of talking through some things and I was a little bit grumpy, a little bit short recently about some things and said some things that I definitely don’t regret, but I said them in a way that could have been interpreted in… I said them, and it could have been interpreted in other ways.

John:
Ali is very gracious to me and knows me and puts what I say in the context of all of our conversations and our partnership. And so he didn’t, but if it had been someone else, they may have taken it the wrong way. And I was trying to think through why. Why does this feel hard? Why do things feel hard right now? Why do things feel busy? I was looking at it, and I was like, “Holy crap.” We have grown so much that there’s just more required at this point. And the things that we’ve been doing that got us here, that got us through the shift and got us the gains that we’ve seen, that have helped us build back up the cash buffer so we have a defensible business, and we can invest into things that we can invest in to learning faster, invest cash in to learning faster and not have to spend more of our time. We can hire people to help us learn faster.

John:
The things that got us to this point are not going to get us to the next level. And so, we’ve kind of come to a decision and we basically say, “Okay, do we put in more time? Or do we… Can we hire people,” which we are, we are hiring people. But then also there’s some of these bigger things going on in the business, like we need to redo all of our internal reporting to drive sales and to drive our visibility into the business and how well every customer is getting value. And how do we get agencies closing better? To should we even bring people into our top level so that… if we don’t know what their close rates are? All these sorts of things.

John:
And then also, Ali and I were on Slack today, and I said something, I forget even what I said. And he goes, he laughs and texts… And like, “Ha ha, sounds like teenager problems.” I’m like, “You mean teenager product problems?” He’s like, “Yeah.” But he’s not like… he wasn’t calling me a teenager. And that’s me giving him the benefit of the doubt and asking for clarification. But recognizing that we’ve grown from a, I don’t know, a nine year old, 10 year old, something like that, where she’ll need a lot of parental supervision, et cetera, to yo, we’re a teenager now. Credo is a teenager. And it’s maybe even driving. Ali said, “At least they have their learner’s permit.” And the way you parent a teenager, so I hear, I don’t have a teenager, I have an almost two year old, but the way you parent a teenager is very different from how you parent a 10 year old. How you parent a 16 year old is very different from how you parent a 10 year old.

John:
And so, we’re having to learn how to do that. And so, I gave the analogy that right now, we’re a teenager that needs more food because it’s growing. We need to give it that. We need to invest. And by the way, we’re profitable, we’re adding money, multiple thousands of dollars, low five figures some months, to the bank account. That’s after everything else, after taxes, after payroll, after other expenses, everything else. We’re adding that to the bank account every month. I’m like, “Wow, we can invest.” We can invest and still be profitable.

John:
We need to feed this teenager so that it can continue to grow, but we need to feed this teenager, it needs to new shoes, it needs braces. It’s at that stage right now where we need to invest in a little bit, because it’s telling us that it wants to, and it needs to. So, we need to go back, we need to clean house a little bit and we need to adjust some things internally that are pretty easy to adjust, to help us see what it is that we need to do.

John:
And the reason I’m being transparent about this and recording this and talking about it and publishing it, is because I think there’s a lot of entrepreneurs out there, maybe some of you listening to do this, that you feel like things are really busy right now and there’s a lack of like, “Why aren’t things working the way that they were?” Or, “Wow, we’ve grown.” And all of a sudden, “Holy crap, I can’t do all of this anymore. I need to get processes in place.” There’s just all these thoughts going on. Or maybe you just don’t know, maybe you don’t know that you need processes in place. Maybe you don’t know that the marketing, the channels that you’ve been using to generate leads aren’t working. Maybe you aren’t working as well anymore. Maybe you don’t know that your close rates have gone down and your average project size has gone up, but you’re still spending the same amount of time with every client, and not less on the smaller ones and more on the bigger ones. And figuring out that, hey, I actually like working on these bigger projects so we can spend more time with them and drive more value and do more things.

John:
All that said, if you’re feeling like things are really busy right now, go back and look at what may have changed. Maybe your revenue grew. I know a lot of agents, their revenue grew a ton in 2020 through the pandemic because internal company… because companies cutting back their internal marketing teams, realizing they can hire a whole marketing team for the price of one junior, mid-level marketing manager in, I don’t know, Kansas city. They can hire a whole team for that at an agency. And so maybe your agency has grown really well, but you haven’t stocked up because you’re afraid. Or maybe you’re staffing up, and that’s leading to a whole new host of problems. You’re having to learn how to manage, you having to learn how to lead leaders.

John:
But what I want you to do is I actually want you to sit back, maybe take a day, take a morning, I don’t know what you have, where you can carve out, the time you can make, but I encourage you to make at least half a day where you can sit back. Maybe you, rent an Airbnb for a night and get some awesome takeout. We are still in a pandemic. So, you get takeout and get an evening to yourself and think about the business and look at your metrics and look at all the things that you’re doing. Look at your calendar. Do a time audit where you look back and say, “What are all the things I did every 30 minutes for the last week and which of those are driving the business and which of those aren’t?” And then stop doing the things that aren’t driving the business and do more of the things that are and figure out how you delegate better.

John:
I really encourage you. I’m going to challenge you, actually, to do a half day and to go and to get that kind of clarity. You owe it to yourself. We’re still pretty close to the beginning of the year. I mean, you’re listening to this beginning of March. We’re only two months in. We’re not even through Q1 yet, there’s a lot of the year left. Who knows what’s going to happen from here on out in this year? I think the world is going to open up a bit. Vaccines are rolling out from COVID-19. In person meet ups are going to start happening again. Things are only going to get busier from here, if we let them get busier. But I think that we can actually reset and go into it in a good way and realize what has happened and what do we need to change moving forward.

John:
So, anyways, I hope that’s helpful to you. It’s been helpful for me to realize it and to say, “Hey, we actually need to be the same.” We need more developer time. We need to put more money into marketing. We need to hire a person to support sales. I need an admin assistant, we need an admin in the business that’s supporting me, as an exec and also leading the business, and also personally with busy things going on. I’m having a house built this year and into the winter. So, I’ve realized all of that and all of that I’m building towards all that… getting that help because I realized that like, “Hey, this business has grown. It’s bigger than it’s ever been. I’ve never run a business of this size before, because the previous size is the biggest size of business I’ve ever run before that ever worked out, but it never run.”

John:
And so, I’m learning and I’m growing and I want you to think about that as well. How is your business growing? What are you learning? And what do you need to stop doing? What do you need to start doing? What do you need to do more of because you’ve stopped doing those things that you shouldn’t be doing? Now, you have time to focus on the things that are going to move the business forward. And how do you continue to level up in your learning? In your business? Working on the right things, not working on the wrong things, maybe becoming a leader of leaders.

John:
So, yeah, that’s what I got. I don’t really know how to end this, except to say, if this was helpful to you, I would love for you to share this. Share it on social media and tag me, take a screenshot with your phone and tag me on Instagram @DohertyJF. Tag me @DohertyJF on Twitter, wherever it is you share these things, tag me. I’d love to see it. give you a high five, a virtual high five, maybe even reshare it. So, share it with your friends, subscribe to the podcast. And with that, I’ll leave you to your week. I hope you have a good one and I’ll be back in your ear soon. Peace.

The post What to do when everything feels busy appeared first on Credo.

https://getcredo.com/wp-content/uploads/2021/02/You-need-a-process-for-everything-especially-sales.mp3

When I come across service businesses, especially agencies, that are struggling to grow it’s usually because processes are not in place to allow them to scale.

Whether it’s a marketing process, a payroll process, or a sales process, getting these squared away in your business will only make it more sane, more profitable, and incredibly better to run.

In this episode I talk about an agency I spoke with where I helped them rework their sales process to great effect. I’ve done it for many, and it’s always super fun to watch.

In this episode I talk about:

1. Why you need to think about who can do a thing, not just how to do it yourself
2. Why letting the prospect drive the process puts you on the defensive instead of being the expert
3. A few processes I have in place that help me deliver great results every time

Transcript

John:
Hey there everybody, and welcome to this episode of the Credo Podcast. I’m John Doherty, the founder of getcredo.com. On this show I interview smart marketers and entrepreneurs who can help you grow and scale your business through great digital marketing. Every now and then I do a shorter me only episode teaching you something that is on my mind specifically. This episode is of course sponsored by getcredo.com, my company, where we have a highly curated network of vetted digital marketing professionals who are best in class at what they do. We’ve interviewed them. We’ve seen their client metrics and we’ve accepted them into the network only after they’ve checked the necessary boxes. At Credo we specialize in helping companies find and hire the best digital marketing firm or consultant for their specific needs, so if that’s you get in touch with us at getcredo.com that’s G-E-T-C-R-E-D-O.com and click the find a marketer button in the top right navigation.

John:
Hey there, what’s going on? John Doherty, founder and CEO of Credo here. Man, it’s good to be back on the microphone. It’s been a little while since I’ve done a new podcast episode, and I’ve recently gotten this itch to get back to creating, to get back to blogging, to get back to putting out new content and to put out content like this on the podcast because this is a great place for me to share just some lessons that I’m learning, quick lessons that I’m learning. This episode isn’t going to be super long. Future episodes probably aren’t going to be super long, but I want to start sharing, just getting out in audio format. This episode is around something that I’ve recently been thinking about a lot. I talked about it with some agencies yesterday, talked about with an agency owner today and something I’ve really become convinced about is the need for processes within a business. Your business straight up cannot be scalable if you do not have documented processes that you can hand off to other people for them to take care of so that you can go and solve other problems.

John:
So yesterday I was talking with an agency on Credo about their sales process. This agency, this customer has been with us for four-ish months now, four maybe five months now. Honestly, they’ve been struggling to close work. We’ve got some great deals onto their calendars and other agencies are winning them. I think something like 25% of the projects that we have matched them up with that we have scheduled them to speak with were won by another agency that looks very similar to their profile. And so what I try to do is I try to hop on phone calls with agencies that are struggling to close so that I can try to help them get back on track. Point out some things in their process that they need to fix, things to add in, things to take away, things to start doing, things to stop doing, because I’ve seen a lot of work get closed and I’ve seen a lot more work fail to get closed and found the process that works really, really well.

John:
And basically this agency’s process boiled down to we had an initial call, and then we let the prospect tell us what they want us to do next. Send a proposal, have a follow-up call, that sort of thing. That’s not a process right there, you all. That is an abdication of responsibility, especially when it comes to sales. You need to have a process that you go through, and of course there’s a little bit of… There can be some flexibility in there if they need a third call, that’s fine, but letting the client drive or letting the prospect drive it, that’s not the way to actually win work. Of course, we’re talking about sales specifically here. In my opinion, any process is better than none. I wouldn’t even call that a process of course, but there are also better and worse processes that work well, and it’s really, really useful to learn from others.

John:
I’ve recently been reading Dan Sullivan’s book, Who Not How, which was recommended to me by my coach, Dan, who I’ll be talking about here in just a second. But basically Dan Sullivan talks about at some point it’s not about how do I do this thing, it’s about who do I get to do this thing for me, or who has done this before that I can learn from so I can go and do it if I don’t have the revenue to hire them to do it. And talking about hiring, I’ve been hiring here at Credo recently. And honestly, I’ve been struggling with it. I’ve been trying to hire an executive assistant sales support role going back and forth. Is it full-time, is it part-time that sort of thing. Recently decided that it’s actually two separate roles I was trying to collapse into one and make it part-time, and it just wasn’t working.

John:
It’s actually a full-time role and a very part-time role, but I’ve been struggling with this, right? And hiring, it turns out is really its own skillset. And because I’m tired of not succeeding at it, I need to get these two roles hired so that we can continue to scale. Today, I actually got on the call with the COO of a friend’s company. They offered it and we hopped on the call. This person does all of the hiring. I think they’re like 60 people now or something like that, and he’s really, really good at it. Has a set process, so I was like, “Hey, let’s go ahead and hop on this call.” He offered it, as I said, and in 30 minutes he took me from blocked and frustrated to clear on the process that I need to follow to hire successfully.

John:
Of course, there’s going to be hiccups along the way. He pointed out some areas I’m going to need to tweak things. I might need to move around in order to get the right applicants, right number of applicants, that kind of thing. But I have a process to run with. I didn’t even have the foundation of it and he gave me that. So this is very similar to actually another process that I love that I have R&D, robbed and duplicated, as Dan who I’m about to talk about here, talks about, so I’m giving Dan totally the credit for R&Ding this. Dan’s a coach for software businesses, and he does onboarding calls for new clients or his team now does onboarding calls for new clients. When I joined a year and a half ago, he was still doing them, but he has a specific process and a worksheet that he works through.

John:
He pulls it up on his iPad, shares the iPad, goes through the questions, kind of goes on down through it, gets the metrics that he needs and then backs into the things that you need to do and trainings that you need to watch and questions you need to ask and people you need to talk to, and that sort of thing in order to hit your goals, right? Full process that now he’s been able to hand off to three or four other people in order to do it well. I’ve even taken personally this framework and I’ve applied this, created my own very similar framework for the coaching calls I do through Credo. So hiring calls, marketing, [inaudible 00:06:03] calls. I have a process that I take them through. A lot of it that I learned from Dan and from some of the things that he does, but it’s a very set process so that then we ultimately get to the goal, get to the thing that the person that I’m speaking with that is paying me for my time is looking to accomplish.

John:
And we also do this on the full company side, right? We have gotten into a process. I have a process for creating playbooks for documenting everything that we do, how we do it, and then a central place for storing it. In our case, that’s Trello. I have a Trello board and then I have marketing, finance, development, customer success, all the various things that we do within the company, and this makes it super easy. When we hire someone, I can hand it to them. I can say, “Hey, here are the videos that you need to watch within SAS Academy, let’s say. Here are the playbooks that you need to look at. These are the things that you’re going to reference, because these are the things that you do.”

John:
And we don’t hire until we have these things playbooked, right? Basically all the training they need is playbooked there. And of course, there’s going to be one-on-ones, there’s going to be questions needed. We’re going to have to show them some new things. Maybe there’s some documentation that’s a little bit out of date in which case we update it as we talk through it, as we realize that it’s not updated. But this eliminates a ton of the manual work, a ton of the… You know, if I was hiring someone every week, I don’t have time to be training someone every week. Even hiring someone every couple of months, it’s still a lot of work. If you’ve hired before, it’s a lot of work to get somebody up to speed. And so this shortcuts a lot of that, and I can create it in a scalable way.

John:
And by the way, one of the things that I love doing here, of course you can write it out, you can take screenshots and whatever. Those do get out of date. I was actually trained as a documentation writer, technical writer. I don’t know if many of you know that, but I was actually trained as a documentation writer, so I’m totally fine writing documentation, but I’ve also been using a tool called Loom, L-O-O-M.com, which is basically it can put you down in the bottom corner here, if you’re watching the video, down here in the bottom corner and share your screen and click around and they can see where you’re clicking. It’s really, really useful for shooting a quick three to five minute video showing someone how to do something. My team even uses it day-to-day. My CTO and I communicate that way giving feedback on specific things, which is really cool.

John:
So to wrap all of this up, I am firmly convinced that the only way to really scale a business in a sane way is through having processes that are repeatable. Either you learn them through trial and error, right? Which a lot of us do, or if you can find the person that’s done it, then you can shortcut the process and you can learn quicker, right? They might do it for free as this COO I spoke with today did. You might need to pay them for their time or buy their book. That might be the best place to go, highly recommend doing that. But you can shortcut to getting to the right process by learning from people that have done it before, and the sooner you create processes in your business, I’m telling you, the sooner you create processes in your business, the sooner your business is going to become more sane.

John:
Because if everything is custom, everything is bespoke, then nothing is scalable and your company is going to suffer for it. If someone great leaves, the work might not be up to quality. I think a lot of times people are scared of creating processes because they’re afraid that the quality is going to suffer. Actually processes let you do better work because you know that the process works, and so it also doesn’t shortcut the creative process, honestly. I think it frees you up more to be more creative because you don’t have to go back and remember, “Oh, how do we do this thing? How do we log in here?” That sort of thing. It’s all there within the playbook, read the playbook and follow the playbook, and then you can go and do the creative work. Do the research, do the writing, whatever it is that you’re doing, you can do that better because you’ve gotten all of the base things taken care of.

John:
I’ve seen this and I’ve been part of it at agencies before. I see it a lot with our customers, Credo’s agencies that are struggling to scale because they don’t have a good process for doing things. And of course, when you’re early on, you miss any time to the business. You go from, 50K to 500K a year in revenue, everything breaks. You go from 500K to 5 million, so I hear, we’re obviously nowhere close to there, but you go from 500K to 5 million, everything breaks. You go from one to two people, everything breaks. You go from two to five, everything breaks. Five to 20, everything breaks. 20 to 50, everything breaks. 50 to 100, everything breaks, right? Stuff is constantly breaking but by keeping on updating this, it’s going to make your life a lot more sane.

John:
So consider this a kick in the butt. Some tough love, if you will, to go work on creating processes for your business. At the start, I actually dedicated like half a day every week to go and create some processes, and I created a Trello board, created those lists and said that these are the things that we need to create documentation about. I went and I created a doc for each one in a Google Drive folder, and then once that playbook is completed, then I put it into the description of the Trello card on that list, and then I move on to the next one. And so it’s going to be a bit of a process to get it there for your business, especially if you have a lot going on, but of course if you have people, you can also delegate this as well. Create the framework, do a couple of them yourself, shoot a Loom, show them how it works, hold them accountable to getting it done, because this is extremely high leverage for your business.

John:
Hope that’s helpful. I’m John Doherty, founder and CEO here at Credo, and I’ll talk to you later. Peace.

The post Why you need processes for your business (especially sales) appeared first on Credo.

https://getcredo.com/wp-content/uploads/2021/02/Raise-Your-Prices.mp3

I hear from way too many service businesses who haven’t raised their rates in way too long. Some of them, their teams are even begging them to raise their rates!

So here’s the newest episode of the CredoCast. Why you should raise your prices as a service business.

We cover:

• How you’re losing money (not just not making it) every year if you’re not
• Why higher rates leads to happier and more successful clients
• How to raise your rates so you don’t screw your revenue

Transcript

John:
Hey there everybody. Welcome to this episode of the Credo podcast. I’m John Doherty, the founder of getcredo.com. On this show, I interview smart marketers and entrepreneurs who can help you grow and scale your business through great digital marketing. Every now and then I do a shorter me only episode teaching you something that is on my mind specifically. This episode is of course sponsored by getcredo.com, my company, where we have a highly curated network of vetted digital marketing professionals who are best in class at what they do. We’ve interviewed them. We’ve seen their client metrics and we’ve accepted them into the network only after they’ve checked the necessary boxes. At Credo, we specialize in helping companies find and hire the best digital marketing firm or consultant for their specific needs. So if that’s you, get in touch with us at getcredo.com, that’s G-E-T-C-R-E-D-O.com, and click the find a marketer button in the top right navigation.

John:
Hey, what’s up, you all? John Doherty, founder and CEO of Credo here, back here in your ears, talking with you about some topics that I have come across recently that I’ve been thinking about a lot, that people have honestly been asking me to share about, and I haven’t been doing it. So I’m getting back to it. So welcome to another episode of the Credo Podcast. Super glad that you’re here. Today, I’m talking to the service business owners out there, really any kind of business. It doesn’t have to be a marketing agency. You can be a coach. I don’t know. You can be teaching people how to build websites without having to write a line of code. I don’t care what it is.

John:
To shout out to you, Tara Reed from Apps Without Code, asked me to go deeper about all this. So Tara, this is for you. So the topic here is about pricing and about raising prices. People often ask me, they’re like, “Well, why should I raise my prices? I don’t want to be greedy. I don’t want to overcharge people,” that sort of thing. What I find honestly, is that the first one, I really, really… I respect both of those, but I think that they’re both false statements, right? If you’re like, “Well, I’m happy where I am, making the money that I’m making. So why should I raise my rates?” Right? Or you’re like, “Well, I don’t want to be greedy. I don’t want to act like I’m just in it for the money,” that kind of thing.

John:
The reality is you’re running a business here, right? I firmly believe that you can provide better services to your clients and have a saner life so you don’t have to make more necessarily. You can make the same amount and work less and focus on other things, have more time to do the things that you love doing, right? You don’t have to work… What I often find is people that are saying those things that, “Oh, I’m happy making what I’m making. I don’t want to be greedy,” that sort of thing, the reality is they’re working a ton. They’re working a ton.

John:
They’re stressed out. They’re not getting time with their family, their kids, to pursue their hobbies. Their health is probably a little bit. So I want to help people fix that. I exist on this earth to help people fix those problems to live a fuller business life in that way, right? I believe that entrepreneurship can drive incredible change in the world and incredible change in people’s lives. So when people ask me like, “Why should I raise my rates?” There’s really three specific reasons that I want to cover today.

John:
Number one, did you know that you’re literally, if you’re not raising your rates yeah every year, and I think you should review your rates every three to six months, I actually think you should always be raising your rates, but at minimum reviewing it every three to six months, and at absolute minimum reviewing it every year, if you’re not raising your rates by at least 3% every year, you’re literally losing money every year due to inflation, right? You’re doing the same work for less money because, not like top-line, but your expenses are going up, right? You’re giving people raises. Software is getting more expensive. You’re growing your email list. You have to pay more for your email software. All these sorts of things go on. So if you’re not raising your rates, you’re literally losing money every single year due to inflation.

John:
Number two is if you’re not raising your rates, you’re making less per hour every single year that you don’t raise your rates because you’re getting better at what you do. Now, I don’t think hourly pricing is good. I don’t think anyone should do hourly pricing, or it should rarely be done. When we were running kind of an escrow marketplace service through Credo, which we sunsetted about nine months, 12 months after we launched it. But we didn’t even do hourly billing because I don’t think hourly billing aligns incentives on either side, specifically for this reason that I’m talking to you about.

John:
Because you’re making less money per hour and having to sign more clients and thus work harder to make the same amount of money if you’re not raising your rates because it per every year that goes on, shoot, every three months that goes on, every month that goes on, you should be getting better at what you do. You should be getting better at what you do, figuring out processes and getting quicker at what you do. So if you’re doing that, you’re literally making less money per hour by charging by not raising your rates. You’re being penalized for getting better at what you do and being more efficient at what you do, which is why I don’t like hourly billing on the supplier side, on the agency side, which is probably where you are.

John:
Number three, you need to close more clients meeting your expenses, right, if you don’t raise your rates because of what I just mentioned, that the better you get at your work, you should be making more and working less rather than working more, right? So it’s going to lead you to having to, if you’re not raising your rates, it’s going to lead you to having to close more clients, which is going to add to the stress, it’s going to add to the workload, right? It’s not a one-to-one relationship. Every client that you sign, it’s not just the 20 hours that you sold them, but it’s increased mental overhead and operational overhead because of invoicing and all of that sort of thing, right? It’s more work than just those 20 hours that you signed to deliver to them every month for whatever service it is that they know decided to pay you for.

John:
So the question comes down to, now that I’ve convinced you… It’s not even an argument, I’ve convinced you, right? Now that I’ve explained all of this to you, let’s talk about how you raise your rates. Number one, I don’t think you have to go and do it on your existing clients yet. Actually, I would say, don’t go and do it on your existing clients. Now, if you haven’t raised your rates in at least 12 months, and for a lot of you it’s probably 24, 36 months. I recently pulled my Twitter followers and got, I don’t know, a hundred plus responses maybe. There were some that review their pricing every three to six months, but a lot of it was like 18, 24 plus months. If you’re doing that, you are under priced for sure, and probably your clients know it, right?

John:
At one point when I raised rates on Credo, which by the way, we 13X’ed our pricing on Credo since 2017, and we still have a lot of the same customers, because we were crazy under priced. I had some people actually say, “I was wondering when you were going to raise your prices,” in which case you know that you waited too long. But you don’t have to go and do it on your existing customers yet. Number one, raise it for new prospects. Something that I tell people to remember is that your current… The person you’re currently pitching doesn’t know what you quoted the last person. Remember that. The person you’re currently pitching does not know what you quoted the last person.

John:
So you quote them say $1,500 for this, whatever, 10 hours worth of work. They don’t need to know that the previous person you quoted them 1,300 or 1,400 or 1,200. It does not matter to them because what you quoted that last person is not the price for them. It is not your current price now. Your price is what you just quoted them, right? If they come back and say, “Can you do a better price?” Then you ask them what scope they want to trim out in order to get down to that price that they would prefer to pay, right? You don’t just reduce it because they would prefer to pay less. You charge them what they need. You charge them what it’s worth, right?

John:
You have to believe that what you are charging them is what it’s worth, right? If you don’t, right, then maybe you are price gouging them, which you definitely should not be. But saying, you know what? Other people are charging this. I know other people are charging this for same amount of work. They’re charging more, but they have less experience. That means that you need to raise your rates right there, right? If the market bears it and people pay it and they stick around, then it’s a reasonable price is my take.

John:
Number two is aim to get enough extra income coming in based off of this through these new clients, so you can keep paying your bills even if half of your existing customers left when you raise rates, right? You do need to raise rates on them eventually. We all need to raise the rates on our clients eventually because of what I said at the start, that if you’re not raising rates, you’re literally losing money every single year. But you need to set a goal of raising enough new revenue that you can… By not offering extra services, by the way, just charging more and charging better that even if half of your current clients that are on your old billing levels left you, you would still be able to pay all of your bills, right?

John:
Of course, this means that you have consistent lead flow and all of that. You’re not living hand to mouth and afraid you’re not going to be able to pay your bills. I’m trying to help you live a life of abundance here, right? So you’re going to be charging more. You’re going to be making more, and then you’re going to raise your rates so that you can provide better. Honestly, if you’ve raised your rates by 25%, right, if 25% of your clients leave you, which they won’t probably, almost definitely, I’ve never seen it happen. Everyone’s scared of it and it never happens. But if you’ve raise your rates by 25% and you’re charging 25% more and 25% of your clients leave, you’re still making the same amount of revenue, right, and doing less work because you have 25% fewer clients.

John:
That’s a win to me, right? You can spend more time with each of those individual clients and be able to get them better results, and you can probably hire, right? Then you bring on a couple more clients. You’re still down a couple of clients. You’re still making more and you can afford to hire better contractors and better team members. You can give your team members raises, and they’re not as burnt out, right? All of that. It’s all good things by raising your rates.

John:
Number three, how do you raise rates on your existing clients? What I do is I give them a heads up. I say, “Hey, just so you know, we’re going to be raising rates. On this date, your rate is going to go from this to this. I understand that having your rates raised is never fun. If you can’t afford the new rates, and I’m happy to help you find another provider, I have some people I can introduce you to, but we need to do this in order to keep up with the market and to keep providing you the service that we’ve been providing you and better service.” You’ll be surprised how many stick with you, right? As I said, you’ll probably hear somebody be like, “Well, I was wondering when you were going to raise your rates,” right?

John:
If you’re getting them like a 13X, 10 X whatever return on their investment, then they should have no problem paying your new rates. Some of them will. That just means that they’re not the right client for you anymore. They may have never been the right client for you, but they were willing to pay you and you needed the revenue so you took them, right? By charging better rates, by charging higher rates, you’re going to end up with better claims, always.

John:
As I said, we’ve raised our rates 13X since 2017. A lot of our current customers have been with us since then. I actually haven’t had anyone churn out because our rates are too high, which means you probably need to keep raising our rates. We even have customers come back to us, right? We were working with them in the past and their price was say 750 a month. Then we’ve raised our rates and it’s double that now. They come back when they’re with a new agency and they pay it because they see the value, right? These things, raising rates doesn’t keep people from coming back to work with you and the good ones are going to come back.

John:
Then number four, a great way to have consistent reviews of projects, be able to upsell, cross sell, even raise rates and just get into a consistent cadence of having these types of conversations, what I would coach you to do, what I do coach you to do is with your new clients, build in consistent reviews of the project. Alsogo back and do this with existing clients and say, “Hey, every three months, I want to get on an hour long phone call with you. We can review the metrics from the previous quarter, make sure that we’re tracking towards the goals that you want to hit, set goals if we don’t already have goals set, and then we can check in every quarter and make sure that we’re getting towards your goals.”

John:
What this allows you as the service provider to do is it allows you to expand the project, allows you to have the conversations about raising rates, if you need to, but also allows you to expand the project, right? So if you’re hitting your goals, right? I mean, just doing the things that they’re paying you to do and hitting the goals that they want to hit, right? As long as they’re reasonable, of course. In that case, you keep on marching forward. Then what you can do then is if you offer auxiliary services and say like, “Hey, we’ve been doing SEO together for six months, right? We’re kicking butt. We’ve increased organic traffic by X percent. From what we’re tracking analytics, you’re getting this much more revenue from it. But did you know that we also offer PPC, right?”

John:
You’re not doing any pay-per-click, but let me tell you about these clients that we’re working with that are in a similar space to you. It’s a similar kind of business, and these are the kinds of results that we’re getting for them. I think we can really expedite your results and do it profitably by investing in PPC. Are you open to that conversation?” Business owners, if they’re smart, they’re not going to say no to that, right? So this is a great time to talk about that with them.

John:
So that’s my take on raising your prices on, and why you need to do it first off. Because number one, you’re losing money every year if you’re not due to inflation. Number two, you’re making less every hour every year that you go on and get better at your work because you’re getting more efficient and you should not be penalized for being more efficient and being better at what you do. Number three, you have to, if you don’t raise your rates, you have to close more clients in order to keep meeting your expenses because your expenses are going up every year. I can guarantee you that. If your prices are not going up as well, then you’re going to have to keep closing just more and more and more clients. It’s going to feel like a hamster wheel. It’s going to feel like a job, and it’s not going to be a business that is sane and scalable for you.

John:
So I hope that’s helpful for you, Tara. I hope that’s helpful for you specifically. That’s my take on raising your prices. I’m John Doherty, founder and CEO here at Credo, getcredo.com, where we help companies find and hire the best digital marketing firms and help digital marketing firms get more great clients. So that’s it for tonight. Peace out. I’ll talk to you soon.

The post Why you should raise your prices appeared first on Credo.

https://getcredo.com/wp-content/uploads/2020/04/Marcel-Petitpas-on-Agency-Operations-to-Optimize-Profitability.mp3

Is your service business optimized for profitability? Do you know where you are making money and where you are bleeding money?

Making the agency model work comes down to three things:

1. Hiring good people who get clients results and help you retain those clients;
2. Charging the right prices for your services;
3. Getting proper data on work to know which teams and projects are profitable and which are not.

Marcel Petitpas is the cofounder and CEO of Parakeeto, which is a soon-to-launch agency software company that, as they say on their homepage, “automates your reports so you can simulate decisions & make more money.”

As he says:

The goal is to help make it easier for service businesses to track the critical metrics that determine their profitability which is a notoriously hard thing for them to do unless they’re a big enterprise company and have hundreds of thousands of dollars for enterprise licenses for software. So if you find yourself building a spreadsheet to try and figure out simple stuff like, did we make money on this project? That’s the problem we’re trying to solve.

Resources mentioned

The resources mentioned are:

• Parakeeto
• Parakeeto Agency Toolkit
• Dan Martell’s SaaS Academy
• Credo
• Databox

Transcript

John Doherty:

Hello everybody. Welcome back to the Credo podcast. It’s been a little bit since I’ve done one of these episodes but trying to get back to it. I’ve been producing a lot of content other places, on the blog, on YouTube, writing a lot of emails. All of that, but kick starting this back again because I’m recognizing that I’m not an expert in everything. There are a lot of people out there that are super, super smart. I’ve been doing a lot of solo episodes on this in the past but I’m trying to get back to a bit of a balance, of solo episodes teaching you things but also bringing on experts, people that I listen to, that I respect, often friends of mine, and letting them share their genius with you as well.

John Doherty:

So today, I have Mr. Marcel Petitpas from Canada on the call with me. Marcel and I are both a part of SaaS Academy, which is Dan Martell’s group coaching program. Marcel and I have become friends over about the last year or so. He’s a marketing wizard.

He’s phenomenal at what he does, especially with Facebook ads and that sort of thing. He’s helped me out a ton, taught me a lot, helped out Credo a lot as well. Basically what he says, is he helps high growth creative agencies, consultancies and service businesses track the right metrics and maximize their profitability. So now only is he a phenomenal marketer but he’s also a phenomenal business mind. I’m really excited about this because agency operations, agency profitability, to be completely honest, is not something I know a ton about. Or it’s not something that I would consider myself a world class expert in versus Marcel is. He is the co-founder and I believe CEO of Parakeeto. Marcel, welcome to the show. If you would, introduce us. Tell us about Parakeeto, tell us about yourself.

Marcel Petitpas:

Thank you for the very generous and kind introduction John. It’s an honor to be here and I’m excited that anyone is tuning in to listen to this. I hope that I’ll be able to share something that is going to be valuable. Yeah, to kind of summarize what I do. I’m an agency profitability consultant. I’m also a business coach and I am the head strategic coach at SaaS Academy so I’ve spent a very big part of my career helping business owners become more successful and particularly have a focus on software and marketing or consulting businesses.

Marcel Petitpas:

What we do at Parakeeto is we’re building a set of tools. The goal is to help make it easier for service businesses to track the critical metrics that determine their profitability which is a notoriously hard thing for them to do unless they’re a big enterprise company and have hundreds of thousands of dollars for enterprise licenses for software. So if you find yourself building a spreadsheet to try and figure out simple stuff like, did we make money on this project? That’s the problem we’re trying to solve.

John Doherty:

Awesome, awesome. I love it. And I agree, it’s a deep deep world. It’s something that not a lot of people are doing well. Often what I find, is a lot of agencies, especially smaller ones, are doing a lot of bank account accounting, where it’s do we have more money in our bank account this month than we had last month? But they’re not looking at, was this project profitable, was it not? What should we be selling more of? What should we be selling less of? All of those sorts of things.

John Doherty:

I’m curious about the why behind the what. So you told us what you’re doing, but why? Why is agency profitability a focus for you? What’s the background story there? I don’t even know this, so all you listeners are getting this for the first time, getting abreast just like I am.

Marcel Petitpas:

Yeah, it’s really interesting. I think like most people that work or had their own agency, I left that world to go into software because it was much sexier. I didn’t really know at the time that it was so much harder. That’s a lesson that I learned later on. But I actually started… My first business ever was an agency and we were doing virtual reality services for real estate agents. So we would go in, this was back before you had Mad Report. This was right around the time that things like Mad Report were coming online. At that time, you still had to buy a DSLR and you had to get this special rig and you had to take a bazillion pictures and you had to stitch them altogether and you had to take those stitched together 360 images and put them into a virtual software and create a 3D model of the house and create a virtual experience.

Marcel Petitpas:

So that’s what I was doing. I hated it. I realized that real estate agents were so cheap that they were never really going to be willing to pay me what I needed to scale the business and reach the unit economics. I’ve always been that kind of person, that is validating the unit economics before I even start validating the idea to figure out if they can scale. I was very early on in my agency when I figured out, I’m just not able to drive up this price. Real estate agents in my market at the time were just not willing to pay more. I saw the unit economics were not going to work and I realized at that moment that it was really challenging.

Marcel Petitpas:

Then I left and said I want to build a software company. Fast forward like three years, this is after I met Dan. We became friends. I tried to start a couple of other businesses. I ended up becoming a consultant and a speaker and did that for a year professionally, then got into Dan’s world. Then we got a phone call one day from Jarrod Ferguson, who you might know from SaaS Academy.

He runs an agency out in Boise. He just said, “Dude I’ve got this problem. I am sick and tired of building spreadsheets to answer questions I’m asking myself everyday. I’ve looked out there and the only options that exist is moving my whole team off of the tools that they know and love now into an all in one platform. It feels like a compromise and is super expensive and we’re going to grow out of it in three years. Or option number two is I try to build my own tool.” That’s basically the options that they had in front of them. Or take a BI tool, like Tableau or Databox and do a bunch of custom dev on top of it and then you have this half baked thing that you’ve got to maintain.

John Doherty:

And it’s really expensive.

Marcel Petitpas:

At the end of the day… and it’s super expensive. So at the end of the day there just wasn’t a good solution for doing this stuff and that set us down the path to building Parakeeto which started as a consulting company. It still is largely a consulting company today. Of course our minimal viable product was let’s actually go out and just help agencies solve this problem and build a bunch of small tools to help make that process more efficient. We started building models. We started building spreadsheets, really started becoming experts in this field over a couple of years. Then started back channeling, building software off of that and now we’re getting to a point where we’re getting ready to launch the first real version of Parakeeto. We’ve had many different versions in beta. We’ve spent a lot of time making sure the product is right. We’ve learned a lot from that. We’re looking forward to a launch hopefully by the end of this summer is the timeline that we’re looking at.

Marcel Petitpas:

That’s the back story on Parakeeto. That’s how we got here.

John Doherty:

I love that. I love that. I learned a lot of new things in there. I’m a big fan of building the things for when people tell you they have this problem. What would you pay for that? That kind of thing, and building the thing. Also dog fooding it yourself. I built Credo out of my own consulting agency side in house, hiring agencies and intel consulting. The sales process that I teach and the sales process that I’ve used to sell a lot of work, so that’s really the best way to build a business like that.

John Doherty:

This isn’t a topic that we’ve covered at all before on the Credo podcast. We’re often talking about marketing and that sort of thing. But I love this because it’s just an intrinsic part about building a service business. One question I have for you is, what are these… Profitability metrics is something you talked about, and spreadsheets and data and all that. What are the main profitability metrics that you coach agencies to know or that you give them insight into that does that light bulb and that holy shit moment that gets them to that, this is amazing. And how have you seen that knowledge affect their businesses?

Marcel Petitpas:

Yeah, I think the biggest thing that I spend so much of my time talking about and helping agencies understand is how the service business model is unique. How different it is from a product business or even a software business. There’s a lot more similarities there but it’s very different in that you have to earn your revenue. When you make a sale or even when you get bookings, when a client pays you money, that is often a liability unless you’ve actually completed the work. Completing the work costs money. You either have to spend your own time which has a cost, or you have to hire somebody to come in and spend their time to deliver the results. So any kind of business that requires human capital to deliver results to a client is a different beast. This is why doing bank account accounting is so dangerous because your bank account is almost never going to reflective of how much money you actually have available. This requires accrual based accounting. It requires a different set of considerations.

Marcel Petitpas:

So the first thing is understanding the fundamental business model of an agency. The first thing to talk about is how does an agency earn revenue. That’s a function of, what is your capacity? Essentially what you’re selling is time. It’s a controversial thing to say but at the end of the day, when you really quantify your inventory, your inventory is, what kind of people do I have access to, what is their skillset, how much time does it generally require for us to do this thing that we’re selling to the client? Based on that math, how many of those things could we sell? How many clients could we serve in a given period of time. So that’s your capacity, it’s quantifying how much time do we effectively have access to?

Marcel Petitpas:

Then you have your utilization, so how much of that time you’re able to utilize is going to really… How much time you’re able to utilize for things that get you paid is going to determine essentially how much time you’re actually spending working.

Marcel Petitpas:

The last one is your average billable rate, so how much of your time do you need to invest in order to earn a certain amount of revenue? Or the simplest way to say this is, for every hour that my team works, how much revenue do we earn? A lot of people get this confused with their hourly rate or their rate card or their pricing. But what average billable rate really reflects is independent of how you price something, whether you charge somebody by the hour, you charge them a flat rate, they’re paying you a monthly retainer, with all the scope creep and all the additional things and all the little things the client asked for that you’re not charging them extra for and the thing that you messed up and you had to go and redo two times that you’re not getting paid extra for. After all the time that it actually took to get the thing done for the client, how much revenue did you earn for each hour that was invested?

Marcel Petitpas:

When you understand those three numbers you can model out how much revenue your agency can earn in a given period of time. That’s kind of the foundation. If you run specifically a traditional agency, those are going to be the three most important numbers for you to look at as it relates to modeling the potential of your business over a period of time. I spend a lot of time just on that, that fundamental economic reality about a service business. This is how you make money. It’s about getting your people, spending more time going stuff that gets you paid, and then making sure that it takes them less time to earn the same amount of revenue. We do those things well, that’s the foundation for running a successful service business.

John Doherty:

Gotcha. So once they understand those things, and those are the beyond the bank account accounting, do we have more in there than last month. There’s liabilities, there’s recognized revenue, there’s realized revenue. There is all that stuff going on. I guess my question is, there are definitely going to be levers that you can pull.

Marcel Petitpas:

Yes.

John Doherty:

This is why you talk about operations. You understand these three main things that you just went back over. What are some of the levers that you see agencies pull or what are some of the common ones that you tell people to look at or counsel people, consult with people to look at to figure out where is the fat? Where are you losing money? Where are you making money and how does that affect their strategic direction?

Marcel Petitpas:

The framework that we use in all of our consulting and the framework that’s now informing all the product development that we’re doing for how an agency gets more profitable is the following. It starts with the estimate. No matter what kind of work you’re doing, at some point you have to sit down and make assumptions about what you think it’s going to take to do the thing you promised the client. It starts with the estimation process and estimations processes run the gamut. Some are very sophisticated, some are very rudimentary. But at the end of the day, everyone has some kind of process for this, where they pull a number out of wherever it is they’re pulling it out of and they present it to the client. The client either says yes or the client says no.

Marcel Petitpas:

The process is we have to make sure that once we have an estimate, we have the ability to track the costs and the time that are structured in similar way to the estimate so that we can reconcile what actually happened versus what we thought was going to happen. Based on that information, that should then be driving a series of reports and a series of meeting cadences that we have with the team where we can extract qualitative and quantitative data about where we actually have the opportunity to make improvements.

Marcel Petitpas:

So this is where we surface things like, we’ve noticed a pattern that we typically go over budget on website projects by 20%. That should inform a conversation with the team about why do we think that’s happening? Are we not scoping it properly on the front end? Oh, we seem to be really janky on handing off design over to development, how can we streamline that process? That’s where you should start to extract the insight that helps you understand where do we need to make investments in our process, in our tools, in our systems as a business, so that we can become better at doing that thing, spending less time getting that thing done, and then that should then drive back to estimates.

Marcel Petitpas:

So if you get better at doing these things and if your process gets tighter, your estimates will get more accurate and that loop goes on and on and on until you reach the pinnacle which is you have a very profitable agency but also very importantly, you have a very predictable agency. Because you know not only how much money you’re likely going to make on a project, but you know this because you know how much time it’s going to take over what timeline that’s going to happen. You know the relative risk associated with different projects. That helps you do a really good job of resource planning which is something I love talking about because so many agencies overwork their team. It’s just because they’re really bad at scoping projects. The timeline is rarely the elastic thing about a project. It’s still got to get done on Friday but the fact that it’s going to take twice as much time as you thought it was going to, that just ends up getting absorbed into evenings and weekends because there’s nowhere else for that time to go.

Marcel Petitpas:

That’s the framework. So understanding that’s the framework, the things that we want to be really good at paying attention is time tracking data relative to our estimates and expenses relative to our estimates. That’s the foundational tooling that you need to have inside of your agency in order to get some insight. Then what you want to be paying attention to is utilization rates first of all. So that’s going to be trying to set a target annually of 65% for you billable team, and on a weekly basis, trying to keep your team somewhere between, depending on what their role is, 32 and 36 hours a month. That’s generally the kind of bench marking that we set for that. The things that are going to impact your utilization are number one, pipeline. Of course you have to be good at predictably getting work in the door. This is why I only work with high growth agencies because whether I like it or not, a lot of what I do is only actually going to be effective if you are good at consistently earning new business and attracting new clients. There is a point in optimizing for profitability otherwise, but you’re not going to get the upside unless you actually have something to put through that system. So number one is pipeline.

Marcel Petitpas:

Then beyond that, if you have enough pipeline, then you have to consider what are all the things that are taking away my team’s time off of billable stuff? This is things like what is the weekly expectation that you set for them for billable utilization? What kind of culture time do you have in your business, things like internal parties, internal meetings, all that kind of stuff. How do you do your resource planning? That’s really important. Are you officially moving people from one thing to another. Another one that I like to talk about is client delusion, so are you asking a single person to work on too many different projects at a time? That’s one of the biggest utilization killers that we see. If you are in a situation where the nature of your business is very horizontal across people, than are your structuring roles so that people are able to batch tasks very well? So yeah maybe we have to do this one thing for 16 different clients, but if I could do that one thing back to back to back to back to back for all 16 clients in one sitting, it’s going to be significantly more efficient. I’m going to be able to get locked in. There’s way more context switching.

Marcel Petitpas:

So it’s really thinking about how do we remove all of the inefficiencies that is asking our team to do things that is not working on client work and the better we can get at that, the more streamlined we can be about internal communications and meetings and processes and tools, the higher utilization is likely going to be. So that’s utilization.

Marcel Petitpas:

I’m going to stop there before I move onto the next one because I know that was a big one.

John Doherty:

Yeah that was a big one. I guess a followup question that I have there is, first of I think you said 32 to 36 hours a month. I think you meant 32 to 36 hours a week?

Marcel Petitpas:

Yeah, sorry a week. Yeah.

John Doherty:

Yep so getting them into 65, so basically across the year approximately 65-70% utilization. So basically what I assume is that this basically you have all your people. You assume 40 hours a week. This is how many hours they have and as you’re getting down to speccing it out and scoping it out, you’re saying these are the people we need on it. These are the utilizations that they have. Then can we actually pitch this project to make it work and to actually deliver on it as well. Is that fair to say?

Marcel Petitpas:

When we think about utilization the equation for that is basically, you look at any given time period and it’s exactly what you said. You take how many hours per week they’re working, you multiply that by the number of weeks. So in a year, it’s 52. That equals 2,080 hours a year. I know that number in my sleep because I talk about this way too much obviously. Then utilization is just a function of how many billable hours do we actually work in that time period and you divide those two numbers and that gives you your utilization percentage. So on an annual basis, you should be shooting for 65% or slightly higher than that as a benchmark. And yeah, week to week, this is excluding things like time off and so on, on a normal week when no one is taking time off, no one is sick, they should probably be expected to be between 70-90% utilization if they’re kind of a pure production role. There is some nuance around this. You have project managers. You have team leads that have more administrative responsibilities. Their utilization will generally be a little bit lower. When you look through your whole team, you want them to land somewhere around that 65% mark on an annualized basis.

Marcel Petitpas:

Then of course we talk about capacity. Generally what we can do now is if we know what our team’s capacity is let’s say over the next three months and we know what their billable expectation is, than we can do the math and figure out well this is realistically how many billable hours we’re going to have access to in this time period. So it does really help with understanding can we take on this project? Do we need to hire additional people? If so, when? What kind of skills do they need to have? This is where having these numbers and having them figured out becomes powerful because we can actually use them to model and get some forward visibility which is a thing that is notoriously hard for agencies to do when they don’t have access to this kind of information.

John Doherty:

Absolutely. So it also assumes that you have time tracking in place, that people are accurately doing it.

Marcel Petitpas:

Yeah and I’m going to stop and just do a small anecdote on time tracking because this is something that I harp on a lot.

John Doherty:

Please.

Marcel Petitpas:

If you are running an agency and you don’t track time I believe you are being irresponsible as a business owner. Tracking time is just as vital as tracking your financials if you run an agency. Point blank, it just is. Time and the expense of time, whether it’s contractors or direct labor, it’s going to be the biggest time on your P&L, guaranteed. It’s the most expensive and also the most profitable resource that you have in your business so you need to be managing it well. I think the reason that a lot of agencies resist time tracking is because traditionally time tracking was seen as the way that you build a client. Of course most people don’t build a client on time anymore. But time is also the largest variable cost when you earn revenue. When you sell something you have to invest that time to earn it. So it should behoove you to track your time because it allows you to get a lot more insight and make your business more profitable.

Marcel Petitpas:

It is the most valuable piece of data that you can have for making your agency more profitable. It has nothing to do with the client, it has everything to do with you. It also has everything to do with your team. This is the other thing I get pushback on a lot, is the team doesn’t want to track time, they think it’s a pain in the ass. But if you’re using the data properly and you’re doing what we talked about, using that information to inform process to make things more predictable, than guess what? They’re probably not going to have to work evenings and weekends that much anymore. If you get good at it, because your scope is going to be accurate. Your resources plan is going to be more accurate. If they’re incentivized to get bonuses based on the profitability of the company it’s also going to be good.

Marcel Petitpas:

So it’s just a question of having an understanding of what the data is used for and being able to explain that and get the team on board with that. There is no logical reason why anyone working at an agency or running an agency should not want to track time. If they do it’s probably because they just don’t have an understanding of why it’s important and how they can benefit from it.

John Doherty:

I know and I think that’s a good word. I’ve been very guilty of not wanting to track time in the past when I was at an agency years ago. I just didn’t. In retrospect I see that I was basically A, not helping the owners, my bosses, do a good job of running their company. But also, didn’t know why I was overworking. I’d hit May every year and be basically burnt out because I hadn’t had a vacation in five months. I was working 80 hours a week. That’s because I didn’t have a good idea of where my time was going and what I was using.

John Doherty:

So that does lead into the question that I was going to ask you about because I firmly believe and Dan says this all the time, you build the team, the team builds the business. How do you see people really getting their team bought into reviewing these things. We’re so used to, at least in the west, because we were raised in education systems that basically taught us, you did well, you did bad. Here’s your grade. We’re adults, we’re not getting grades. But how do you bring up that conversation? How do you have those conversations or build it into your culture to be reviewing these things and bring them in as kind of almost partners in it. You’re 20% underwater on these web dev projects, but they feel like they’re doing the best work they can. So, how do you manage those things?

Marcel Petitpas:

That’s a really good question. What I want to do is I want to touch on the last metric that I didn’t get to when I was going through the framework. That’s important for the answer I’m going to give to this question.

John Doherty:

Sounds great, let’s do it.

Marcel Petitpas:

So we talked about, just to circle back, we talked about estimation, how that leads to cost and time tracking, how that leads to reporting and conversations with your team. That’s what we’re going to talk about in a moment. Then how that informs process improvement and it goes in an infinite loop and you make more money and you become more profitable and everyone is happy. So of course, around cost and time tracking, we talked about utilization as being a main metric that you want to track. This is one of the biggest mistakes I see agencies make, is they say, utilization great. They stop there and then they tell their team, you need to hit this utilization target. That’s the only metric they hold them accountable to. Of course, if John over here is working for me and I tell John, you need to hit a 65% utilization. If you don’t I’m going to grill you in front of the rest of the team on the next meeting where we talk about these metrics.

Marcel Petitpas:

What’s John going to do if there’s not enough work to do but he’s got this logo that he’s working on. John is just going to make the logo bigger for three hours so he can hit his utilization target. That’s the worst possible thing that John could do because A, it abstains and muddies up our time tracking data and gives us an inaccurate idea of how long it actually takes to get a deliverable done. And number 2, it enforces a really bad habit of over servicing on clients which is very, very hard to backpedal from.

Marcel Petitpas:

So the last and important thing that we all have to pay attention to is some form of profitability metric. I like average billable rate because it’s the simplest one to get into. Average billable rate is basically what is your adjusted gross income, so it’s your revenue minus all the stuff that gets passed on to somebody else, contractors, print budgets, ad spends and so on. So what’s left over for you and the agency, divided by the amount of time it took you to earn that revenue. So how many billable hours did you have to work to get the thing done?

Marcel Petitpas:

You do that math, that gives you the average billable rate, that’s one really easy way to figure out the relative profitability of a project and compare clients and projects against each other and benchmark against a target that you have for yourself. So you can quickly see, is a project above or below that we want it to be at in terms of profitability.

Marcel Petitpas:

The other alternative to that is gross profit, which is really a similar equation. You take your revenue, you take out all the costs of goods sold, and then you take your team’s time and multiply it by their cost per hour, which is easy to figure out. It’s just their salary and benefits divided by their totally capacity in a year, that gives you their cost per hour. You minus all that out and that should get you to a gross profitability level. Again, same thing, you should have a benchmark for where you want to be on a project. Generally that’s going to be somewhere between 50-70% if you’re budgeting things properly. And you should have the estimate to reference. We thought we were going to do a 60% profit margin on this and right now it’s looking like we’re going to do 40. The reason we want to make sure we have that number on the table is because it helps counterbalance the utilization thing. Because now people are not incentivized to add extra hours to hit their utilization target because that’s going to screw up the profitability of the project.

Marcel Petitpas:

What we want to do is get away from using time tracking as a way to A, try to make sure that people are working hard enough. That’s not a good way to measure how hard people are working. And how hard people are working should have nothing to do with the amount of time it takes them to get things done. It should be more about the outcomes that they’re driving and how well they’re interacting with the team and how much they’re helping us get better as a business. Number two, we should not be using time tracking data or profitability data to berate the team about not hitting expectations. Instead as a leadership team, the way that we want to bring these numbers to the table is say, here’s what we expected. Here’s what happening. Why is it happening? We want to seek feedback. Most of the time, it is our failure as business owners to give our team the resources, give our team the accurate scope to implement that right processes or tools, to give them the opportunity to do the thing that we expected them to do. We need to be open to getting the people that are on the ground surfacing ways to actually make these things better. When they come up with the idea, guess what? They’re going to be way more bought into actually getting the thing done and then following that process on an ongoing basis to make things better.

Marcel Petitpas:

This is essentially the cycle that I take all of our consulting clients through. We get their estimation process squared away. Then we start reconciling their time tracking and cost tracking so that it matches up and we can easily pull reports on a regular basis to say, here’s what we expected, here’s what happening and here’s our forecast for where it’s going to go. Then on a weekly basis or a bi-weekly basis, we do a project performance meeting and we look at the at risk projects. We look at the projects that have closed and we ask the question, why did things go really well? What can we learn or replicate from that? Why did things not go the way that we planned? We learn all kinds of things from getting the team involved in that conversation that we never would have found out otherwise. It makes it so much easier to prioritize where we’re actually going to invest in making new processes, how to make our estimates better, how to factor things in that we weren’t thinking about before, how to manage better relationships with the clients, all that stuff. That’s really the long and short of it.

John Doherty:

Yeah, I think that really makes sense. Probably there’s also a part of, when it comes to your team, what is it that motivates them? Is it more time? Is it more freedom? Is it fewer hours so they can do other hobbies? Is it getting bonuses? You can directly tie it back to that. If we hit our profitability metrics, we hit our sales metrics, here’s how we’re doing. We hit our profitability metrics, here’s how we’re doing. Then you get X bonus, that motivates some people. There’s a bunch of different ways to grease that and get everybody on board where it’s not like, oh I’m working to make this agency owner rich. A lot of people don’t understand that agency owners don’t make a ton of money usually. But that’s how it feels because they’re not seeing any extra for doing a better job.

Marcel Petitpas:

Yeah, I love that. That’s exactly what it is. We need to be able to articulate to them, and it’s possible that you have an incentive structure at your agency where people get bonuses if the agency does well. It’s possible that you don’t. But even if you don’t the really big reward from doing this kind of thing is that they’re less likely to have to stay late, they’re less likely to have to come in on weekends, they’re less likely to have these… Because again the deadline rarely moves.

Marcel Petitpas:

I think the fundamental thing is the things that we want to get mad at people for or discipline people for, is not being compliant on process and tracking their time as honestly and as transparently as possible. But what we can’t really justify and be rating people for, is the profitability of a project not being there or their utilization not necessarily being there unless it’s really clear that we had enough work for them to do and that we resource planned properly and they just didn’t do the thing that they were supposed to do. Most of the time, if we’re not hitting profitability on our projects or if our team is not hitting the utilization, that’s our fault or it’s our management team’s fault or it’s a failure in the process that we have set them up with. It’s very rarely falls on the team. I think it’s a question of rethinking how we use this information because it can be used to your detriment and I see a lot of people unfortunately picking pieces of this and using them in the wrong way and it ends up being counterproductive.

John Doherty:

Yeah, totally, totally. I like that, that it comes back on the management team, on the sales team, on that kind of thing, on those levels. Because if you hire a designer and you’ve seen all their work and they do great work, and then they start producing shoddy work and you talk to them. Stuff is coming back for revisions and all that. Maybe it’s the client that just has unrealistic expectations, but that should have been solved in the sales process. They’re a great logo designer, let’s keep that same example going on. But all the sudden they have 50 logos to do in a week. No one is going to be able to do great work under that. So then the question is, are you selling it for too little? Are you expecting too much? There’s a bunch of different ways to solve that as well. So it’s that holistic view into it, but it starts with that time tracking just so you know where is all their time going? If they billed 60 hours in a week, that’s a problem so you have to figure that out.

Marcel Petitpas:

Yeah we don’t want that kind of thing happening consistently. It’s just not sustainable. This is one of the things that I see a lot and unfortunately there are some smart agency owners out there that understand all of this stuff and just continue to exploit people or that are not aware of this stuff and are not aware that their team is actually subsidizing their lack of proficiency at running their agency.

John Doherty:

Right.

Marcel Petitpas:

So the fact that they can’t scope properly, the fact that they’re not very good at resource planning, the fact that they’re not really good at managing relationships with clients and protecting scope, the team ends up paying for it by working twice as much time as they’re supposed to. That’s a legitimate way to subsidize these kinds of overruns. It’s not fair to the team, really.

John Doherty:

No it’s really not. It’s really not.

John Doherty:

Shifting a little bit to the last topic as we wrap all this up. We’re recording this on April 7, 2020. We’re right in the middle of… I’ve been working from home now for four weeks. We’re right in the middle of statewide lockdowns. A lot of other countries are locked down because of the COVID virus right now. We’re in the middle of a crisis in the agency world. I know very, very few agencies that are growing through this. Right now, a lot of agencies are just hoping to stay flat. I’ve seen some that have lost 50 to 60% of their revenue in a week’s time and had to lay off teammates and that kind of thing. So there’s a lot of clients pausing budgets. There’s a lot of clients shrinking budgets. There’s a lot less lead volume to go around. People are taking longer to make decisions. So I’m curious, as you’re talking to agency owners right now, how are you counseling them to handle this and to think through it?

Marcel Petitpas:

There’s basically three priorities to look at when we look at these metrics. The level of priority is, number one, we’ve got to be right-sizing our overhead. Overhead doesn’t make us money. It should be relative to our adjusted gross income. So that’s the first thing that I recommend you do if you’re in a position where you’re forecast for how much revenue you’re going to make this year has just changed a lot. Then you should be basically trying to figure out, over the next six months or year, how much adjusted gross income can you realistically expect to make and then go and review your spending on overhead and make sure that you right-size it.

Marcel Petitpas:

So to give you a sense of what that should look like, facilities, so anything that’s related to your rent, actually putting a roof over your head, utilities, internet, bills, all that kind of stuff, that should be between 4-6% of your adjusted gross income. Then you’re going to want to look at your administrative costs, so that’s going to be maybe part of your salary, if you’ve got an admin assistant, your QuickBooks subscription, your lawyers, your accountants, your bookkeepers, all that administrative stuff. That should be somewhere between 8-10, maybe 12% of your adjusted gross income. Then your sales and marketing, so anything related to acquiring new business, working on your own website, internal projects and the time it takes for that. That should fall somewhere between 10-14% of your adjusted gross income.

Marcel Petitpas:

Your total overhead really should not go over 30%. Ideally you’re keeping it close to 25%. So that’s the first thing I would recommend you do is figure out how much adjusted gross income you’re going to have over the next 12 months and then go review your spending to make sure that you’re not overspending on overhead and cutting that back to where it needs to be. Step one.

Marcel Petitpas:

Step two, you’ve got to increase your utilization. There’s only two levers for utilization. Either get more work or you get less capacity. If you’re in a position where you can go and farm more work from your clients or maybe offer them additional work at a discount or maybe offer them to lock in for a longer retainer by pre-paying and give them a discount for that, that’s an option. If you can take on work that’s not a best fit right now. I generally don’t recommend doing that but this would be a time that you could justify doing it because you really just need to get your utilization up.

Marcel Petitpas:

But if none of that stuff is possible, then you’ve got to right-size the team. The one piece of advice that I have around that, is don’t cut your teams legs off two inches at a time. If you’re going to make cuts, you want to make you don’t have to do another round of cuts for at least a month. There’s a grieving process and you need to give your team time to have it happen, deal with it and get back to normal. But if you’re just lopping off the odd person every week, you’re just dragging it out and it’s honestly a disservice to the people that you lay off because it limits the resources that you have access to, to actually give them potentially some severance or ease that transition or help them find a new spot.

Marcel Petitpas:

If you’re in that unfortunate position, that’s my advice. Do the financial forecast, figure out how much your adjusted gross income is. Again, your direct labor costs or your teams that you have should not exceed 60% of your planned adjusted gross income. Ideally you’re closer to 40 or 50%. That should help you figure out how much do we need to trim around this. Of course look into whatever programs are available in your state or in the United States around easing some of the burden of your employees or maybe helping transition to a part-time work or getting some kind of salary relief. I know there’s a lot of things going on. We have some in Canada. These are some of the things I would encourage you to look at.

Marcel Petitpas:

The last one is, take advantage of this opportunity to move your team to remote and installing new processes. They’re prime for change right now. It’s a perfect time to start setting new expectations for things like time tracking, for things like project reporting and meetings. Because they’re probably in a state where you’ve changed a lot of things and they’re ready for change and they’re installing new tools and processes. Take advantage of that to try and solidify your business so that if you can survive this, you come out the other end ready to scale and ready to be much more profitable and have a lot more insight. Those are my hot tips for where you want to be at this point in time and where you want to focus on if you’re in that position as an agency.

John Doherty:

I like those. Basically your three steps, just to recap are, take a look at your overhead. Make sure that you’re properly… well first of all forecast out what revenue can you ideally expect. Then look at your overhead, 3-4% for facilities, utilities, all that sort of stuff. 8-12% for owner salary and there were a couple other things in there as well.

Marcel Petitpas:

Admin.

John Doherty:

Admin stuff, QuickBooks subscription I think you mentioned. Then another 12-15% for marketing and sales and that sort of stuff. Basically keep that under 30, ideally 25. Then looking at your team, you need to increase utilization or do you need to decrease it based off of what you have or the amount of time that you have available. If you have to make layoffs don’t cut them off two inches at a time. You have to make a deeper cut. Then the third part was… Remind me what the third part was there.

Marcel Petitpas:

Take advantage of the opportunity to get better processes in place, better tooling, better reporting because it’s an opportunity to make those kinds of changes right now. The last thing that I’ll say is that remember in your agency, profit has to do with the volume of time that it takes you to get work done. So you’re always incentivized to get the same amount of work done in less time. But cash flow has to do with length of time to get work done. Because most people, your payment terms are going to have some kind of up front, maybe some kind of payment partway through and then you’re going to get the majority of it at the end. Now might be the time to start thinking about fast tracking work or trying to shorten the amount of time that you’re getting work done in so that you can get more bookings in the door. Cash flow is still a consideration. You still have things going out and you still need money coming in. So think about optimizing your cash flow which has to do with shortening the timelines for your work if you have the ability to do it. That’s another important thing to consider.

John Doherty:

Yeah, and I would say that’s a big one. I see a lot of agencies that… and this is part of the reason why we built escrow into the Credo platform is, there are a lot of agencies that they’ll do work and then they don’t bill anything up front. They’ll do work, they’ll send the invoice at the end, maybe they remember. But that’s actually the number two problem that a lot of agencies have told me they have, is remembering to send invoices. Number one is getting enough leads, number two is remembering to send invoices. Which surprised the heck out of me. Then they send it with Net 30, sometimes they agree to Net 60. Then we know no one ever pays within the net terms so Net 30 becomes 45, 60 becomes 75. You’re now 105 days past the time that you started work before you actually see any money. So this is a big time to shore up those payment terms. If you can, get some money up front. Or at least have it guaranteed that as soon as it’s done it’s getting paid.

Marcel Petitpas:

100%.

John Doherty:

You don’t want to chase for four months after you finish the work. That’s happened, it’s happened to me.

Marcel Petitpas:

Think about right now, you might have some clients that are actually thriving in this environment. I know John and I both know some people that are absolutely crushing it right now because their business is just well positioned. You might have some clients in that position too. They’re looking for a good deal on things because they have cash flow. So now might be a good time to go to them and say hey, do you want to lock in the next 12 months and I’ll give you a 20% discount. Or go to new clients that are coming in and say, hey we’ll incentivize you if you pay this within 15 days. We’ll give you a small discount. You’re incentivized right now to get cash in the door for your business, that’s important. If you’re in a position where you’ve got a client where you really don’t think you’re ever going to see that money because they might go bankrupt or something like that, I don’t generally recommend it, but you may want to look into factoring for some kind of receivables based financing. It’s generally not a great deal but it’s better than getting zero dollars for your outstanding invoices.

Marcel Petitpas:

This is definitely an area where it’s a good time to start revising your payment terms and how you incentivize clients to pay you because cash flow is going to be very, very important.

John Doherty:

I know a lot of agency owners are reticent to give any discounts. You talked 50-60% profitability, man I see most at like 10-15. They’re reticent to give those discounts, so it does start with figuring out why are you only at 10-15? Why are you not at 40 or 50? So right-sizing that, figuring that part out. But then also recognizing that CFOs, they’re job is to get the best deal. Their job is to minimize the outflow for what you’re getting. So if you sign a 12 month deal, we’ll give you a 15% discount. You were at 50% profitability and now you’re at 30-35. There it gets to be much easier for them to say yes, for the CFO to sign off on it right now as opposed to, no we don’t give discounts, blah blah blah. Give them the choice to say no but also increasing the amount of time that they have to give you. Don’t just give them 15% for a month to month. If you want 15%, we’re willing to give you 15% off but we need six months committed or 12 months committed, that kind of thing. You’re actually playing to the CFOs because ultimately it’s not the marketing manager making the choice. They don’t control the budget, the CFO has to sign off on it. They are incentivized to… They have to be cash flow positive as well.

Marcel Petitpas:

Yeah, 100%. Ideally if you’re doing this right, maybe you’re cutting your profitability down right now, but you should be getting more profitable over time. You should be getting more efficient over time. So maybe that goes back up to 40 or 45%. I also want to be clear on some of the benchmarks here because I don’t want people to get confused. When I talk about 50-70%, I’m talking about gross profit on a project. Your net profit as an agency, the industry averages around 10%. I try to get my clients to aim for 25. It is possible to get up closer to 35 or 40 if you’re really squeezing everything out of it. But 25% is a really healthy, highly profitable agency that can scale and cash flow it’s own growth. That’s not an unrealistic place to get to. But there’s always going to be this gap between your gross profitability and your overhead and then your bottom line because you’re not going to utilize your team at 100%. So there’s going to be a pretty significant portion of your direct labor costs, in this case for most people, between 50 and 45%, that you’re just kind of eating, and you’re investing not in having internal meetings, or maybe you’re investing in internal projects or maybe you’re paying for people to go on vacation. That’s part of the agreement that you make when you hire them so just keep that in mind. Those are the benchmarks.

Marcel Petitpas:

If you are confused about this. If you’ve been taking notes or you want to have all of these benchmarks and metrics on one piece of paper, you can go and download that on our website at Parakeeto.com/toolkit. There’s a bunch of stuff in the toolkit but that’s one of the things, is a summary of all these metrics that I talked about today.

John Doherty:

Awesome, I love it. I love it. I was going to ask if you had something like that. So Parakeeto, like parakeet the bird o.com? Slash toolkit. Is where you can find that.

John Doherty:

So Marcel, dude, thank you for being on. This is amazing. I’ve learned a bunch. I’m sure people that are listening to this are going to learn a ton as well. Other than Parakeeto.com/toolkit, where’s the best place for people to connect with you personally?

Marcel Petitpas:

Yes absolutely. I’m also the host the podcast, called The Agency Profit podcast. You have just become a guest on that show as well. So we bring on lots of experts. I’ve started doing some solo casts as well so you can check that out as well. It’s on iTunes. It’s on everywhere. It’s on YouTube. Agency Profitability podcast. Parakeeto.com. That’s where we have our blog. We have all kinds of free resources there. We’re always publishing content. If you want to reach out to me personally, you can find me on LinkedIn. You can find me on Facebook. Or you can just send me an email and if you download the toolkit, you will have my direct email address. Feel free to reach out. I’m always happy to hear from agency owners and if you’re trying to get a handle on these things and you’re confused, just let me know, I’m always happy to be a helping hand. I respond to every email so don’t hesitate to reach out. I just love seeing people action this stuff. It makes me really happy.

John Doherty:

Awesome. Love it Marcel. Well dude, thank you so much. I appreciate it. Everyone go check him out. Parakeeto.com. Download Parakeeto.com/toolkit. He’s a great dude based up in Canada. I’m sure you’ll learn a lot from him as you’re trying to manage your agency or service business in this very interesting time. So Marcel, thanks man. Very much appreciate it.

Marcel Petitpas:

Thanks for having me John. It was a pleasure.

John Doherty:

Hey there, John Doherty here once again. Just wanted to thank you for making it all the way through this episode. If you’ve gotten value from the Credo podcast we’d love it if you would leave us a five star review on iTunes or wherever you listen to podcasts. This really helps us get the message out there and also, if you really really liked it, take a screenshot of your phone, share it on your Instagram stories. Tag me at dohertyjfn. I’ll reshare it for you. Thank you so much for learning, for listening, and for sharing it with others.

 

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