Virtual Roundtable Discussion: Experts and Agency Leaders Talk About “The New Normal”

Marija Kata Vlašić

April 29, 2020

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No one saw it, yet we all knew—one day, it would come. A shift on the globally set stage we built.

A burst of the bubble that was so rapidly growing. Something that would thrust us out of what we knew and inspire a type of renaissance. A rebirth. Overnight, paradoxically, millions stepped into a simultaneous slowdown and fast forward. Armed with technology, we took a moment to bid farewell to yesterday and embrace the present: The New Normal.

Sun Tzu, The Art of War

In the midst of chaos, there is also opportunity.

Downfalls are natural cycles in a booming economy. According to Forbes, on average, they last 17.5 months. During recessions, service providers and agencies are often first in line to feel its effects. Yet, the same industry has an enormous impact on how the economy will continue to move. How so? Because agencies and service providers foresee and drive consumer trends. In essence, they have the ability to influence consumers’ perceptions via the brands they serve.  A crisis like this one, in which we have more access to knowledge than ever before, is a better time than ever to learn and grow.

To discover how global best practices altered and what the future holds for agencies and service providers, we gathered industry leaders from the East Coast of the US to South Africa to talk about “The New Normal” in a virtual roundtable discussion:

Drew McLellan, Director at AMI

Juan Maria Aramburu, CEO and Owner of Keepler

Karl Sakas, Agency Consultant at Sakas and Company

Marko Barić, Managing Director at Typeqast

Michael Ansley, Operations Director at Quintica

In their new survey, Orbit and AMI reveal how our entire industry got hit by the global 2020 crisis. Even so, there’s a certain excitement to this disruption, as we see that some businesses are thriving during the recession. What strategies would you say are working in these times?

Jody Sutter, The Sutter Company: I’m speaking solely from the perspective of marketing and business development for agencies, since that’s my area of expertise. Not all industries are as affected by this pandemic. But others will be less affected and for them, business goes on, albeit under different circumstances. If an agency is in a position to help a marketer do a better job of getting the products they make or the services they provide to their customers in the age of COVID-19, then getting that message out there is appropriate.

Another smart strategy is to look at prospects that are close to the conversion end of the pipeline. Who can you nudge towards a closed deal? Don’t approach it like a pre-COVID-19 sales pitch. Craft a message that says you are open for business and demonstrates how you’re equipped to handle the marketing challenges these companies have today.

Likewise, see if you can, shorten the sales cycle. Can you propose work that will result in a quick, necessary win for these clients? Now’s the time for flexibility and ingenuity in how you package your services.

Ilija Brajković, Kontra Agency: We’re a marketing and development agency, which helps us a lot, because these days our development teams work a lot, developing websites and web shops for companies who want to transform their business.

Drew McLellan, AMI: Most of my agencies (about 250 agencies) have won new clients and/or projects since C19 hit the US. They are selling strategy (for coming out of COVID and in general), PR, digital work, and even traditional advertising.  

Marko Barić, Typeqast: Currently, we see that there is more and more openness to remote work given that pretty much the whole world is working from home. Given this situation, many potential clients that previously rejected working with remote developers have become open to the idea, and are now considering using our services.

Michael Ansley, Quintica: We believe that the ITC sector is well-positioned in this crisis, especially as digital transformation is a key enabler for business continuity that is required to successfully navigate the new normal way of work, and/or deliver on exponentially improved services, capabilities or products (especially for businesses deemed to be critical in the time of the pandemic).

Our strategy has moved from one focused on growth (investment funding, new client base, rapid growth of NNACV, etc.) to one of sustaining/surviving (key customer focus—going wider in terms of customers), retaining current ACV, cost reduction and cash preservation). This pivot has been rapid and we are in the first full month of execution. Our forward P&L (until end of H1 2020) looks positive based on the change in strategy.

While often hard to consider for most companies (especially those with a culture like ours), we are going to being fairly ruthless in leveraging the opportunities now offered by the government that gives us some flexibility in managing our cost base. We are aggressive in securing the backorder book, hitting delivery and therefore revenue commits.

Juan Maria Aramburu, Keepler: I would suggest to focus on the characteristics of your services/products that provide more benefits related to the new scenario we’re living. For example, the ability to work remotely and in a coordinated way. The reduction in costs is also important.

Karl Sakas, Sakas & Company: Prospective clients will buy when they’re ready, not because you emailed them 20 times. Focus your marketing and sales efforts on offering value, not pushing your services.

Hard times come and go (e.g. the Financial Crisis of 2008). What we can do is adapt and learn how to function regardless of the looming uncertainty. Would you say that today, more than ever, it’s crucial not to put all your eggs in one basket? How can we be more flexible with our strategies, clients, services, and staff?

Drew McLellan, AMI: I would not say that at all. Specialists are still more sought after and can command a higher price than generalists.  There’s a reason people go to Mayo Clinic when they’re very sick. Agencies need to find a position of authority that they can own and leverage, so that they’re the go-to resource.

In terms of flexibility with staff—most agencies were already incredibly flexible in terms of work from home, flexible hours, learning opportunities, etc.  I’m not sure there’s much more they can give.

Marko Barić, Typeqast: Client diversification is definitely key. Clients that are heavily tied to the tourism and transport sector are suffering the most. Their revenue has in many cases fallen to zero. With a mix of clients from various sectors, it softens the potential blow of a financial crisis. Additionally, a combination of flexible services and more fixed agreements (maintenance) also helps keep revenue stable when some sectors are suffering.

Juan Maria Aramburu, Keepler: Diversifying revenue sources is the key to avoiding problems in the future. A fluid and transparent relationship with customers is also important so you can exchange potential problems in advance. Appropriate cash management is key to overcome the effects of the crisis by knowing the expenses that can be eliminated without jeopardizing the growth of the company once the crisis has ended.

Jody Sutter, The Sutter Company: From a new business perspective, an agency will always be strongest and best prepared for downturns when it has a strong strategic positioning and demonstrable authority within its competitive set. It’s always harder for an agency to compete as a generalist (larger competitive pool, less ability to affect the sales process, little leverage to command a higher fee). COVID-19 has made it exponentially more difficult.

Ilija Brajković, Kontra Agency: As said, our agency doesn’t do just one thing, which makes us more flexible to begin with. For the future, we will definitely focus more on saving some money “for the bad days”, to be better prepared for a potential crisis.

Michael Ansley, Quintica: As a service provider, we operate in a very cost and customer satisfaction sensitive market, and therefore a very fluid and competitive one. Strategically, we split our business into multiple GTM verticals some years ago. This has allowed us to create focus, competency and healthy internal friction.

Our relatively small sized and tight shareholder/management team made it easy to pivot in strategy. In our case, rather than seeking to go wide, we’ve actually been narrowing down on key customers only (as we are well-positioned based on our area of expertise in telco, i.e. critical services). We have also applied an average of 20% reduction on our fixed costs (payroll, etc.) across the business. Our team is backing this and being flexible so that we can look to ride out an expected downturn of six months.

As we are in South Africa, we have been hit hard by the additional crisis of rapidly weakening currency. We have managed in the volatile FX market for many years, but we did not foresee how fast this would turn negative in March 2020.

Karl Sakas, Sakas & Company: Start by accepting that this isn’t business as usual, and that no one knows for sure what’s next. If you don’t have a therapist yet, now’s the time to start. It’s hard to prioritize self-care during times of crisis, but that’s when you need it the most.

The importance of face-to-face meetings with clients is unquestionable, especially in the agency business where handshakes and perceiving clients’ personalities in conference rooms makes a world of difference. When agencies are facing a work from home reality, that completely transforms client pitches. How is this situation transforming sales strategies?

Ilija Brajković, Kontra Agency: This crisis will, in the long term, create some benefits for us. Clients will realize that online meetings using Zoom or Microsoft Teams are also a viable option. We won’t have to travel to another city just to have a 15-minute meeting—all that will be done virtually.

Karl Sakas, Sakas & Company: Your prospective clients have always wanted solutions to their problems. In a crisis, their top-priority problems have shifted to fundamentals: keeping their job and keeping their business afloat. If you don’t help them meet those needs, don’t try to sell to them.

Marko Barić, Typeqast: Face-to-face meetings have indeed fallen to practically zero. In general, it’s useful to have these meetings at the beginning of potential cooperation, however, given the circumstances, both sides have accepted the realities. Now we do many video calls, phone calls, and emails, which we agree are not as good as meetings in person, but are fine as well.

Jody Sutter, The Sutter Company: Mostly, it’s highlighting the importance of the basics. Elementary stuff like:

Having a game plan for the meeting

Rehearsing content and transitions

Assigning a role for each presenter

Knowing who’s “in the room” on the client’s side and how to include them

Of course, there are technical considerations and idiosyncrasies of pitching via videoconference. These are easy to master as long as you put the time in to do so. The mistake is assuming you can “wing it”.

Michael Ansley, Quintica: We’re still assessing the impact of this. Initially, an anecdotal assessment is that the impact is not negative, but positive. Our sales teams are significantly more productive (without the cost of time to travel), we are in the same boat as our clients and prospects, and we end up focusing more on the quality of content and key positioning in our sales engagements than we did before.

We have to add—we operate in a complex technology and related business consulting world where perhaps it’s actually easier to deliver our sales engagement from remote locations and develop relationships based on credibility than say a marketing agency or similar. Time will tell.

Juan Maria Aramburu, Keepler: Absolutely, this is impacting the sales efficiency, however, we are learning to adapt the speech to the new circumstances, and this is important as it will let us address new customers abroad in other countries.

Drew McLellan, AMI: I don’t think it’s transforming the sales strategy. It has certainly temporarily changed the sales environment. Sure—pitches may look and feel a little different.  But how you sell—your strategy for selling shouldn’t be altered just because we’re social distancing for a season. 

 For any business, the sudden shift to collective working from home was expected to make productivity drop in the first few weeks. How did you overcome this problem? Did you have it at all? What are your suggestions on how to increase productivity and bottom-line profitability during times of crisis?

Marko Barić, Typeqast: At this moment, we feel that the first few weeks of transferring to full work from home didn’t affect our productivity negatively. In fact, we see a rise in the amount of work done. We have saved much time that is lost in transportation, moving around the office building, getting lunch, etc. At home, we have also realized that we sometimes put more hours of work in than usual. So it has definitely surprised us.

Juan Maria Aramburu, Keepler: Since we launched Keepler 2 years ago, we defined a home office policy of two days per week. Our staff is used to working remotely, and our productivity didn’t drop.

Karl Sakas, Sakas & Company: My team was already mostly-remote, and I’ve worked remotely since 2013. Working 100% remotely was a relatively smooth transition, apart from uncertainty around travel as conferences waited to cancel.

Drew McLellan, AMI: It’s interesting that is the perfection when it is not the reality. 95% of my agencies are reporting increased productivity and they are measuring it to the quarter hour. Their employees are delivering quality work and honoring timelines and budgets.

Jody Sutter, The Sutter Company: A lot of us have the unexpected, unasked for luxury of time in our schedules now that clients have scaled back work and layoffs have left fewer team members to manage. Now that the initial shock of disruption is dissipating, consider reintroducing a sense of order to your week.

Agency owners consistently tell me that lack of time is the obstacle most likely to derail their plans for proactive, new agency business. (Somehow, of course, they always seem to find the time to react to an RFP…). Don’t be sucked back into pre-COVID-19 patterns. Use this disrupting event to tear down bad time management habits and redesign your approach.

There are lots of methods out there to inspire you. Here’s the basic approach I use with my clients (drawing on a number of those methods) when I work with them on a 12-Week Action Intensive Sprint:

We work in 12-week sprints and set milestones for progress on strategic growth initiatives for each sprint

My clients schedule blocks of time, 90 minutes to one hour in length, once or twice a week, to work on strategic growth activities

They work from a list of specific action items for each week that lead to meeting their milestones

We track and score their success each week from zero (no action taken) to 100% (every activity on their list done)

We reevaluate based on the score and continue to do what’s working and adjust what isn’t

During busy periods, this method carves out more time on an already-packed schedule. For now, it may simply help you to refocus on longer-term strategic growth initiatives.

Ilija Brajković, Kontra Agency: At Kontra, we’ve been using every possible remote work tool for years. We’re 100% digital, so working from home wasn’t a huge change for us. We use Office365, so we have our emails, files and all collaboration tools in one place. Plus, of course, the best software ever, Productive.

Michael Ansley, Quintica: We have had no productivity drop, and outside of the unforeseen Forex hit, we have maintained our forecasted commercial commits for the Q1, and are on track for April 2020 as well. It is our opinion that the impact will not only be short term, but rather medium to long term. Therefore, any efforts to address productivity need to address both short and long term needs.

I’d say that the keys to retaining productivity were already baked into our business. Most notably, through a decentralized, remote working model across the board. We did very little to mobilize this to meet lockdown restrictions while enabled by all the SaaS solutions we use (Productive, MS, Xero), and led by a motivated and accountable management team.

Recession is always bad news for agencies, as clients start watching every dollar. In 2009, the last year of the Great Recession, United States advertising spend fell by 12%, while it plummeted 9% globally. What can agency owners do now to prepare for a recession?

Michael Ansley, Quintica: In our case, we have pivoted to a focus on key accounts and seeking to rather extend revenue via internal sales that take out the higher cost and risk of new customer acquisition. We are also at the same time managing our cash very, very carefully—down to the dollar.

Ilija Brajković, Kontra Agency: Unfortunately, not many agencies have enough cash reserves. We always invest, whatever we make, we put back into the business. This is a lesson for all of us—always have 3-6 months worth of cash reserve.

Marko Barić, Typeqast: We feel that it’s key that agencies stabilize their businesses and that they focus on ensuring that essential costs are covered (salaries, office leases, key licenses, etc). They also need to properly communicate the status of their business to their employees so that all involved parties are on the same page and can work together to get to a better state. Additionally, owners shouldn’t forget about sales. They should work really hard on ensuring new clients and trying to find new clients and business.

Jody Sutter, The Sutter Company: There’s almost nothing an agency can do now to prepare for a downturn we’re already experiencing. But you can refocus your attention on longer-term strategic growth initiatives to come out of this downturn stronger than you went in. Here are some you might consider.

Your agency’s strategic positioning—define (or refine) it. Test it. Operationalize it.

Define/refine your ideal client profile. Be sure it results in attributes that are searchable on Google or LinkedIn (i.e., “digital marketing directors at colleges/universities” is searchable; “takes chances on bold marketing ideas” is not searchable) and build your contact database with companies and people who fit it.

Don’t have an adequate contact database? Get one and learn how to use it.

Redesign your website (especially if you’ve reworked your positioning).

Rework your case studies, team bios, process description and other essential credentials content.

Reassess your lead-generating content marketing strategy and try something new. (Don’t have a content marketing strategy? Start one!)

Take a critical look at your team, their strengths, and how you might be under-leveraging them on agency new business.

Analyze your closing process. Pre-COVID, were you closing business at the rate you want to? What needs to change? Where do you need help?

Karl Sakas, Sakas & Company: If you’re not prepared already, it may be too late. Focus on fundamentals: build cash reserves, shift to “staple” services that clients continue to need in times of crisis, and identify strategic cost-cutting “tiers” so you’re ready before it’s too late.

Drew McLellan, AMI: This recession has been brewing for the last two years. Most agency owners have been waiting for the other shoe to drop. No one knew it was going to come packaged with a pandemic—but everyone knew we’d have an economic correction. Hopefully, what agencies have already done is:

Have 3-4 months of operating expense set aside.

Managing the agency so that 55% of their AGI is spent on fully loaded salaries, 25% on overhead, and 20% is profit.

Maintaining a 150K/AGI per FTE ratio.

Working hard to not allow any client to be more than 20% of their total AGI.

Have a robust biz dev program that is working hard, every single day.

Investing in their superstars so they keep growing and adding more value to the agency.

Juan Maria Aramburu, Keepler: We must review our service offering to check if it is aligned with the new economic situation. We also have to demonstrate that we were able to keep the company running well during this crisis.

Last, but not least, what can we learn from this crisis when things get back to “normal”, or we adapt to “The New Normal”? What are the key takeaways for running a success during a crisis?

Marko Barić, Typeqast: A key takeaway from this crisis is that unfortunately, bad things can happen very quickly. So business owners should always have plans on what to do when such a situation occurs. Preparation is very important. It will never cover all the possible situations, but it will for sure help and soften the blow of future challenges.

Ilija Brajković, Kontra Agency: We will have less “I survived another meeting that should’ve been an email”. Companies will start using online collaboration tools like Productive even more. We will be more careful with money and money reserves.

Drew McLellan, AMI: I think we can and will learn several things:

It’s easy to get caught up in the media hype that makes it sound like every business is going down the drain. The reality is—85% of agencies are reporting less than a 20% loss of annual AGI because of C19 so we have to stay focused on what is real for us, not what the media tells us.

An agency that runs on good fundamentals and good agency math can weather any storm. Yes—the numbers might tell you to lay some people off or make other concessions, but if you manage to the numbers and make the tough decisions—you will come out of this strong and on solid footing.

There are huge opportunities in any crisis. For agencies, C19 has given us access to our clients C suite like we haven’t had in years. Brand’s in-house marketing departments are going to be cut, which means more work for agencies, and for the first time in several years—hiring will be easier.  There will finally be affordable talent available to us.

If you were a generalist agency that was struggling with your value proposition before C19, and you survive this crisis—you’d better double down on figuring out why someone should hire you over another agency and lean into that point of difference.

Juan Maria Aramburu, Keepler: My main takeaway is that we must ensure that at the end of the crisis, our employees believe that we did everything to keep them employed because in the end, our main asset is talent, and the worst thing that could happen to us is to lose talent.

Michael Ansley, Quintica: Never let a good crisis go to waste. The faster than expected implementation of changes we needed to make as a business will mean we are leaner and faster in “The New Normal”. We have been a little slow in looking at expanding our capabilities to support our go wide in key customer strategy, but as we nail this down, this too will be a strong basis to build on when we move back into new customer acquisition.

Karl Sakas, Sakas & Company: Agencies will stop taking things for granted. And they will finally build their cash reserves.

Mankind Is Shaped For Fight-Or-Flight

As the start of 2020 saw Business as usual shape into The New Normal in the blink of an eye, experts and agency leaders lead by demonstrating agility and steadfastness in adjusting strategies and tactics. To foresee consumer trends and create order amidst chaos, it’s key to identify what is needed and what unnecessary in a business today. Looking for more ideas on how to optimize your business? Read this.

Marija Kata Vlašić

Content Marketing Specialist

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