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Today, on Hubstaff’s Agency Advantage Podcast, I’m talking with Jason Swenk who shares how to use systems to grow your agency.

Jason built his first agency, Solar Velocity, into a $13 million/year business before selling it, and now he shares his expertise with other agency owners.

Having a system-oriented mindset is one of the most important traits you need in order to build a successful agency, and today we dive into exactly what that entails. In this episode, Jason shares why systems are so important, what specific systems matter the most, and how you can set them up so that they are actually followed.

If you think a 20% margin is as good as it gets, then this is the episode for you.

Want to read the interview? Click here to grab the transcript.

Why systems matter

According to Jason, you need to look at the structure of your business before things start getting complex. If you continue to grow and hire more people without concrete processes in place, everyone will be looking to you for a thousand answers they could get themselves if you just had that structure set up for them.

At that point, you’re stuck putting out fires instead of growing your brand or fulfilling your dreams. You’ll also start hitting a sales ceiling, because you don’t know what to improve or change in order to go farther.

If you have a set of processes, then you can look at what’s working and what’s not and do what’s needed to land bigger clients.

8 Systems to help you build a better agency


Jason’s process for improving your agency involves eight systems. The first is clarity.

When Jason started his first agency, he was just throwing stuff at a wall without planning for what they were working toward. He reached for whatever money was offered him instead of figuring out if it was right for the business. This really bites you in the butt when you grow large enough to get employees.

Without the benefit of a clear vision, employees will focus on what’s best for them instead of what’s best for the company, because you haven’t told them what’s best for the company.


As always, Jason emphasizes the importance of finding your niche. If you focus on a specific type of client, you can really figure out a way to be successful.

Instead of blindly copying other businesses and hoping it works, you can look critically at how they grew and apply that to your own business, seeing how they started with a small niche and moved outward. More importantly, once you’ve chosen an ideal client, you can really get to know that client’s needs and pain points.

Then you can speak specifically to them instead of shouting into the void and hoping it sticks. Finally, once you’ve figured out your client and their needs, you can really demonstrate empathy for them, because you can point out that you’ve been in their exact situation and you have a process to get out of it.


The next piece is your offering. Jason emphasizes the importance of finding the right initial size. Starting with a new client and pitching them a retainer right away is like meeting someone for a first date and proposing marriage.

Instead, you want to find the right opening offer so you get a chance to demonstrate your expertise and prove that you are a cut above the competition. Jason refers to this as the offer ladder.

Find a piece of your core business model, like paid discovery, and focus on selling that to first time clients. Once they’ve gone through that piece and they see how good you are, they’re going to pony up more money for an ongoing relationship because they know you’re the best.

It also builds trust with the client. Instead of dumping everything on them at once, by taking it slowly, you’re demonstrating your aim is to provide value instead of just selling a product and moving on.


For prospecting, Jason stresses the importance of diversity. It’s great if you’re super attuned to the ins and outs of Google’s current algorithm and have a system to instantly put your client first in the search results, but what happens when Google changes the algorithm?

Then you have to start from scratch, and that can devastate your business. So choose a bunch of different ways to do inbound marketing. Find a form of rich media that you like, such as videos or podcasts, and then figure out a way to turn that into additional content, like blog posts. That way the pipe never dries up.

Second, make sure you’re doing outbound as well as inbound. Jason has a system for making outbound outreach less frightening: figure out your ideal service and client. Then reach out to clients who fit that profile.

Pick a strategy that works for you, whether it’s cold emailing, meetups, or even just picking up the phone. Anything is better than nothing.


Jason utilizes two shortcuts to make the sales process simpler.

First, he looks at NBAT: need, budget, authority, and timing. Make sure you’re providing what your prospect needs; make sure your prospect has the budget to hire you; make sure your prospect has the authority to hire and pay you; and make sure the timing is right on both sides for your relationship. This makes sure you choose the right kind of client to pursue at the right time so nobody wastes their effort.

Then, once you’ve qualified the prospect, look at what Jason calls the Three I’s. What is their biggest issue? What is the impact on their business? And how important is it to them? This serves two purposes.

First, it gives you much needed information to start your own process. Second, it sells the client on your worth. If you can establish they’ve got X problem and it’s costing them X much and you have a solution to it, you’ve closed the deal.


Now that you’ve got your ideal client in hand, be sure the delivery lives up to their expectations. Jason wants you to think of one question: how can you wow your clients?

After all, the client’s going to be nervous. They’ve probably dropped a significant sum on you, and they want to be reassured that they’ve made the right decision. Now is your chance to go above and beyond and make sure they come back to you.

This might sound daunting, but you just have to find what works for you. Personalization is always a good choice. For example, Jason sends a custom video to everyone who buys his book or joins his classes. It’s quick, simple, and shows how he shines. Find your version and go from there.


The next step is making sure you’ve got your operations in order. From Jason’s point of view, you should never be the smartest guy in the room. Find people who fill in your gaps.

For example, if you’re great at sales but less great at account management, find the best account manager for your team. Have accountability systems in place, so everyone knows how the business is doing and where it’s headed.


The final piece is leadership. Jason says that agency owners really need to transform their mindset from an agency owner to an agency CEO. You’re steering the ship, but you’re not responsible for bailing out every bucket of water.

Instead, you’ve got a handful of primary roles. First, you’re setting the vision and direction of the agency. Again, if people don’t know what they’re aiming for, then they’ll focus on what’s best for their own bottom line instead of the agency’s. So make sure you’re communicating what your business is about to everyone in the pipeline.

Second, make sure you’re coaching and mentoring your leadership team only. You cannot be responsible for everyone in your agency. Instead, your focus should be on your top people, making sure they’ve got the tools to turn around and make their own teams better.

By concentrating your efforts on a smaller target, you’ll be able to influence your whole agency without burning yourself out.



Andy Baldacci: Jason, thanks so much for coming on the show today.


Jason Swenk: Hey, man, thanks for having me, Andy.


Andy Baldacci: Yeah. You were back on … I think it was Episode 18 a little over a year ago, and that was one of our most listened to episodes, so the bar is pretty high for your second time around.


Jason Swenk: Oh, too much pressure. I’m sweating.


Andy Baldacci: For listeners who aren’t familiar with you, can you share a little bit of your agency experience, and what it is that you do today?


Jason Swenk: Well, right now today, I got agency through a proven framework that allows them to grow their agency faster and easier, but back in 1999 … Yes, when Al Gore invented the internet, I created an agency. Well, it was a web shop. I was literally going through the Yellow Pages calling people, being like, “Do you want a website?” Quickly grew that and started to hire more and more people, and started working with big brands like AT&T, Hitachi, Legal Zoom, Aflac, and doing all their websites for them. 12 years later, people wanted to buy us, and the right time, right offer, and we said, “Cool!” Didn’t know what we wanted to do after, but we were like, “All right. Here. We’ll figure it out with this big check.”


Andy Baldacci: Nice. When you sold the agency … We don’t need to dive too much into that, but when you sold the agency, I forget, did you have to work at the-


Jason Swenk: I did.


Andy Baldacci: Acquire? Okay.


Jason Swenk: I did, yeah. I had a two year tour of duty, and then we were just lucky enough. It was either a two year tour of duty, or when the agency got sold again. So, nine months later, we sold it, so my tour of duty was over, and it was pretty cool. Then I got to benefit from two exits. Yeah, it was nice.


Andy Baldacci: I know that since then I’m sure you took a little bit of a break and enjoyed yourself, but since then, you’ve really gone all in on developing systems and teaching what you’ve learned to help other agency owners improve their own business and build a better, more profitable, less stressful business. What was that journey like? How did you get into this line of work?


Jason Swenk: Dude, it was hard. Literally, I was like every other agency owner probably listening. You go, “Man, I’m doing service work. My clients stink. I’m just drowning. It’s hard to make a profit,” all that kind of stuff, but the later years, we set up the right system, so we were making over 45% margins and growing really good. We were over eight figures, and all that. But when I sold, I was like, dude, I’m going to develop a product. This is when Instagram just got bought for a $1 billion. I was like, I didn’t get bought for $1 billion. That’d be kind of cool. I wanted to develop an iPhone app.


I started working on an iPhone app, taking pictures of everything you eat. It gives you a visualization. Yadda, yadda. Boring as crap. I hated it. What I realized was the grass is greener on the side you damn water. I was like, dude, I like winning the big projects, but I still didn’t know what I wanted to do. I was running a blog at the time just writing about general business, and this will relate to the general systems that we talk about in a little while, but I was just writing a general blog. No one was reading it other than my mother, and I was so frustrated. I was like, why are people not reaching out to me? Like [Gary Vaynerchuk or some of these big guys. I was like, I don’t know what to do.


I was lucky enough, like anything else that I’ve ever done good, is I kind of fell into it. But then, when I fall into it, I realize I fell into something and I’m like, oh, I got it. My old competition that we used to beat out started asking me questions and I started helping them out for free and I absolutely loved it. I was really, really good at it. My pain and suffering and what I know about the agency world, even though I can’t enter it right now … I was wanting to create another one when my tour of duty was over.


Andy Baldacci: But there was a non-compete, I am guessing?


Jason Swenk: I’m sorry?


Andy Baldacci: Was there a non-compete?


Jason Swenk: Yes. Non-compete. Yes. I had a non-compete for awhile. I was waiting for that to stop and then I was going to start another one. About eight months before that, I started helping people out for free and I loved it. Then my wife kicked me in the head and said, “Why don’t you do this?” Like any smart wife, and I was like, “Okay, let me try it.”


Andy Baldacci: And here you are.


Jason Swenk: Here I am, yes. Our whole intent now is to be the #1 resource in the world for agency owners so they can grow faster and easier.


Andy Baldacci: I know you’re well on your way there. I’m sure there’s still a lot you want to do, but one of the things that you really do stress in what you teach is the value of having strong systems in an agency. Simply put, why are systems so important?


Jason Swenk: You’ve got to look at the levels that you go through, or the stages that you go through in a business. When you first start out, you’re in this fun stage and you’re like, dude, I just need to get more clients. And it’s fun, and it’s all depending on you. But then when you start getting more clients, it starts to get a little more complex, and you have to bring on people. The people are constantly coming to you to make decisions because they don’t know where you’re going. They don’t have a process. You don’t have the right systems in place. The only way to get through what the predictable success model says … That’s not my model. I can’t remember who it is … But you’re in the white water. The only way to get through it is with the right systems.


So if you find yourself struggling and constantly overworking yourself and hitting that glass ceiling, you don’t have the right systems in place, because if you have the right systems in place, it’s the difference between you struggling or growing and scaling.


When I talk about systems, I’m not talking about technology. I’m just talking about documentation and the right structure. Your probably next question I’ll ask myself.


Andy Baldacci: Appreciate it.


Jason Swenk: There you go. I guess that’s my podcaster interview mode, right?


It really starts with clarity. A big problem that agencies have is they’re relying on word of mouth. You talk to agency owners all day long. A lot of their business and their health and wellness is all depending upon referrals. It’s just not scalable. So then when they start to figure out how do I start generating leads, they’ll immediately go to AdWords or Facebook. But they don’t have the right foundation to build upon, so the first system is really clarity.


I know when I think back at any business I created, I literally got my start from designing a website for making fun of one of my friends that looked like Justin Timberlake from ‘N Sync, and it was call ‘N Shit. I started this website without the knowledge of where I wanted to go, and people started asking me for it. I didn’t know what we wanted to grow into. I didn’t know who we wanted to serve. I didn’t know what I wanted to do, but people were giving me money, so I was just going wherever. I didn’t have that clarity and vision, and if you don’t have that, your employees are going to make decisions based on what’s better for them rather than what’s better for the agency.


Also, too, if you don’t have the clarity of who you are serving and you have that specialization or that niche that can really separate you from everybody else, you’re not going to know how to position your agency. You’re going to look like everybody else. You’re going to be that “Me, too” agency.


Andy Baldacci: Right. With the clarity aspect of it, a lot of times the agency owners that I talk to are what I like to call accidental agency owners. They get started because they have a skill in some sort of service, whether it’s marketing, whether it’s web development, design, whatever. They do that through word of mouth. More people keep coming to them. They look around a couple years later. They have a few employees, but they don’t really have a plan because they haven’t actually stopped to think about what is it that I want to get out of this agency. I feel like without that clarity you’re just going to be flying blind, and that’s the first part of it.


You touched on the second system that I think is something that really can’t be overstated, the importance of it, especially when starting out and that is positioning. In your mind, why is having that niche or having that clear positioning statement so important?


Jason Swenk: It’s what separates you from everybody else. Literally, I look at my competition as cat videos and procrastination. Literally, because if you think about it, how you need to position yourself … Once you decide on that audience, you have to go deep. You have to drill down. Please don’t say small business.


Andy Baldacci: Right. That’s not a small audience. That’s not a niche.


Jason Swenk: It’s a freaking huge audience. Even if you’re looking at some of the big guys …


Here is the biggest challenges. You look at a big guy and you’ll start modeling exactly what they’re doing, but what you should’ve done is modeled how they actually got there. Use Facebook as an example. They started off with Harvard students with Harvard emails. Then Ivy League schools. Then universities and high schools, and then ex-boyfriends and girlfriends stalking their exes. You’ve got to look at where they started, so start there. Then what you need to do is the focal point needs to be on the person that you’re serving, so when you dive deep, you’ll understand what they want. You’ll understand their biggest challenges, and then you need to talk to them all that way.


Here’s what agencies do wrong all the time. They position all the focal point on themselves. If you were telling a story, you were making yourself Batman. If you make yourself Batman, you’re making your visitor, your prospect, Robin. He’s wearing those ugly green tights. Everybody in their own story wants to be Batman. If they are Batman, you need to make yourself Alfred. You need to be the trusted advisor.


That trusted advisor … Especially being an agency, guys. They’re coming to you for advice. Stop taking orders from your clients. Give them advice. Don’t give them options. Say, “Based on your challenge and where you’re at and where you want to go, this is what you need to do.” Then Batman can go do it.


Andy Baldacci: Right. “From my experience,” because I am the expert, “This is what I think would work for, and has worked for people in your similar situation.”


Jason Swenk: Exactly. You need to change the focal point in the positioning.


Then you’ve got to go through a couple of different things. You’ve got to list out, what do they want? Figure out what do they want. My audience, they want to grow their agency faster and easier. Why do you think I say that on the website? Surprise!


Andy Baldacci: You’re speaking directly to what they want.


Jason Swenk: Exactly. Then the next thing you have to do is you have to demonstrate empathy. You have to demonstrate that, hey, I understand your pain. Then you transition into authority; be like, hey, I’ve been there. I’ve ran an agency for 12 years. I’ve sold it. You walk them through a process. Walk them through your methodology, how it’s going to actually work. Make them do a call to action, and then show them what a successful or a bad ending looks like, but that’s how you need to position your agency.


Andy Baldacci: Right. It’s not about how many cups of coffee you drink, or the latest or greatest buzz words that you can fit in there. It’s truly about positioning yourself as the clear choice, who not only understands their pain, but has the expertise required to solve it for them.


Jason Swenk: You got it. No one cares about you. Even on your about page … If you guys go to my about page right now, I don’t mention anything about me until halfway down the page. Almost to the very end. I start off with a question, and everybody thinks an about page should be about you. No. The about page is usually your highest traffic site after your homepage or landing pages because they’re trying to figure out do you understand and can you actually help.


Andy Baldacci: That, especially in a market that seems like it’s getting so crowded in the digital space, it really is hard to stand out. But if you look at the vast majority of agency websites out there, they’re saying the exact same thing over and over again, and barely even changing the words. It’s when you can dial in this positioning and really speak to the needs of your potential clients, then you will stand out. Then it is easier to say, hey, we’re not like the other guys. We’re not like the other gals. We know what we’re talking about and we know how to help you because we understand your business.


Jason Swenk: Yep, exactly.


Andy Baldacci: Once you have dialed that in, what’s next? What system comes after this?


Jason Swenk: I’m going to use an analogy. You’re at a networking event and Andy walks up to you. Immediately, the first version of Andy 1.0, he starts talking to you all about how good [Hubstaff 00:13:24] is and how good their product is. All that. Immediately, you’re going to go, “Andy 1.0, how in the hell can I get away from you, because it’s all focused on you?”


Now, picture on the flip side. Andy 2.0 comes up, starts asking you questions, starts focusing the focal point on you. You’re going to be like, man, I like this Andy. Yeah, because he’s talking about you!


It’s about your right offering. After you get the right positioning, don’t pitch marriage right off the bat. You’ve got to think about if I’m selling SEO services, do I want to sell this huge retainer right off the bat, which is basically pitching marriage or being Andy 1.0 coming up to you, going “Me, me, me, me, me!” Can you slice off a part of your core service and then can you use what I call the offer ladder in order to walk them up to the next level service package? That basically is an easier decision in the beginning, builds trust, shows them results, and then eventually you can charge them more than you would if you’d just start off with a retainer. It comes down to the offering.


Andy Baldacci: Right. At that stage, it’s that road map, the initial service offering, whatever you do want to call it … Often it’s going to be paid discovery, but it is going to be something that is a much easier engagement for the client to purchase both in terms of the commitment, in terms of their time and also money. But it’s something that’s going to give them a taste for how you work, how you think. If you are sophisticated enough to get this far, you’re probably going to show them that, hey, I’m serious about this. I know how to help clients just like you improve it. Then the success rate of upselling from the road map to the full service offering is usually through the roof, because, at that point, they don’t want to work with other agencies. They want to work with you as much as they can.


Jason Swenk: Oh, yeah. The agencies I work with and the agencies that go through my programs that implement this, they’re 1000 times further along than all the other agencies. They win the projects twice as fast. Their lifetime value of the clients are significantly more. They have long term contracts, and their assets are bigger, so then when they do go eventually sell their agency if they want to, their valuation is so much more.


Andy Baldacci: Right. When you work with clients on coming up with that initial offering, do you usually view it as some sort of paid discovery, or how do you think about how to package this together?


Jason Swenk: It always starts with some kind of paid discovery. I always laugh at agencies that go, “Yeah, let me give you a free consultation.” Literally. We all see this all online. Even just saying “free consultation,” it reminds me of … Oh, what is it called? The time shares. I call them the crime shares. That is what I view a free consultation is, like crime share. Literally, you have to sit down. You know you’re going to get pitched, and you’re not going to be able to get out of there, and you’re going to be stalked. Versus if you can actually build trust, build value, and then offer them something that they need that they pay for, you’re going to dominate.


Andy Baldacci: Once you do have this together and you have refined it a bit, it’s then time to obviously get leads, get prospects into the system that you have built. How do you develop a system to help clients do that?


Jason Swenk: Yeah. You’ve got to look at it in a couple of different channels. I’ll cover two. There’s a lot more, but you’ve got to look at it, one, as an outbound channel. And I love my Facebook advertising agencies, and lead generation agencies. I love you guys to death, but you guys totally rely on all the business coming to you, which is good, but if Facebook makes a major change or something changes like Google algorithms penguin goes to zebra or whatever it is … I don’t know what animal they are now, but let’s say they do a major change. You’re screwed. You need multiple channels.


An outbound channel is very important because then, if you have that laser focused and you know who is your perfect client … Answer this. If you don’t get any value from this, I’ll be surprised, because Andy is so smart. If you ask yourself this one question … If I had to be paid on performance alone, what service and what client and criteria would I go after? That’s who you need to be going after. Then come up with an outbound strategy, whether it be direct mail, meet ups, events, networking, cold calls. Picking up the phone. There is actually a thing called the phone that you can actually talk to people, not just text or email.


Andy Baldacci: A lot of us have forgotten about that.


Jason Swenk: Did you hear of this brilliant device?


Andy Baldacci: I’ve heard of it.


When you’re asking yourself that question, it seems like to me the goal of that is you’re trying to figure out who can I provide the most value to.


Jason Swenk: Exactly. Be specific. It all goes back to the first system, clarity.


Then calling them up and offering them value. I did a podcast interview with [Dale Ross 00:18:57] of IHG, International Hotel Group. It was Episode 4. If you go to our website, JasonSwenk.com/four, you can listen to it. But he talks about exactly how can you cold call into the bigger brands and get their attention, even if they have 20 different agencies they’re working with. Literally, they had $50,000-$60,000 of play money … ‘Play money,’ they called it … In order to test out agencies. Once you get in there, then you can mole your way through the rest of the organization. There’s a whole strategy to that. But you need to have some outbound.


The other part goes back to the inbound. Too many agencies say, “Jason, Andy, I don’t have time. I’m doing all this work for my client. I don’t have time to blog.” Or they pay an outsource company to blog for them, which is the worst thing you can do because blogging sucks by itself. I’m going to tell you. Literally, you’re marketing like it’s 1999 and Prince is dead. Stop doing that. You need some rich media. Do a podcast. Do video. Put some personality behind it. Put some effort behind it, and get that tone and what you guys believe. It goes back to clarity. I’m going to keep harping on that, but that’s the foundation. You’ve got to tell people what you believe, and then people will be like, “Dude, we’re connected.”


Andy Baldacci: But if people aren’t going to have time for blogging right now, how do you suggest that they approach this when it comes to video or audio or other forms of content that are even more involved than just writing a blog?


Jason Swenk: If you’re too busy, that’s a telltale sign you’re not charging enough. You need to raise your prices. The other part is you need to make time. Unless you want to be in the same cycle, or you want to be the next Blockbuster. I am perfectly fine with that. It’s the law of attrition. There’s people that are not as educated as us, or not willing to take the effort in order to do new things. Your time will come where it will go down, and I want to put the fear of God into you that you will go down one day if you do not do something different and you keep doing something.


I’m serious. I’ve helped over 20,000 agency owners in the past three years. There is a common theme that I see with the successful ones and the ones that are not. The ones that are not, they keep saying, “I’m just too busy. I’ll get to it one day,” and they’re relying on hope. Hope doesn’t float.


Andy Baldacci: Especially with prospecting, with filling the top of your sales pipeline, that is really the lifeblood of the agency. So many agency owners, so many business people in general, they’ll make some effort on outbound, on inbound, whatever, when they need the work. Then when the work comes in, they stop and then they wonder why in a few months they don’t have any clients. It’s because it really does need to be a consistent effort as well, and it needs to be taken seriously because without it, it’s going to be very hard, if not impossible, to truly build a thriving, growing agency.


Jason Swenk: The best agency that is a great example of this is Vayner Media and their head honcho Gary Vaynerchuk. There is a reason why he puts out so much content. Look, putting out content, doing a podcast, is one of the easiest things to do. You get a mic. I have done some podcasts on my iPhone earbuds. Literally, going into Skype with a call recorder interviewing people.


Having a podcast can be a lead generation source. Imagine this. You could call a CMO of Aflac and say, “I want to interview you,” and now you have a conversation with them, and you probably can slide your way into there. I have many clients that do that.


You’ve got to think about how do I stand out, and you can write blog posts based on the rich media content, but you better have some rich media behind it.


Andy Baldacci: That is funny that you mentioned that because I talked to James Carbary who runs Sweet Fish Media, and they help B2B companies build podcasts, and primarily leverage them as ways to get your foot in the door with high value prospects, because it’s a much easier conversation to start when you say, “Hey, can I interview you, Mr. Busy Executive?” Rather than, “Hey, do you want to jump on a call so I can talk about how I want to sell you stuff?”


Jason Swenk: Yeah, so I can give you a time share.


Andy Baldacci: Exactly. That brings into the next step. Once you do have some regular prospects coming in, you need to actually close the deal. What is your approach to sales?


Jason Swenk: Yeah. You’ve got to make sure you’re talking to the right people. I’m going to tell you something you guys are going to disagree with, and then you’ll go, “Oh, yeah, he’s kind of smart on this.” There is no such thing as a bad agency client. There’s not. There’s only a bad prospect and a bad process.


Andy Baldacci: Interesting.


Jason Swenk: Now you’re like, “Okay, you know what you’re talking about now.”


A lot of times you’re letting in the bad prospect. That’s why I like doing what I call the foot in the door, the paid discovery, that kind of stuff. Also it comes down to qualifying them and making sure that they’re the decision maker, making sure they have a budget. You have to ask. Imagine this. Imagine if you asked them if they had a budget and they actually told you. Wouldn’t that be nice, rather than spending all this time doing a proposal only to find out that they don’t have a budget? You can ask them the budget.


Making sure that the needs match up. Making sure the timing … I always use a checklist with our sales people. It’s called NBAT: Need, budget, authority, and timing. You have to go through that and qualify them. Then, once you qualify them, then you go into what I call the Three I’s: What’s your biggest issue? What’s the impact on your business? And how important is it to you? We’re asking questions. We’re having them coming up with a value of what is this problem costing them, so then when I say, “It’s a million dollars for this engagement,” they don’t be like, “That’s a lot.” They’d be like, “But I just showed you how to make $10 million.” Or whatever ratios that you guys are going after. We went after big deals, but to let you guys know, I started off at $500 websites so I’ve seen it all on that part.


You just got to make sure the right prospect for you. You’re in the driver’s seat. If you don’t get anything else away from this, you’re in the driver’s seat. You can take on the people that you want.


Andy Baldacci: So many people forget that.


Jason Swenk: Big time. They’re just like, “Oh, I need to make payroll.” If you take on the wrong prospect, it’s going to cost you more.


Also, too, think about opportunity costs. Not many people talk about this, which really concerns me because everybody just talks about the top line revenue, but who gives a … I was about to cuss. Who gives a poop on that, right? I don’t want you guys to have to edit it.


Andy Baldacci: Nice catch. Nice catch.


Jason Swenk: I caught that. It was a pretty good one. I don’t edit my show. I just let the word just fly. Bomb it.  What was I saying?


Andy Baldacci: You were talking about the opportunity costs.


Jason Swenk: Opportunity costs. Yes. Let’s say you take on a deal for $10,000, but you normally do the same amount of work at $40,000. The opportunity cost is $30,000. Yes, you’re going to make the $10,000, but who cares? You’re costing yourself $30,000 for the other clients that you could’ve worked with. Now you’re maxed out, and your profit margins are going to stink.


Really, guys. If you didn’t have to concentrate on any other number, know what the profit is after you get paid.


Andy Baldacci: Right. It’s something where, one, I don’t think a lot of agency owners can answer the question of what was your actual profit on that last project you had. One, because they’re just not tracking things closely enough, and that is where … Small pitch … I think Hubstaff can help. But beyond that, though, is having that insight into the fact that different clients have different values. Not every client is going to be worth the same amount to you, so if you have a loose qualification process, you’re going to really hurt your margins rather than focusing on the best clients and letting them come in. That’s how you get to those 40%, 45% margins that most agency owners can only dream of.


Jason Swenk: Yeah. Look, if you think 20% margins are good, they’re not. The service bureau in the US … I know there’s lots of people listening to this all over the world, but in the US, the service industry, the standard is right around 32%.


Andy Baldacci: Interesting.


Jason Swenk: Meaning if you think you’re doing a good job because other agencies said 20% is really good, or 15%, you’re not. Yes, it’s good you’re in the black. Don’t get me wrong, but it could be a lot better. I want you guys to think bigger rather than thinking smaller. Don’t just think about for the next month and be like, “Oh, I’m at 20%. Cool.” Think bigger.


I’ve interviewed so many other eight figure agency owners. The biggest thing that is separating the eight figure, nine figure agencies from the smaller ones, maybe where you guys are at … Or maybe you guys are that big, but maybe you want to get to a trillion. I don’t know. But the biggest thing holding you back is your mind and second-guessing yourself and thinking small.


Andy Baldacci: That’s so great. There is a certain point, especially for smaller agency owners, where payroll really is a major concern. It’s not like you just have to immediately, day one, turn away all the prospects who aren’t absolutely perfect, but make progress towards that ideal. Keep the long term in mind so that you actually do get to a point in time where you’re able to turn away some of those prospects rather than just staying in the same cycle you’re in right now.


Jason Swenk: You got it. Yep.


Andy Baldacci: A lot of the high margins comes from this qualification process, and it’s making sure you’re working with the right clients. Beyond that, after the sale, after you’re actually working with these clients and delivering the services, that’s where you’re going to make sure you keep a lot of those margins by actually being efficient and having processes to deliver efficiently. How do you think about the delivery of the services?


Jason Swenk: That’s so important because a lot of people are really good at marketing, they’re really good at sales, but they stink at delivery. It’s a lot easier to grow your agency based on people that already trust you and that have already given you money. If someone is giving you money, they’re 20 times more likely to give you more of it. We like this concept. I really like this concept.


If you’re anything like me, I remember in my agency, I had to bring in account managers because I stink at this. I’m the hunter. I’m like, let me go kill that big rhino. I’m not going to kill a rhino. I love animals. I can’t even kill a bee, but let me go kill this big client. Not literally.


Andy Baldacci: Right. You’d rather kill the client than the rhino?


Jason Swenk: I’d rather kill the client. I have no problem killing the client. The bad prospect that came in.


I’m going to go slay them, and then I want to go onto the next because I like the hunt. I like the game. I’m not the farmer. I don’t like the wait around. You’ve got to bring in people that are good at that, or think about, how can I automate a lot of this?


I can’t remember the guy. I heard this keynote, and it’s so true. The first 100 days are the most important when you get a new client, so how can you wow them? He did a lot of research on banks. Think about the banking industry. If you switch a bank, it’s a pain in the butt. All the auto-billing and all that kind of stuff that links up to it. Most people, when they switch their banks, they leave the bank within 100 days. How bad was that service that you had to do that?


When they engage with you, the first thing they’re going to be thinking when they sign the contract with you: Did I make the right decision?


How can you wow them? When people buy my agency playbook, or jump in agency university, or work with me, I send them a custom video. “Hey, Andy. Just wanted to let you know you made the right decision. Here’s how it’s going to work.” And it’s a personal video of me. I literally have their name on my iPad. I’m holding it up so they know it’s the thumbnail of like … How did he automate this? At the end, I’ll be like, “This was all automated. I’m the most genius person in the world,” and then I just start laughing. I’m like, “There’s no way to automate this.”


You’ve got to wow them. Think about how can I just go over and beyond what they’re expecting? I’m not saying over-servicing them, because that’s going to cut into profit. But do things that are like the video idea. Don’t send them stupid flowers or knife kits or anything like that, but it has to be personalized. Just make sure the communication is there.


Communication is probably the most important part of everything in an engagement. You have to make sure the client understands exactly what’s coming. If they don’t understand that, you don’t have a well-defined delivery process or delivery system. You’re going to be eaten alive in scope creep, which no one likes, which cuts into profit. And then the client leaving.


The delivery process is crucial, and then it really comes down to operations, guys, and making sure that you have systems to check the KPIs, that you’re increasing your cash flow, that you have the right people in the right seat. Going back to Good To Great. That’s one of the only books I’ve ever read. Well, I read half of it and then I got bored, but it’s a really good concept about having the right people in the right seat on the right bus, and coming up with what’s that right structure, and understanding what you do really well and what you suck at.


Andy Baldacci: Right. Like you were talking about before how you’re the classic hunter, and that’s okay as long as you have people in place in the right roles to help compliment that.


Jason Swenk: Yeah. If you’re the smartest person in the room, you’re in the wrong damn room. You want to be the dumbest person in the room when you’re running an agency. A successful one. You want people so much better than you. The sign of a good leader is giving them the creativity and the freedom to make decisions on their own, and that really comes down to having the right org chart, the right people, and knowing what you’re good at and what you don’t.


Andy Baldacci: Right, and if you don’t have that, then it’s going to be the typical agency where you feel like you have to micromanage everything and that you’re the one person holding it all together.


Jason Swenk: You got it. That’s right.


Then the last system really is around leadership. What I talk about here is you need to transform yourself from an agency owner to an agency CEO. All you owners out there, you know exactly what I’m talking about. You’re cleaning the toilets and putting out the fires, calling clients, all this stuff. You really need to have four or five roles tops, and I’ll describe these in a second.


The first on is setting the vision and direction of the agency and communicating it often. If you’re not communicating it often, remember what I told you in the very beginning. Your employees are going to make decisions based on what’s better for them rather than the agency. If you communicate where you’re going and people can get behind that and believe it … This about Zappos. Their whole core value is around wowing you and staying on the phone and getting you pizza. Doing all these amazing things for you, and they’re a shoe company. They get around Tony’s message and all that kind of stuff that the management team created. You’ve got to do that.


The other part is is coach and mentor your leadership team only. If everybody in your organization is reporting to you, oh, man, you’re going to be stressed out. Your whole job is to make your employees and your team better than when they actually came in, both personally and business and financially and all that. If you understand that, your employees will do anything for you.


Andy Baldacci: To back up a little bit, typically how large do you think an agency should be? Obviously, this is going to vary, but what rules of thumb or how would you think about it as an agency owner? If you’re growing an agency, how big does it need to be before you actually need to get that leadership team in place? Because I know a lot of agencies do mimic what the larger agencies do, and they came prematurely scaled. When does it start to make sense to hire other leadership outside of you, the agency owner?


Jason Swenk: Right when you get around about five people, and then it depends on what you’re good at, what you’re not good at. If you’re really bad at operations and you’re good at sales, you want to hire a VP of Operations. If you’re really good on operations, you need to hire a VP of Sales. There’s a thousand different scenarios that we could go into there, but you should never have more than five direct reports. Five is pushing it.


Andy Baldacci: Interesting. What size was your agency when you sold, in terms of number of staff?


Jason Swenk: A little over 100.


Andy Baldacci: Okay. Even with that structure, did you only have five direct reports?


Jason Swenk: Uh huh. That’s right.


Andy Baldacci: Who were they? What were their roles?


Jason Swenk: VP of Marketing and Sales; VP of Operations; VP of Client Engagement; and CFO.


Andy Baldacci: Okay. That’s the thing. I like how you phrase this last system as the transition from agency owner to agency CEO because this is truly what’s necessary to grow long term, to truly build something that can be acquired, but even if it’s not, it still is an agency that is able to attract the talent you need to build something worthwhile, to build something really profitable and that can grow. Without that mindset, you’re really not going to be able to do that, because you can’t get there by micromanaging, and you wouldn’t want to get there by micromanaging.


Jason Swenk: Yeah. You can’t do it all yourself. I don’t care who you are. There is other people who can give you that outside perspective, or that second opinion. Those are two critical roles that you need to do. The other one is understand the financials. You don’t have to be a whiz-bang at spreadsheets or whatever. I’m not, but I’m smart enough to know what questions I need to ask the CPA or my bookkeeper or the CFO. You want to be able to ask those, so you need to understand the financials.


You need to assist in sales and building the key relationships. The key word is “assist,” not do all of it.


And then the last part is, and this is one of the most important parts outside of setting the vision and direction, is be the face of the brand. [inaudible 00:39:10] be out there building the brand.


Andy Baldacci: The face of the brand. This is something that I do hear a lot from is that a lot of times the agency owner, even when it’s grown to 20+ people, 30 people, the agency owner feels like they have to do more than assist with the sale. They feel like they are almost responsible for it when they are the face of the brand. How do you counter that?


Jason Swenk: You’ve got to position your employees better than you are. The best example is one example we already went over: Gary Vaynerchuk. Do you think Gary is working on all of their clients’ projects? Hell no. But he has set the foundation, he has set the structure. He set the process for other people to follow. Just like me, he’ll say, look, you don’t want me managing your project. I’m ADD, dude. I’m gone. I’ve killed the gorilla. I’m off to the next. I’m not going to remember you. But, Sally over here, she is the best account manager in the world. She understands this strategy.


Also, too, you’ve got to introduce. If you’re assisting in the sales, you’ve got to introduce your team early. You’re still the one that needs to be putting out the videos, doing the podcast interviews, doing the speaking gigs. Going out there. Putting yourself out there. That puts a face on a logo. If you’re just a logo, you’re doomed. Eventually.


Andy Baldacci: Everything you’ve been talking about, it all makes perfect sense to me. The past year or so, I’ve really dove into systems and the power of process and all of that. There is one book that I would recommend. It’s called Work the System. It can get a little bit tedious, but the point of it is the value of having systems in place because if the average agency owner is like what I think they’re like, where they’re complaining about constantly putting out fires, constantly feeling like they’re the only one holding it all together. They can’t step away. Any of that. Systems are going to help save you.


One thing that I’ve been trying to get a better handle on myself is how you actually manage these systems, how you actually keep track of them. How do you actually set up these systems in an agency so that they’re really followed?


Jason Swenk: You start with one and knock that one out and go onto the next, but you’ve got to start in order, too. The order that I just walked you guys through, from clarity, positioning, offering, prospecting, sales, delivery operations, and leadership, those are all in order for a reason. They all go back to the foundational systems, which is clarity, positioning and offering.


Look, I’ve gone through eight of them. Don’t get overwhelmed. When you get overwhelmed, you’ve got to make a list and figure out what is the biggest thing I need to do first. Do the first thing first. Do I have a vision, and a belief, and core values that I can communicate to our team? Do we have that perfect, ideal prospect that we’re going after, that when someone sees our website, they’re like, dude, you’ve been bugging my office. If you went to my website and you’re an agency owner, you’re going to be like, dude, your podcasts and your blogs are every topic I have struggles with. When you do that, then you’re going to start dominating the marketplace.


But the other thing, too … And everybody will tell you this. You have to be patient but consistent. That’s what I was telling you with your podcast. You guys have been in a year, so right about now is probably when you’re going to get a huge push going forward. It’s going to be like this momentum is pushing you, and you guys are like, “What’s happened to our business?” Well, it’s growing because you guys have been consistent and relevant and all that kind of stuff.


Andy Baldacci: Yeah. It’s the act of stacking the bricks and slowly building something that will pick up the momentum and get you to where you are, when there is that tipping point moment. For a lot of these systems, I don’t think they necessarily need to be super detailed and written in a 17 step SOP. But for some of them, having a little bit more detail is probably helpful. This is a personal question. In your mind, do you tend towards that hyper detailed SOP with a binder of all these processes, or where do you fall on that spectrum?


Jason Swenk: I’m not a big component of the huge Standard Operating Procedures binder. This is a living and breathing organism that is always going to be changing and always needs to change and adapt. Once you finish it, great. You’re going to have to redo it because you’re going to be at a different level. My biggest thing is just do one little thing at a time. Just get that and then go on to the next. Then you can always circle back when you go through.


Agency owners that have been doing this ten years, you could probably go through the systems a thousand different times and it would always be different, but you need to just keep always knowing that everything is changing, especially in our market. Technology, marketing changes faster than anything else out there. This is one of the fastest growing markets, too, because there is really no barrier to entry. Anybody that knows how to do something cool in marketing or design or development can get into it. You have so much competition. The cool thing is if you set up the right systems, you start executing on it, you’re going to reap the benefits. But the thing is you’ve got to take action. That’s what holds back everybody. They just work on their clients. They don’t work on themselves.


Andy Baldacci: I think that is an amazing point that really can’t be emphasized too much. Everything you’ve talked about, it really is a process. It’s not like you build these systems, you put this down on paper and then it’s done with. This is always an iterative process where you’re constantly improving and refining. I’m glad you stressed that because I know a lot of people just resist process in general, but you can’t do that and run a successful agency at scale. But you also don’t have to jump in with both feet right away. It’s taking that first small step.


On that point, if listeners see the value in systems and appreciate what you’ve been talking about, but they’re curious, all right, what is something I can do right now to get started, what is one of those first steps that they could take?


Jason Swenk: Just taking action. If you guys want to list the systems, I’m sure Andy will put it into the show notes. Just go through the list and rank yourself. I literally think … Write down all eight systems and rank yourself on a scale of one to ten, ten being the best, and see where you’re the weakest at. If you’re the weakest at prospecting, well then go back a couple systems and go, “Am I weak at prospecting because I don’t have a niche. I have a crappy offering.” Then you can start figuring out why rather than just executing for no apparent reason.


Andy Baldacci: I think that is really good advice. Before we wrap up, though, I like to ask all my guests a few rapid fire questions. I’m going to go through them quickly. Your responses don’t need to be too short though.


The first one is just right now, what do you spend too much time doing?


Jason Swenk: That’s a good question. Probably responding to agency owners on email. I respond to every comment. If you get on my contact page, it opens up Facebook Messenger and I respond to everybody. I spend a lot of time doing that, but I don’t regret doing that. I love doing it.


Andy Baldacci: What do you think you should be spending more time doing?


Jason Swenk: Creating more content, but that’s what I’m doing. Bad answer.


Andy Baldacci: There’s got to be something where you were like, man, I wish there were more hours in the day so I could really double down on this. Maybe not.


Jason Swenk: There really isn’t. I literally set up a lot of different systems in my business that I could literally be hit by a bus tomorrow and people would not know for the next six months because we have the content, emails, everything planned out, other than me getting on new interviews.


Andy Baldacci: I think that just speaks a lot to the power of the approach that you’ve laid out there. When you have followed through with this process, you’re just so much more efficient and effective with your time that you are actually able to focus on the parts of the business that need the focus. I think that answer speaks a lot to what you’ve been talking about.


With that, what are you actually hoping to accomplish with your business in the next quarter?


Jason Swenk: Next quarter, just keep reaching more people. Building the awareness. That’s the biggest thing. If I can get in front of agency owners and help them out, then they’ll have a resource that I wish I had. It all starts with the top of the funnel and making them aware. Agency owners don’t know there’s people that can actually help them.


Andy Baldacci: Which seems crazy, but it’s true.


What do you see as the biggest obstacle that you’ll need to overcome to get there, to achieve that goal?


Jason Swenk: Just making sure I’m not missing a platform that is going to be the platform that you can really leverage. Podcast has been huge for me. Facebook has been huge for me with creating groups. Just making sure I stay up to date with all the different technology and just staying relevant. That is always my biggest fear is staying relevant. That’s why I’m always adapting and implementing faster than anybody else out there, because I need to be ahead of everybody in order to give recommendations. I don’t want to give people theories. I’m like, “I think this works. Go try it.” I want to be the guinea pig. I want to be the bloody person through the wall first, and then be like, all right, I can shelter you and you can get a couple scratches.


Andy Baldacci: Do you think there’s ever any chance that you’ll launch another agency, or are you having too much fun doing what you’re doing right now?


Jason Swenk: I’ll never say never, but this is the coolest thing I’ve ever done ever. It provides everything I’ve ever needed and wanted. At the end of the day, when I sold my agency, I had success, but success is freaking lonely. My significance was taken away because I didn’t have the people reporting to me. I didn’t have that team of something that we were creating. I was always looking for that significance. Then when I found this and I started helping agency owners and seeing them get the value and go through things quicker than I did and winning those big clients or being able to have more time with their family or whatever they wanted, I felt significant again. That’s what I love doing.


Andy Baldacci: I think that is a great answer. It really speaks to just who you are as a person and how you do approach business. I thank you for that.


At the beginning of the show, I said you would set the bar relatively high, but I think we cleared it. Nice work on that. You can pat yourself on the back. You [crosstalk 00:50:44].


Jason Swenk: Sorry to disappoint.


Andy Baldacci: Before I do say goodbye, I want to ask you, if listeners have been appreciating what you’ve been talking about, if they see the value in these systems, if they want to learn more, where is the best place for them to go to do that?


Jason Swenk: Yeah. There’s two places I’ll send to you guys depending on what you guys want. If you want to dive deeper into the systems and get access to all the agency documents and strategies and everything that we were talking about, but be able to have my walk you through it, go to theagencyplaybook.com.


The other part that I’ll send to you is I do a weekly show as well on iTunes and YouTube and all over the place. Every different channel you can put out there. I have you guys on there as well. Just go to my website, JasonSwenk.com. Swenk is spelled S-W-E-N-K. I’m not related to Hillary. It’s spelled with an ‘e’.


Check it out. I put out about 75% of my knowledge for absolutely nothing, which is a good price, right?


Andy Baldacci: Yes, very affordable.


Jason Swenk: It’s a good price. Definitely check out all the content there, and that will help and guide you along. And I’d love to hear from you guys and think about what you guys thought on the show. Like I said, if you click on the contact page, it’s not a contact page. It goes right to Facebook Messenger and we chat.


Andy Baldacci: I saw that on your site, and that is the first time I’ve really seen that. I was like, all right. I had this internet marketing mindset. I’m like, how is he gaming this? It just goes straight to you. There is no trickery.


Jason Swenk: Yeah. It starts off with two Jason-bot questions, just to segment you and to give me, “All right, who am I talking to?” And then it is me. You can even make me prove it. I’ll send you a voice memo. I’ll be like, dude, Andy, did I confuse you? Are you an agency owner, or are you starting one? Then it always freaks people out and they’re like, oh, crap. How did you bot that one? [crosstalk 00:52:53]


Andy Baldacci: That’s cool. I’ll get all of that linked up in the show notes. If you are curious about this, if you do want to get more, please check those resources out. Jason, thank you so much for everything you shared with us today. It was a lot of fun chatting.


Jason Swenk: Thanks, man. Thanks for having me. And, guys, go take action. Please!


Want to learn more?

You can find more about Jason’s systems and strategies on his website, theagencyplaybook.com. You can also check out his weekly show, which he posts on iTunes, YouTube, or anywhere else you like to get podcasts.

For the podcast, check out his personal website, jasonswenk.com. Finally, if you’d like to get in touch with Jason personally, check out his contact page, which takes you straight to his Facebook Messenger so you can chat.

Resources mentioned:

#1 Thing Agencies Need To Do To Land the Big Clients


James Carbary Shares His $4,700,000 Sales System

Work the System by Sam Carpenter

Good to Great by Jim Collins

Thanks for listening!