I was introduced to Jake Finkelstein (Twitter) of Method Savvy by another guest of the podcast, Karl Sakas, who told me that he considers Jake one of the top 1% of decision makers out there. After this podcast, I understand why.

But what sets Jake apart isn’t that he always makes the right decision, it’s that he is able to quickly learn when he is wrong, no matter it’s in the problems he focuses on or the solutions he applies to try to solve them.

Avoiding Shiny Object Syndrome - @tundro reveals his secrets on the Agency Advantage Podcast Click To Tweet

Today, not only does Jake share how he does that and why it’s so important, but he also shares the decision-making process that led him to turn away a $600,000 client.

If you ever second-guess yourself or feel like you aren’t making the progress you should be, this is the episode for you.

Download a full transcript of the interview with Jake: Get it right here.

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Key Takeaways

Avoid the shiny objects (i.e. solve the right problem) [7:00 – 11:30]

The goal of marketing is not to have the best Super Bowl commercial or the most followers, it’s to make investments that drive measurable business outcomes. The challenge there, Jake says, is that you have to understand what outcomes you are trying to drive and that’s where many business owners go wrong.

As an agency owner, when a client comes to you with a new project, it’s your job to dig deeper to uncover what it is the really want to solve and then identify the best way of getting there. Often when a client comes to you with a laundry list of tasks they want done, there are 1 or 2 which will have a disproportionate impact on their business.

The challenge is that those 1 or 2 things are rarely exciting. People want the flashy ads and the high follower number much more than they want to spend a few months cleaning up their database. However, once you tackle those boring (but highly profitable) jobs, then you can start thinking about the sexy projects.

Know when you’re wrong faster [12:00 – 13:30] [30:30 – 38:30]

Jake doesn’t believe that any set of marketers can be significantly more right more often than others, but you can know when you are wrong faster. In order to achieve that, you need enough data to inform your hypothesis about what is true or false.

What makes Jake’s agency different isn’t so much that their team is orders of magnitude better at what they do than their competitors (for some, they are). It’s that once you get over a certain bar, most of them are pretty good so it all comes down to how they learn what works and what doesn’t.

A lot of that is driven by things like split testing, multi-variant testing, and continual consumer research, so they can understand if they are getting the kinds of behaviors they really want out of these audiences. If they aren’t, then they can identify why in order to adapt and continue to run new tests.

Getting buy-in from your clients [16:30 – 20:30]

Agency owners typically run into 2 sets of customers: those that buy into the methodology and the approach and will have the patience to succeed incrementally; and those that will get impatient and you probably never should have worked with anyway.

Jake worked with a successful B2B company for a number of years and one of the items that they managed for them was their paid search campaigns. They got acquired by a large international company and their new CEO had had a lot of success with paid search and wanted to significantly increase their spend. Jake and his team didn’t believe it would achieve the same results at scale and advised against it, leading to the client going to another agency and to Jake losing out on a $600,000 deal.

When you are working with brands, it is a fundamental imperative that you tell the truth and that you are willing to lose business, in order to tell the truth, not just for moral reasons but also to protect your reputation. If a client doesn’t buy into your methodology or is ignoring your counsel, then you should move on, because it never ends well.

Entrepreneurs’ Organization [47:30 – 54:00]

Entrepreneurs’ Organization (EO) is an international organization of entrepreneurs that have at least $1,000,000 in revenue per year or $2,000,000 or more in investment. That puts us any number in the 2% of businesses in the world that actually can get to that scale.

Unlike other groups, EO is built around non-judgmental experience sharing. The core aspect of EO is a once-per-month meeting with a smaller group of business owners, where you talk about the best and worst things that happened in the last month on the personal, family, and business level.

To Jake, who serves on the EO Board of Directors for the Raleigh-Durham area, it’s been very helpful to realize that no matter the size of a company, most of his peers are dealing with similar shades of the same problem. Running an agency, or any business for that matter, is hard enough. There is no need to make it harder by isolating yourself.

Whether it is a formal group like the EO or a mastermind you put together with your friends, the feedback loop that comes from non-judgmental sharing with a group of peers is one of the best tools to drive your business forward.


Andy Baldacci: Jake, thanks for coming down to the show today.
Jake Finkelstein: Thank you very much. Thanks for having me.
Andy Baldacci: When Karl Sakas introduced us, he told me that you are in the top 1% when it comes to making smart decisions. Today, I don’t want to pressure you out but I’m expecting some really revolutionary groundbreaking stuff from you.
Jake Finkelstein: Well, I will certainly do my best but I think Karl may be exaggerating a bit.
Andy Baldacci: Well kidding aside though, I know you do have a unique interesting background, so for the listeners who aren’t familiar with you, can you share on what that background is and how you got where you are today?

Jake Finkelstein:


Sure. It has been a bit of winding road. I actually cut my teeth in the music business back in the 90s when people went to record stores and actually bought music on little disks. Like most music industry folks, I started as a touring musician, decided I didn’t want to spend my life in a tour van. Ended up working for an independent metal record label called Megaforce Records, which ultimately led me to work for Sony music entertainment, prior to the BMG merger. Had a great experience working with folks like System Of A Down, Pearl Jam, Springsteen, a bunch of really fun folks and then got a little bit tired of the politics of corporate life.
[00:01:30] Decided to jump ship with the former guitar player from Modern English, Stop the World and Melt with You, Tommy Burnett and joined his company, which was a nationally syndicated college non-commercial radio program called, Universal Buzz Radio. It’s all pre-recorded live concert performances. Went over there to build it into a national brand and re-monetize, self advertising. Unfortunately, September 11th occurred and the advertising market became very difficult. I remember very vividly 1 day, having a conversation with Tommy and we had a couple of Angel investors and we were talking about what to do as we didn’t think the business model was going to be sustainable.
[00:02:00] He said, “Well, I know a lot about music marketing and you know a lot of musicians, let’s start a music marketing company.” That’s what we did and quite frankly we got lucky. One of the first artist that we had to work with was a little band that just got signed to B2 called the White Stripes. We had recorded them for the radio program and when they got signed to B2 and put out White Blood Cells, we were brought in to help market the album and when that went platinum we were kind of off to the races.
[00:02:30] That gave us the opportunity to work not just with pretty much every record label under the sun but also with television, film, video game companies and that ultimately brought us into working with large international brands. By the early mid 2000s, we were really positioned as a creative and experiential marketing company, so we are focusing on lifestyle programs. Publicity stunts, concerts tours, integrated digital lifestyle programs, a whole lot of fun. We are mostly working with brands like Levis, Coca Cola, Starbucks, to produce really interactive experiences.
[00:03:00] It was kind of the doldrums of the economy in 2007, 2008 and wanted to make a little bit of a lifestyle change and decided to leave there and start Method Savvy.
Andy Baldacci:


What does, because I’m curious. I can ask you 1000 questions about the musicians, about the industry, about all of that but I’ll try to stay somewhat focused today. Let me ask though, when you are transitioning into, not necessarily more of a generic … You are changing markets but you are not just working musicians, you are not just doing purely experiential advertising, how did you make that transition to what Method Savvy does today? When I look at your website, it says, “We turn targets to leads, to customers, again and again.” How did you eventually get to that pretty tight, I like the succinct positioning statement you have there. How did you get to that?
Jake Finkelstein:



I learned everything the hard way and I would not recommend it but it’s worked out pretty well for me over the years. What actually happened is, when we were focusing on music the initial bridge that we were crossing was about tying music into brand experiences. That’s been very successful, not just for my former agency but for many different brands, especially when you’re reaching teen, 20s, 30 somethings. What happened when the economy started to get poor like you said 2007, 2008, as I started fearing from all of our Fortune 500 clients, coming to the same refrain.
[00:05:00] Budgets were being cut in half, teams were being slashed and there was a desire to have more accountability for marketing investments. Quite frankly, as much fun as it is to have some big international brand give you a couple of million dollars to put together a coast to coast concert tour, all I was really giving back to them, were pretty pictures and some good press. I really couldn’t tell them what it meant for their business and when I decided to make the change from my former agency to Method Savvy, I really set out to solve that problem. How do you build accountability, transparency and as much predictive scaling as possible into the marketing and advertising process?
[00:05:30] What I did, is I just read a lot. I talked to a significant number of people and just asked tons and tons of questions. I’m a big fan of Steve Blank in this customer development process and that is more or less what we did. We went out and we just talked to as many people as we could and as we listened, we started to hear patterns we started to build out methodologies and approaches that we believed solved those problems.
Andy Baldacci: Who were you with when you went out, was it just you in the beginning or did you have a small team around you when you first established Method Savvy?
Jake Finkelstein:


It’s a great question. I actually started Method Savvy on my own as a consultant and I spent about the first year and a half, 2 years, acting as a consulting firm. Of course, we had contractors and freelancers that we would bring in as needed. I was lucky enough when I left my former agency to leave with a couple of clients, so to kind of hit the ground running. What I discovered pretty quickly, is that the companies we were working with, loved the methodology loved the approach but they were really poor at executing on it.
[00:06:30] It’s not that they are dumb, it’s just that it’s a bit of a paradigm shift and they didn’t have the right training amongst their teams, with the right type of talent the infrastructure, to do what really needed to be done. During that process, I decided to make a shift from just being a well paid consultant ,to actually impacting our client’s businesses, which is what got me to start building our agency services. As soon as I started building up the agency services, I started bringing in team members. One of my first employees, actually the first employee is a gentleman by the name of Devin Kelly. Devin and I actually did a lot of that customer, did all of the work together.
Andy Baldacci: Interesting and how big is your team today?
Jake Finkelstein: Roughly about 20 but we are in a growth mode, so we’ll be closer to 25, 30, as we moving to [Q1 00:06:55].

Andy Baldacci:

Nice. We’ll get back to the nitty gritty of your agency a bit later but for now, I want to dive into what we were talking about over email before the show. You mentioned something that really stood out to me and you said that agency owners and business owners in general, spend an enormous amount of time and resources solving the wrong problems. Can you share with listeners what you mean by that?
Jake Finkelstein:
Sure. That’s actually one of the founding principles of Method Savvy. It’s not that I believe that business founders or marketers in particular are dumb. It’s just the opposite. However, they often times come to the table with either the wrong assumptions or uninformed assumptions. A really great example is, I remember when Twitter launched, I was actually at South by Southwest that year. I used to get calls from clients 6 months afterwards going, “We got to be on Twitter.” “Why?” “I read about it in the Wall Street Journal,” used to drive me crazy. Simply, because somebody else is doing it, is not a good strategic justification for making an investment.
[00:08:30] We’ve seen many of the same kind of shiny object syndromes from clients up and down the size scale. From a couple of million dollars a year in revenue, all the way to billion dollars a year in revenue. The goal is not to have the best super bowl commercial or the most creative awards, it’s to make investments that drive measurable business outcomes. The challenge there is that you have to understand what outcomes you are trying to drive and that’s actually where it gets business centers in particular, off track, is that they are focusing on the wrong thing.
[00:09:00] A really good example of this is, we had a client a couple of years ago, sought through us as a service company. They had a Freemium model, so somebody could register for the product for a free trial and if I remember correctly, about a month, and after that, they had to upgrade. They came to us because they were working with another agency and they said, “Well, they seemed to be doing pretty well but we are not getting the same type of lift that we used to. We think maybe you or another agency could do a better job.” We said, “Okay, that’s fine but before we put together a digital advertising program, can we look at your customer data? Can we look at your marketing analytics data? Can we talk to the stakeholders and sales teams within the organization?” They said, “Sure.”
[00:09:30] What we found out is, they were spending roughly 80% of their marketing budget on customers that were generating roughly 30% of their revenue, freemium model. The solution was not to do a better job of advertising, it was to do less advertising and to focus more on customer retention and conversion from freemium users to paid users. That’s exactly what I’m talking about when I say you are solving the wrong problem, it’s that if you dig a little bit deeper, you can usually find the 1 or 2 items that if you can solve those, we’ll have a much bigger bang for your buck faster.
Andy Baldacci: It’s kind of applying 80/20 principles to what you are doing. It is look for the things that actually matter that produce disproportionate results compared to all the other almost noise that’s out there.

Jake Finkelstein:


Yes. The challenge is that those things are rarely exciting. Another example is, we have a client, billion dollar plus business in the office furniture, kind of carpeting and flooring space. They are very successful, have an excellent sales team, have gotten a lot of scale and their big problem is that their customer data is not clean. It isn’t just very well organized, so they can’t do all the high level segmentation like interesting fancy things they want to do. The bright thing for them is actually to spend a lot of time doing boring customer data work. All those types of problems are hard things to get CEOs or CMOs excited about.
Even as a business owner, it’s hard to get excited about those little things but it’s usually the blocking and tackling that is worth focusing on first because it will generate the highest level of positive outcome, then you’ll have plenty of time and resources to do the fun and sexy things.

Andy Baldacci:

When a client comes here and I’m sure you have, sort of your discovery process, you have your on boarding process, where you really try to figure out what their problems are, what you are working with. When they come to you and they have this data that you really can’t work with right away, how do you handle that?
Jake Finkelstein:
That’s an excellent question and a very common problem. We always like to start with what’s known and that can be customer data sets, stakeholder conversations, customer conversations and in an ideal world, all of those really rich and valuable and so they are not. If they are not then you have to set it aside and look for other types of data sources that are available. There’s many along the quantitative to qualitative scale that can be looked at surveying a 3rd party data. What you are really looking for is, how much can I learn that’s going to inform my thinking.
[00:12:00] From the marking perspective, I don’t actually believe that any set of marketers can be significantly more right more often than others but you can know when you are wrong faster. In order to know when you are wrong faster, you have to have enough data to inform your hypothesis about what is true or for that matter, not true. When you test, you have a models, you can say this either is happening or not happening the way that I expect and then quite frankly, if it doesn’t work and it’s not happening the way that you want it to, then you just stop and move on to something else and stop hunting good money after bad.

Andy Baldacci:

This is something that we had talked about before in the email. I’d made a note that I want to not push back, but I want to ask you about because it almost seems like you are making the kind of the random work argument. The efficient market hypothesis, where it’s like you can’t do much better than an educated guess but you need to test your hypothesis and if you fail quick you need to learn but in doing that, don’t you then get better, so the next decisions you make afterwards are better than the ones you are making before?
Jake Finkelstein:


There is an additive effect both in terms of data and in terms of outcomes, however just because something’s worked 1000 times before doesn’t mean it’s going to work the 1000 first. You always have to approach, especially in marketing decisions, but I would really argue with any decisions in business, with a healthy scent of skepticism. If you’ve run an email marketing program and you have 40% open rates, every time you send an email, you make $10,000. That’s great and that’s a perfectly good hypothesis but that doesn’t mean when you send the next one, you are not going to sell $80,000 worth of product, or $2,000 worth of product.
[00:13:30] Then again, to your point that additive effect, does make your hypothesis stronger but it doesn’t necessarily make you more right.
Andy Baldacci: They still need to be tested. You can’t just assume that because of your vast experience and everything you’ve learned, that you are going to right. That you can just throw away all the tests.
Jake Finkelstein: Yeah, I believe that experience and good data help you understand what not to do, more so than what to do.

Andy Baldacci:

In like an example for a client, if you are working with someone on say a new campaign or anything new, what type of experience, what things will be like, “Alright, I’m not going to do that anymore.” What has the experience taught you not to do? I guess you can’t boil down a simple rule of thumbs but do you have any examples that tie that to practice a little more?
Jake Finkelstein:



Sure. Let me answer that in 2 different ways. First is that experience, that an activity or an approach, does not work for 1 client, does not mean that it will not work for another client and we actually have seen that in real word practice. Billboards are a terrible waste of money for brand A but they actually work pretty well for brand B. The reason is that it has to do with who the customer is, what’s important to the customer and how they feel and experience the brand. Set that aside for a second, the more relevant example is really about testing an optimization around a program so that, let me give you an example here.
[00:15:30] We have a client that we are currently on boarding where they’ve done a decent amount of email marketing work and have found that they have a particular segment that is not highly engaged. The answer there, at this point, given their goals, is not actually to get those un-engaged folks more engaged, it’s to increase revenue through the people that are highly engaged because they are doing a sprint [inaudible 00:15:33] where they want to hit a certain revenue number. It’s just an issue of focus and stopping doing what’s not generating the outcomes that you want, at least temporarily, so you can invest a little bit more in what’s going to get you to the goal post.
Andy Baldacci:
That one thing where it’s like everybody wants to … They hate having projects that fail. When you are working class, they hate having segments of the customer base that just don’t make that much money and so they always want to try to spend all this money to save that segment, instead of just say like, “Hey, you have this 1 group that basically if you spend a $1 on ads, you are going to triple that every single time all day. Just pour as much money there.”
Is it hard for you to actually get them on board with that? To get clients on board with that mindset they are like, “Hey, you are not going to be able to get everybody win but you have this 1 group, let’s focus on them.” Is that hard to get them to agree with that?

Jake Finkelstein:


Yes, extraordinarily. There are 2 sets of customers that I run across; customers that buy into the methodology and the approach and will have the patience to succeed incrementally and those that will get impatient and we probably never should have worked with anyway. I understand why, failure sucks. It’s not something that people want to go through but I firmly believe it is the only way they truly succeed. A good example of this, is we had a B2B brand that was focused on generating … They were in training companies, so they did online and in office training for a number of different product verticals, or industry verticals.
[00:17:30] They were very successful. We worked with them for a number of years and one of the items that we managed for them was their paid search campaigns, amongst a variety of other integrated marketing programs. They got acquired by a large international company and their new CEO had had a lot of success with paid search. He was like, “Hey, this is great. We need to hit some goals, so I want to spend a certain amount of money on paid search. I think they wanted to spend 500 or $600,000 under 2 or 3 months. Incremental budget in order to generate revenue. We said, “That is great. We would love to take your money but it won’t work and here’s why.”
[00:18:00] We gave him a whole bunch of data and modeling that said that we had to reach all of the down funnel traffic that we thought that we could, that was transactional and that we could move into other keyword segments to kind of answer their audiences, but we didn’t believe that it was going to perform at the same rate and therefore not going to hit their goal. Their executives came back and said, “That’s great. Run it anyway,” we said, “Well, let us show you some more data, that shows you why this is not going to work, why this is not a smart idea. We are going to be happy to explore some other areas here, some alternatives.” They came back and I said, “Well, if you won’t do this, then we are going to go find somebody else that will.”
[00:18:30] We said, “Okay, that’s fine. Because we do not believe it’s going to work,” and what happened? It didn’t work. I would have loved to have taken their money but the truth of the matter is that it wasn’t good for them and it certainly won’t be good for our reputation. I think that when you are working with anybody in business but particularly from the agency perspective, when you are working with brands, it is a fundamental imperative that you tell the truth and that you are willing to lose business in order to tell the truth.
Andy Baldacci:
Instead of just being kind of defining a client’s aim with an open checkbook, you are actually making sure that you are not only doing the right thing in like a more explicit way but you are doing the actual right things in terms of the strategies, the tactics and everything that you are applying to this, to get them the solution that they really want at the end of the day.
Jake Finkelstein:


Yes and in order to do that, 1) is sometimes you have to turn down money that you really would have liked. I would have loved that 600 grand. I would have bought a new car. It wasn’t the right thing to do and ran against our core value. The other problem is just that it wasn’t going to work and we had enough data and information and experience, to know it wasn’t going to work. I do think it’s a moral imperative, that when you are in that position, that you speak the truth. That is somewhat different from an agency perspective of helping a client do a dumb thing, as good as they possibly can.
[00:20:00] I think that’s actually okay, as long as you are honest that it’s not ideal and you helped them understand what the outcomes are because often times the clients know their business later than the agency does. There’s a fine line there but I do believe that if something fundamentally will not work, that you do have a responsibility to be clear about that. Just to circle back to your initial question, there are sometimes some challenging conversations to have with clients but if you have mutual respect, then they will listen to you with open ears.
Andy Baldacci:


It seems like what you’ve learnt and what you’ve developed is that one of the more and let me know if I’m reading into this too much, but it seems like one of the important things you’ve developed is the importance of having clients buyin to that methodology from day 1. You almost use that as a bit of a screening process to see if they are even going to be a good client or not.
Jake Finkelstein:


Yes. I don’t know if you are familiar with the challenger sales process but we actually deploy that here and a lot of it is about telling prospects and clients, no, rather than, yes. 2 really interesting things happen; 1 is that we actually get to take a strong stand for what we believe is right. You can’t just make it up, you have to be able to back it up with real data and information. The reason why clients come to agencies is because theoretically at least, we know something more than they do. You have to have humility in that too and recognize that there are things, especially related to their business and the customers that they do know about.
[00:21:30] I think you have to be able to make a case concisely in order to screen out folks that really just want the fast fix. I can’t tell you how many times we have a conversation with a prospect, where we say there are no silver bullets. If you don’t have to spend money on marketing, don’t. There’s very few businesses that can actually do that. Let’s make sure that the money you do spend, is spent intelligently.
Andy Baldacci: You’ve talked throughout this course, you’ve talked about your founding principles, your methodology. What are those principles? What is that methodology that you want to buy in from a client. What do you want them to agree with, what are your stands?

Jake Finkelstein:


We have a number of core values, prominent among them is trust and credibility. We want to make sure that we are as transparent as humanly possible. I believe that if we are honest in our approach ad it’s backed up by data, then we have nothing to fear. There have been conversations where there’s prospects and clients, where we will have healthy debates about an approach or recommendation, and our response is, “Let’s all look at the data together. Do we agree that this is a trusted source? Do we agree that this is saying things that are true? Okay, if so, let’s analyze it together.”
[00:23:00] What that does is really create a broader understanding. I think that you have to have that trust, that credibility, that transparency is kind of core to it. The next piece is that there’s a difference between ideas and hypothesis. Ideas you can come up with, they are creative, they are fun. Hypothesis are good ideas that are backed up by evidence. That evidence does not have to be 1s and 0s, kind of quantitative data. There’s lots of good qualitative, research oriented to be utilized. I say this to my team all the time, is that, you have to have justification, It’s about making a case for a recommendation. If you can’t make the case, then you are just spit balling and that’s not what we do here.
Andy Baldacci:
What I was going to ask is that, you are not advocating just throwing a bunch of crap against the wall to see what sticks, you want to have informed tests. You want them to truly be a hypothesis.
Jake Finkelstein:


Yes and that is extraordinarily critical and very hard to do well because oftentimes marketers are not trained to think that way. It goes very much into the lean methodology and and being able to quickly learn on an [inaudible 00:23:48] basis, which is actually another core principle. This actually gets us into some difficult conversations with clients because many traditional marketers hate incremental improvement. That sounds counter intuitive because it’s not exciting. A 2% month over month improvement in revenue, is not as exciting as a 20% month over month improvement once. The first few months and then another 20%. I did not like big spikes or big valleys because oftentimes that means we don’t know what happens.
[00:24:30][00:25:00] We have 1 client that we’ve worked with for 3 and a half, 4 years now, where we know for every incremental dollar they give to us, we can give them about $4 and 50 cents back to a point of diminishing returns. How much would you want to spend and how much revenue do you want to make? That’s taken a lot of work to get there but if you actually look at the testing models and the revenue models, it is a fairly linear 45 degree up into the right of a line, which is great, but if you tell somebody early on that the best you are going to do for them is you are going to help them see a 3 % lift in the next 6 months, not exciting at all. Really buying into the long game instead of the short game is a very important founding principle for us.
Andy Baldacci:


Interesting. I am wondering how much of these principles, how much of this methodology is in response to the recession that almost created this agency? It seems like before the recession, during the boom, when things were great, when there was money flowing around, a lot of this things didn’t matter. Clients were just willing to throw a bunch of money, like you were saying, they could spend millions on a concert, have had a big event. You give them the pictures or video whatever, without really giving any data on the ROY but now it seems like there’s more of it. How much is this in response to that kind of what you’ve developed out of that?
Jake Finkelstein:



Sure, that’s a good question. A fairly significant amount and it actually comes down to 3 drivers. One is desire for higher levels of accountability and some of that does come from lower budgets or least constrained budgets. A lot of it actually comes from the fact that CEOs are now caring more about what’s happening with marketing. A great study by the [Forney’s 00:26:18] group. I don’t remember their name correctly. It’s either [Forney’s 00:26:20] group or [Forney’s 00:26:21] institute, that they went out and they surveyed 1200 CEOs from mid-market and enterprise companies across the United States. It turned out that one of the stats is 78% of CEOs believe that marketers are not spending enough time investing in PNL quantifiable impact. That scares the crap out of me.
[00:27:00] If [crosstalk 00:26:42] CEOs really don’t know what marketers are sending money on, they are going to pull the budgets, and that’s exactly what’s happening. The less accountability there is, the more pressure there is on marketing and the less freedom that marketing has. Some of that is a response to the change of marketing conditions. Some of it is actually just a response to the change in the relationship between CEOs and CFOs and marketing departments in general. The third piece is that there’s been a proliferation of technology over the course of the last 10 years or so, that has actually made this a lot easier to manage.
[00:27:30] If you go back to 2000, when I started my first marketing agency, we just didn’t have the tools in place to do this as easily or as well as we do now. The technology has caught up to the thinking a little bit at the same time as the market conditions have changed.
Andy Baldacci:


Okay, so it’s almost like before, it wasn’t that people were unaware of the importance of ROI but just there’s no real way to do it, so you almost had to have the more qualitative assessments of things like, “Did this seem like a well thought out effort? Did this reach whatever measurable things you have,” but you didn’t have the deep insights that you do now with dozens of analytics [crosstalk 00:28:02].
Jake Finkelstein:


I think that I’ll qualify that a little bit. There were many good ways to do it, they were just not as easy or as inexpensive. The other piece too is that quite frankly, it was not a priority for many marketing organizations and unfortunately, it’s still not a priority for many marketing organizations. It will be. Every successful in house brand marketer and agency in the world will be doing this in 15 to 20 years because it will be a requirement of success.
If you can spend millions of dollars on a really cool concert, why wouldn’t you? It’s fun, it’s’ exciting, it’s creative. It’s a lot less sexy to say, “I’m going to deal with a data quality project that’s going to make me a couple million dollars.”
Andy Baldacci:
I mean, for me as I have my own unique background where I was a professional poker player for 8 years. You see it a lot in gambling where it’s that rush. They want the big win. They don’t care about grinding it out day in day out to make a living. They care about just going for the big score and a lot of times people end up broke doing that. I understand the psychology of how people, if it’s boring, if it’s not exciting, they just don’t care. Even no matter how rational the argument may be.
Jake Finkelstein:
I’ve a lot of empathy for marketers in that position. I absolutely get it but I see us in the business of helping good people build great companies, not doing really interesting creative for creative’s sake. That’s the difference between design and art. Art can exist for art’s sake, design has a purpose. I feel the same way about marketing and advertising.
Marketing and advertising exist for a purpose. It’s to support the growth of the business. How do you do that? By impacting P&L. Everything else is just a hobby.
Andy Baldacci:


Interesting, I like that distinction, I mean it’s very clear. It’s as succinct as to the point. I hadn’t thought of it like that. I really like that. What I’m curious about now though is you talk about this methodology, you lean very heavily on the startup lean methodology and everything that’s come out of the startup world, how do you actually apply this to your clients. What do you do differently than other agencies that let you identify the right problems that let you learn when you’re wrong faster? How do you actually apply this?
Jake Finkelstein:


We have some methodologies in place around discovery both with regards to internal stakeholders and customers. Some of it is quantitative driven. There are some kind of data sciencey kind of stuff that our team does and marketing analysis work, marketing analytics work, excuse me. There’s also just a lot of pure client consulting, where we sit down and we work with our clients to understand their business problems, rather than their marketing problems. Marketing is a tool set that we use and apply to solving business problems.
[00:31:00] Ultimately, they’re business problems. If you’re not making enough money because the light’s on, that’s a business problem. Marketing is a contentious solution, so with sales, so does going out of business. We look at it first and foremost from a business consulting standpoint. Once you get beyond that and I mean this with all due respect to marketers in general, there are a lot of really good marketers out there. There are a lot of people that can execute really well.
[00:31:30] What makes us different isn’t so much that our team is orders of magnitude better at what they do than some of our competitors, although I would argue we are better. We are orders of magnitude better than some. Once you get over a certain bar, most of us are pretty good. It goes back to the core methodology, how we learn what works and what doesn’t work.
[00:32:00] A lot of that is driven by things like split testing, multivariate testing and continual consumer research, so we can understand are we getting the kinds of behaviors that we really want out of these audiences? If not, then we can identify discretely why so that we could adapt and continue to run, do interesting tests.
Andy Baldacci: It’s the difference between waterfall development and agile. You’re not going to place these huge bets without first feeling the waters, without getting some knowledge and some feedback.
Jake Finkelstein:


Yeah. A good example of that is we have a client, when we started working with him, I believe if I remember correctly, our 1st assignment was a $4000 consulting gig and now we spend $3 million a year for them. It’s us applying our incremental approach, it’s not that we couldn’t have gotten a larger budget. It’s just that we did not know more than 3, 4 months in advance what we thought was going to happen. We’re constantly learning, we’re constantly building discrete hypothesis that we believe are testable.
[00:33:00] We’re always testing them both at the strategic level and the technical level. As we gather more evidence, if something’s working, then of course we’ll invest in scale. We can’t gather evidence with enough statistical significance. In other words, we believe that if these will be true at scale, then we will not scale it. We’re constantly playing this game of tug and war between where do we want to play it’s resources because quite frankly there’s no lack of ways to spend time or money on marketing and advertising. It’s about placing the right bets.
Andy Baldacci:
Okay. I think that you, not to say you had an advantage but I think it helped when you started as a consultant. You started by thinking about these bigger business problems and advise them on how to solve them, whereas for a lot of agencies out there, that’s not their background. Their background is, they were the ones that, someone come them to say, “Build us a website.” They build a website.
How would you give advice to those types of agencies who don’t really have the processes in place to do discovery on finding out what the business problem actually is?
Jake Finkelstein:


To be very clear, there’s nothing inherently wrong in having a brand come to you and say, “Build me a beautiful website,” and build them a beautiful website. However, you can drive a nail into the wall with a screwdriver or a hammer, a hammer is just easier. If the website is not actually what they need in order to solve their business problem, then they will never be happy with your website, regardless of how pretty it is.
[00:34:30] You immediately have a disconnect in expectations. If you do not want to take a strategic position in terms of offering recommendations or what to do, for instance, don’t do a website, do a mobile app, which again, I think it totally fine, not to take that strategic position. Make sure that you have clarity on those expectations around why. It starts with, “Why are you doing this? What is driving that decision? Now let’s talk about how do you want it done.” From an agency perspective, at the worst, when they come back and they say, “This isn’t working.”
[00:35:00] You can say, “We talked to you about why you wanted to do this and we talked to you about what you wanted to achieve, we believe that this does this.” It allows the conversation around expectations management to be much more even.
Andy Baldacci: I like that. That’s a really interesting perspective that I hadn’t thought about that way. At the end of the day, a lot of it does come down to setting expectations, setting them upfront. Then actually finding a way to objectively measure them and say, “ Hey, this is what we need to do, here’s how we’re going to measure it.” At the end, “Did we do that or not?”

Jake Finkelstein:

There’s a formula to measure happiness, have you ever heard this?
Andy Baldacci: No.
Jake Finkelstein:


Happiness equals reality minus expectations. If your expectations are 3 and reality is 1, you have a -2 and therefore that person is unhappy. You better know what the expectations are and whether or not you can exceed those expectations, in order to create customer happiness. Otherwise, you’re going to get caught in that loop, which many agencies do, which is they’re just running putting out fires all the time. Often times, that’s because their clients are trying to solve problems they really don’t understand.
If you want to be that agency that has a really great website or designs a really great print ad and you see yourself primarily as a design shop or a programming shop, that’s okay. Just understand the business that you’re actually in.
Andy Baldacci: If you can’t measure it, if you don’t even know the real goal of the project, it’s very hard to be successful. You’re just guessing.

Jake Finkelstein:

Yep, and you know what, sometimes you’ll get lucky and they’ll love it and great. When you’re not lucky and they say, they’re really unhappy, who’s going to get blamed? It’s going to be the agency and you do not have any evidence to fall back on to defend your position. It’s not about creating an adversarial relationship with your client, it’s about creating clarity. That’s actually a service to the client. You’re helping them think through their motivations.
[00:37:00] Sometimes in doing that, you talk them out of doing the thing that you want to do or that they want to do and then do something better. I don’t think that agencies have to take a business strategy solution approach to client management. I think that integrated agencies like ourselves have to. I think there are many good design shops or digital shops that really don’t have to. They do have to realize that there are motivations and strategies behind what they do, that are driving their activation.
[00:37:30] If they want to keep a client over the long term, they have to understand those motivators the same way that brands need to understand their customers’ motivations and desires.
Andy Baldacci: I think that’s a great way to put it because you’re right. There isn’t only 1 type of good agency. You can be strategy, you can do implementation, you can do whatever side of it you want but wherever you are, getting the clarity in expectations, getting all that work put in up front, so you know actually what needs to be done, is something that all good agencies must do.

Jake Finkelstein:

Yes. That is the core of account management. There’s actually a really great book if your listeners are interested in this. It has a funny title. It’s called Getting Naked by Patrick … I think it’s pronounced Lencioni. It’s a very short book, written as a parable that talks about client management. It talks about it from a consulting standpoint. I actually think many of the principles that they touch on are core to any good account management team.

Andy Baldacci:


I’ll definitely get that linked up in the show notes. I would love to just talk and really go deep into the account management side of it. That alone is one of the biggest parts that set apart the agencies that are doing really well and the agencies that are struggling to get by. We don’t have enough time to do that right now. I’ll get that in the show notes. With that said though, I’m curious, when the client comes to you now, when you are doing so much discovery, so much up front digging out what the business problem is, what does it look like?
A big brand or whoever, isn’t coming to you and saying, “We need a new website.” Or are they? How does a new client relationship work with your agency?
Jake Finkelstein:


That’s another good question. Almost all the time, clients come to us with a perception of the solution that they want. They’ll say, “We want a new advertising campaign, we want a new website, we want a new billboard, we want a new brand.” They haven’t fully thought through why. It’s the why, the what and how again. Almost all the time, we make the assumption that whatever somebody comes to us with, is probably not what they actually need to be doing. It’s a healthy skepticism, a point of view with skepticism, and I’d say maybe half the time that’s actually true.
[00:40:00] The way that we approach those engagements is, we make the assumption that they are incorrect because it leads us down the path of asking exploratory questions. Very rarely do we end up … Somebody comes to the table and says, “I want to spend $50,000 in advertising campaign on Facebook.” We say, “Okay let’s go.” It’s all those questions about what are you trying achieve? Who are your audiences? What data or information do you already have that we can leverage in order to be more successful?
[00:40:30] It starts with what we call a audit match and planning process. Really what it does is discovery analysis and consulting. We then build a implementation program that is almost always short term oriented. Especially, for new clients, we do not believe that we can see into the future, period. We can’t model into the future more than 3 maybe 4 months. Once you get past a quarter, it is really hard for us to say, “We think this is going to continue happening or it will not happen.” What we actually do, is run short sprints on programs.
[00:41:00] We don’t always sell it in that way, we sell it in integrated program, we’re going to come to the ideas to table … Come to the table with new ideas. Truthfully what we’re doing is sprints. We’re saying, “Well, let’s do these discrete things and see what works, see what doesn’t. Later on your creative, later on you’re messaging. Scale what works, stop what doesn’t and pivot it into other areas.” What that actually does, is that it allows us to start with much smaller budgets up front, which is a little counter intuitive from an agency perspective.
[00:41:30] It makes it easier to close deals because there’s less risk. Also over time, we tend to capture larger budgets because it allows us to have more evidence to say, “If you give us budget A, we can deliver to you outcome B.”
Andy Baldacci:


I think it’s just all around a really smart way of thinking about and of doing. Like you said right, when you start off small, this niche yourself, but it lets you build not only just a track record with them but also a relationship with the client. They see how you work, they can see the results but they trust you. It’s a deeper relationship, so that when you go back and say, “We could triple this budget, we could do whatever, we could change in these directions.” They’re going to be much more up to be on board with it.
Jake Finkelstein:
Yes, it is about trusting and credibility and transparency, again, 3 of our core values. It is also about not putting our foot in our mouth. I’m thinking of 1 client, when they 1st came to us they had about a million, a million and a half dollar budget that they wanted to deploy. We actually told them no. we told them to stay with their current agency because we wanted to go through the discovery process. Only about a year later did we say, “Okay, now give us the budget.” We couldn’t have done a good job with it up front.
It takes discipline as a business to say, “There will be a time when we want to do that and we will be well prepared and we’ll be very successful when we do but now is not that time.” It’s hard to do. As a business runner, it’s hard to do. I do think it’s the right thing to do.

Andy Baldacci:


There’s 2 things. 1 is it goes back to the happiness equation. By doing that, by taking it slow, you’re able to actually make sure that once you do set the expectations, you’re easily able to meet and exceed them. If you do way too early, you’re gambling again, it’s luck. The other thing that I want to touch on is that, these aren’t unicorn clients are coming to you and saying, “We want to make more money, tell us how to do this. We trust you, do whatever you want.” They’re coming to you just like any other client, where they think they already know a solution.
What’s different though, is the work you do in your sales process and everything that leads up to the actual proposal on the work. I think a lot of it goes back to the challenger sales model you talked about is that, you push back and you make sure that that’s actually what’s needed. It’s not that the clients themselves are different but that your methodology gets different results.

Jake Finkelstein:

Yeah. I think one of the higher compliments that we receive from prospects is that we ask questions that they haven’t heard from other people. There have been times quite frankly where I’ve gone to a pitch meeting, we’ve been there for an hour, we’ve asked 6 questions, allowed the prospect to talk for a hour. They think it’s the greatest meeting they’ve ever had and they’ll say, “When are you going to pitch us?” Our job is to say, “We’re not going to. Our job is to discover.”
[00:44:30] It’s that process that I find gets the right kinds of clients really excited, also frustrates the hell out of some people. What they want to see the dog and pony show, the shiny object and there’s a place for that but our approach doesn’t start there. I’ll be the 1st to admit that we’re not right for every brand but I think that for the right kinds of brand, and these are often times mid-market growth oriented companies. They’re trying to figure out how to cross the [chasm 00:44:49], it’s the analogy. They know how to make money on the low end of the growth curve.
[00:45:00] They think they can make money on the high end of the growth curve and they’re scared they’re going to lose a lot of money in the middle because they probably will. Our job is to help them get over that hurdle, so they can really grow a Hockey stick.
Andy Baldacci: I’m curious, we don’t need to go deep on this but what would you define as a mid-market growth curve? What size, what sort of growth, where are they at?
Jake Finkelstein:
It’s a good question and we’ve had some pretty really healthy debates internally about that. My personal point of view is that it has less to do with size and more to do with stage of business. I will answer your question directly. What I mean by stage of business is, these are companies that have a successful business model. They know how to acquire at least a sub segment of their total addressable market and they’re making money. Often times these are organizations that have a good sales team, a good marketing team.
[00:46:00] Maybe the marketing team is really focused in 1 area or maybe they’re really great at content or really great at email marketing, not running fully integrated programs. Or maybe they’re oriented more towards sales support. The sales team is really driving a lot of revenue. That’s only going to get you up to a certain level.
[00:46:30] When you look to say, “How can I scale and how can I make it predictive, so I can constrain my cost per sales qualified leader, my cost for transaction, and what does that means in terms of my average lifetime value for our customer?” Smart leaders in these organizations understand the kinds of questions but they don’t really understand the operational methodologies that need to be in place in order to get there. Those are the unicorns for us.
[00:47:00] People that are asking those kinds of questions but don’t have the internal expertise or they just aren’t doing it well. We’ve seen organizations that are a couple of millions, maybe 5, $6 million a year in revenue that are there, reaching clients that are 700, 800 million, a billion dollars before they’re there. You can get quite big with a working sales team and a really underdeveloped marketing partner. At some point, you need that higher level of sophistication to really get to the next level.
Andy Baldacci: That was a great answer because I think you’re right. You could have just given me numbers but it’s more than that, it is far more than that. That goes back to everything you’ve been talking about today is that you can’t really look at it just at face value. You need to dig deep and get into the need of whatever it is they focus on, whether it’s the problem, whether it’s anything. I appreciate that. What I want to transition into before we wrap up is, I know you’re a part of the Entrepreneurs’ Organization, EO.
[00:47:30] Can you just describe to listeners what that is and how that has helped give you … You have an amazing breadth and depth of knowledge in not just in the agency world but in business in general. I’m curious how you’ve been able to develop that.
Jake Finkelstein:
Entrepreneurs’ Organization has been a fantastic experience. In full transparency, I’m on the regional board for the Raleigh Durham area, so I’m definitely a believer. EO is an international organization of entrepreneurs that have at least a million dollars in revenue per year or 2 million dollars or more in investment. That puts us any number in the 2% of businesses in the world that actually can get to that scale. The entire concept is built around non judgmental experience sharing.
[00:48:30] It’s not a leads group and it really focuses on the 3 aspects of everybody’s life; personal, family and business. It is in my experience, a bunch of smart people sitting around talking about how they experience certain challenges and opportunities. If you ask my wife, it’s entrepreneurial therapy. Either way, I think it’s a great experience. There’s hundreds of chapters worldwide, I’ve been to some local award events, they’ve been really great. The core aspect of EO is a once per month meeting, what’s called a forum.
[00:49:00] Where you have a smaller group, it’s usually about 7 or 8 business owners because you have to be a business owner or principal in order to be in EO. You get together and you go through the forum experience and in EO they call it the consult and sharing experience. It’s essentially not nonjudgmental sharing, where you talk about the best and worst things that happened in the last month on personal level, family and business. There’s usually a presentation.


1 person presents on a deeper issue that they want to hear how other people have dealt with it or have experienced it. Again, it is never, “This is what you should do, Jake.” It’s always, “Well, when I ran into a similar situation, this is what happened to me,” or, “I haven’t gone through this similar situation, so I can’t really speak to it,” and we’re just perfectly fine as well. I have found that you develop some really strong relationships with excellent leaders.
It’s been very helpful for me not just understanding that A, no matter what the size of the company is most of us are dealing with the similar shades of the same problem. I have had people I’ve been informed with, that have hundreds of employees, that have raised hundreds of millions of dollars and they’re basically dealing with the same problem that’s in my little company. That actually makes me feel better. Also, it’s I get a lot of good learning from leaders that have excellent experiences.
[00:50:30] That’s really helped shape my thinking about how to run my business and how to bring good people into your organization and turn them into leaders.
Andy Baldacci:


Something I’m going to talk to more and more in successful agency owners, 1 thing I see in common is, 1) it can really boil down to just the drive to always learn more or whatever. That might be through books, that might be through any other form but what seems to be the most impactful, has been some form of masterminds or organizations like this where you have people in similar positions as you, that can give that non judgmental feedback. Reading a book is 1 thing, that gives you tons of ideas but you don’t have a feedback really.
[00:51:30] It’s really hard to learn if you’re actually doing it right, whereas when you have a group of people who can talk back to you and see your results and give you that feedback, that feedback loop is really what makes it stand apart from other ways of learning and improving.
Jake Finkelstein:


I wholeheartedly agree. There’s a lot of nuance in this conversations and it’s the follow up questions. Why did you do that when you faced that situation? The other thing too just pragmatically, is that sometimes it’s just really helpful to be plugged into that network. A couple of years ago when we wanted to shift our health insurance and benefits program for our employees, I went to my EO friends and said, “Who are you using? What’s the practical experience that you’ve had here?”
[00:52:30] I’ve actually got turned onto a lot of great folks, one of which we’re actually now using. Another core principle ate the EO is that we can’t sell to each other. It takes a lot of the pressure and odd conversations away. That’s not to say that there aren’t people in EO that do business with one another but there are some pretty strict rules around it. I do think that the practical network affects those kinds of groups, whether it EO or some masterminds or whatever, is to me at least almost as valuable as listening to all the experiences.
Andy Baldacci: You’re right, it’s a practical stuff where sometimes it’s not this deep theoretical question about the flaws of your business. The fundamental things like that, is just you need instrument on the best way to do X and there is an actual answer for that.
Jake Finkelstein:
Yeah and it doesn’t have to be, “Oh, you should do a blank because that person probably doesn’t know what I should do.” They can say, “This is how I do it.” I’ve heard conversations where I’m interested in giving equity to some of my key employees, how do you have it structured in your organizations? It’s not that 1 approach is right or wrong or better than another but it’s just additional information to inform myself as a leader to make better decisions.
Andy Baldacci:
It seems like it all circles back to what Carol said about you being one of the top upper echelon of decision makers. I think what a lot of it does come back to, is just having more and better informed things to choose from. Knowing what the real options are, so that you can make a more informed decision.
Jake Finkelstein:


The hard part is there’s a lot of information out there and it is very easy to get to the paradox of choice. Having some framework just kind of sift through all that is helpful. I am a huge believer that the more information you have, the more feedback that you have and the faster the iteration on that. Better positions, smart leaders and managers, will be in to make better decisions.
Andy Baldacci: That’s perfect. I want to ask 2 quick questions before we wrap up. Jake, right now, what do you spend too much time doing?
Jake Finkelstein: That’s a great question. Personally, I probably spend too much time on HR. That has to do with the fact that we need a new HR manager. I’m up dealing with my team but there’s just some paperwork things that I need to get off my plate.

Andy Baldacci:

What do you think you don’t spend enough time on? If you were able to remove that off your plate where would you put that time to have either the most leverage or just maybe even just not in the business at all?
Jake Finkelstein:


I think that all CEOs need as much quiet unstructured time as possible. That’s hard to do when you’re the leader of your organization because [inaudible 00:54:49] a lot of people need your input. The most successful leaders that I know are ones that delegate pretty much everything, so they can take a step back and look at what’s actually happening and have quiet time to reflect. It’s a little counter intuitive, when you see that beehiveness of some businesses and CEO sitting there quietly.
That’s actually what I would love to spend more time on is just stopping and reflecting because I think perspective is extraordinarily helpful in making the decisions.
Andy Baldacci:


That’s great. Jake before we say goodbye, if people want to hear more about what you’re up to, about EO, anything like that, where should they go to check all that up?
Jake Finkelstein: You can visit our website which is methodsavvy.com. That’s M E T H O D S A V V Y.com or fell free to shoot in an email directly. I’m just Jake, J A K E @methodsavvy.com.
Andy Baldacci: Perfect. Then if they do want to see if there’s an EO organization near them, what’s the website for that?
Jake Finkelstein: The best resource to go to is eonetwork.org.

Andy Baldacci:

All right, perfect. Jake what I’ll do is I’ll make sure I get all that linked up in the show notes, so that listeners and readers can check all that out. I just want to say thanks so much for taking the time and coming on the show. I really appreciate it.
Jake Finkelstein: Thank you for having me, I appreciate it.

Want to learn more?

To stay on top of what Jake and his team are up to, you can follow them on the Method Savy blog, but if you want to reach out to Jake directly, you’ll need to listen to the episode to get his email address 🙂

To find an Entrepreneurs’ Organization chapter in your area, head to EONetwork.org

Resources mentioned:

Getting Naked by Patrick Lencioni
The Challenger Sale by Matthew Dixon and Brent Adamson
The Four Steps to the Epiphany by Steve Blank
Happiness Formula

Thanks for listening!