Video - How to Increase Efficiency and Profitability with Corina LudwigJun 30, 2022
VIDEO: 53:15 mins
AUTHOR: Robert Craven and Corina Ludwig
In this GYDA Talks, Robert talks to Corina Ludwig of FunctionFox. Corina is widely recognized by her colleagues and clients as the glue that keeps FunctionFox together. As a member of the start-up team, Corina has been instrumental in facilitating the company’s growth. Organized, disciplined and focused, Corina is responsible for overseeing the FunctionFox engine, as she manages daily operations; vision and planning, advertising and marketing; Corporate Culture, Human Resources and everything that falls in between. She has negotiated many successful contracts for the company with key industry leaders.
Corina has been recognized as an industry leader in the technology field. She was awarded Executive of the Year by (VIATEC) the Victoria Innovation, Advanced Technology and Entrepreneurship Council and sits on their board of Directors. Currently she is also Vice Chair of the IWIST Board (Island Women in Science and Technology), is a Camosun College Marketing Program Advisor, currently serving as the Victoria Mentor for the Women’s Enterprise Centre and continues to speak at many events.
Robert and Corina discuss:
**The top 10 current trends in agencies** and how to increase efficiency and profitability when running an agency.
1) being remote
2) niche blurring
3) using free-lancers
4) buyers going in-house
5) less discipline focus
6) explosion of ad/marketing channels and their prices
7) Print ads coming back
8) fees up... must be 65% billable (not 40%)
9) timesheets more important than ever... as pricing becomes value based
10) 4Ms of Mindset, Market, Message, Money
**How to increase efficiency and profitability in your agency**
1) vision, purpose, difference and how to get there
2) niche focus
3) hire better people. Hire slow/fire fast
4) say Yes and then figure it out
5) know your KPIs then follow them
6) focus on what you are doing and not on what others are doing
7) surround yourself with great team members and mentors
8) focus on people and culture
9) be yourself
10) put up your prices
Robert Craven 00:07
Hello, welcome to GYDA Talks grow your digital agency talks. And today I am delighted to have with me Karina Ludwig. And what we are going to be talking about is, and it's great because it's coming from her, it's going to be top trends in the agency world, and how to increase efficiency and profitability when running an agency. So Corina, rather than me doing the introduction stuff and reading off that, tell us who are you? What do you do, and and what right, do you have to talk to us about these subjects?
Corina Ludwig 00:40
Yeah, thanks so much for having me on the show's pleasure to be here. So the agency world I've been in the agency world, well, since after high school, so I ended up going to design school, I worked for large agencies that worked for Adobe, I worked for Ogilvy and Mather in New York. And I've been in the agency world, my entire tenure career career. It's an area that I'm very passionate about, definitely the creative side, but also more so the business side. And now for the last 22 years, I've been running an agency Slash creative. Well, it really is a software company, not as glamorous as the agency world, but we help agency owners, we help creative professionals. And really what we do is we sell them time tracking and project management, so that they can increase the revenue. And really, at the end of the day, spend more time being creative. So we've been doing that for 22 years, we're in about 120 countries. And it really helps clients, increase their revenue, keep track of their clients, their projects, their personnel, and everything from the start of the concept and all the way through to completion. So it's been a really interesting venture. And we've worked with 1000s of agencies. And so what we see is a lot of trends in those agencies that I'd love to share with you guys today.
Robert Craven 01:58
Right? Because that's, that's the thing. I mean, the thing is, you know, it's people like you that have seen, as you say, 1000s of agencies, you start to see these repeating trends, these repeating fashions are things that people keep missing all the things that people get wrong. All right, so let's just go, let's just go for what you see as a top trends are in the agency world, why not? Why not just go for it? So we do the top five first, and then we do what are the five? So I'm going to interrupt you as we go through this. Let's see how we get on. So some top five trends in the agency world.
Corina Ludwig 02:33
Sounds great. So obviously, COVID hasn't had a big impact. So the biggest trends in 2022, that we've seen, as obviously, I think the first one is quite easy. A lot of people are going remote, they're doing the hybrid. They're increasing their profitability, because they're letting go of their building, and employees are happier, and there's more benefits. You know, that's controversial, of course, to becoming remote, they've had to be more flexible, which has changed their culture, and in most cases for the better. So agency life is more demanding than ever, with the balance of the home life. And those lines are blurred. So that's, that's the primary one, our self as our company function, Fox, we've let go of our building as well. And we've seen nothing but positive change. So it's been a big impact. And we've looked at ourself a second big one, unless you want to jump in there, Robert?
Robert Craven 03:25
Oh, yeah, I can, well, I'm gonna hold but let's do the five then like, go back through it. That's the way to do that.
Corina Ludwig 03:32
You know, in the past, prior to COVID, people have been very niche oriented. And that's something that we still encourage is, you know, stay focused on a niche and don't try to be everything for everyone. COVID has had an impact on that for sure. And those lines have become a little bit more blurred, people have had to take on more work. They've had to embrace other disciplines that you didn't before. And the advertising GEOs have dropped, right. So instead of focusing on your local market or your surrounding market, people have gotten more international. And we've seen that trend really change in the last couple of years. They're taking on projects outside of their norm. They're branching out globally. And that's been very helpful in terms of the financial viability of their company. The other big one that we're seeing is using freelancers more. So you know, they've in some cases had to let go of some of their staff. They've brought some of those back on as either contractors or freelancers. So the Freelancers have really stepped up in the last couple of years. And we've seen that as a big trend in the agency world. And then the one that always ebbs and flows, it's just like real estate market. You know, there's the buyer's market and the seller's market, we've seen that agency versus in house that has always shifted, and we're seeing a big shift to in house versus agencies at this point. So you know, management likes to see what's happening, and they're bringing things in house and people are doing that and we're finding that that has been a large trend in the last couple months to year, definitely impacted because of code as well.
Robert Craven 05:07
So that's that's a list I'm not attacking the list. I'm just gonna get back to the to the to the top of that which is which is the piece around remote because I'm not sure.
Corina Ludwig 05:20
That's controversial for sure
Robert Craven 05:22
It is the jury the jury's still out about whether it's a good thing or a bad thing. I mean, you're, and some people I speak to say: Oh my God, no, productivity has gone absolutely bonkers because now people don't spend all the time at the watercooler and playing foosball, and they no longer get Friday afternoon free beers, and they just wake up in the morning, turn on the laptop, and they don't even take lunch. And it's and productivity has gone through the roof. And then I hear other people saying that that remote is just allowed the naughty employees to get away with murder, because you never know quite quite what they're doing. And whether they're actually being true to their do. I mean, you you say that you're your own business has gone fully remote, they've let go of the office buildings, is that right?
Corina Ludwig 06:11
Yeah. And you know, I'll say first and foremost, I'm an office person, I've always been an office person, we had prior to COVID, we had 25% of our group remote, and that that worked. But there was always a, you know, that group and the office group. And so that hybrid model is really challenging. I'm all for having culture, everyone in the same building, everyone working together those ad hoc conversations that are now more planned. I'm all for being in the office. And so what I loved about giving up the office building, and the value that I saw in that is, everyone's on the same playing field, everyone's remote. So everyone, when they come to the table, they're on a Zoom platform or an online platform where everyone's on the same table. So that brings everyone on the same playing field, what you're missing. And what I think as you know, employers you have to be aware of is there's not that camaraderie that you have before onboarding of new hires is very challenging. We've hired a couple people during COVID. And you know, they think our culture is great. And I'm thinking how do you actually think that because you haven't even met the team like that just, you know, blows me away. But they love it. And they think that there's, it's very inclusive. And you know, I think you have to do things in your culture to make culture happen, or to keep that culture going. Now, more than half of all of our team, with the exception of their new hires have been there for more than five years, most people over 10 years, and quite a few over 15 and 20 years. So the the team has a really solid team, if you're doing that with a new or a startup group, I think that would be very challenging if people are in different different sub plans or even different time zones. So all of those factor into it. I'm not saying that it's the best version of that. But there are some definite advantages, and I'm still only I'm still on the office side. But definitely some see some advantages of being remote.
Robert Craven 08:11
Yeah, I think I think that part of the trouble is, is it it makes everything so transactional, you can just use zap an email saying, Oh, by the way, do this. And by the way, do that loses all the softness of I don't know, what would normally happen would be, I'll send you an email later today. If you've got five minutes to get round to or have a look at it. That would be that'd be fantastic. Yeah, of course. Is it important? Yeah, is because it's a new client. And so you miss all the all the soft stuff. And everything ends up almost being on a on a spreadsheet with a ticker across next to it. And the interesting thing is that some members of staff just love that because they've got relatively pointy heads. In any case, they just want to know what the tasks are. And they just, they just plough through it and get it done. But yeah, a lot of people go to work for especially younger people, they go to work from the social, you know, but the whole point of going going into work is you have a beer at the end of the day, and you can kind of chat up some member of staff you find quite attractive or have a laugh at them or whatever it is. And that whole, that whole piece is then missing for for younger people that they don't get all that almost extension of university going on. They just end up sort of at the end of the end of that screen, which I'm not sure I'm not. We thought when COVID came in, this isn't sustainable. I'm still not convinced it is sustainable, unless we have a hybrid model where we would get to see people at least on two days a week.
Corina Ludwig 09:45
And I would agree it's not for everyone and we definitely have seen you know, there's a certain type of employee that it works really well for in the agency world. There's certain roles that work very, very well for that. There's other ones like you know, the creative team As the brainstorming is just not the same, right, coming together for a kickoff meeting on Zoom, or on an online platform is just not the same as being in the room and actually, you know, working with stuff on the table. So, you know, I think I think we've all had to adapt. But there's definitely some some value in the hybrid model or going back to the office, having a colocation space, or a workspace a co working space where people can get together on either quarterly or weekly, whatever your rhythm for your team is. And we found that, you know, that's going to be important for us.
Robert Craven 10:39
Yeah. I always think it's interesting, this idea of blurring which I which I guess I hadn't thought about in such terms, you're you're saying that what you're seeing is, is niche blurring and geographical blurring, which is the very thing that I mean, not not geographical blend, but niche blurring is the very thing that I've just done a call earlier today. And the gentleman was saying the thing that made that agency successful was that they they stuck to the knitting, they said: This is what we do, we are expert at this. And if someone asked us if we can do some email marketing, or some SEO or some blog, right, and we said, it's really interesting, we've got a friend over there who can do but we're not going to move. And therefore we will be known for what we're excellent at. But what you're saying is yours to use in order to survive. So maybe that's the kind of a bit of a clue here, that a lot of agencies have have have taken on works at work around the shoulders that they wouldn't normally have taken just to make sure they keep the money coming in. So I wonder if that niche blurring is a concrete consequence, not just of carryover, but also when people saw sales starting to diminish during COVID, or whether niche blur and wonder where the niche blowing with just a consequence of COVID?
Corina Ludwig 12:09
I believe so. And we see that trend actually going back. So you know, the smaller agencies really had to adapt the strong solid ones that have been in the industry for a long time that are well known, they could stick to their niche for sure. The ones that were smaller, and just getting their ground and then COVID head, they just kind of went, Okay, well, we've lost this client, and this was a tourism or a travel client that we have, we've lost that one. So we're gonna have to adapt, and those that were able to adapt and take on something outside of their niche, were able to stay financially viable. Those that were too small and didn't have enough of a cushion, and stayed niche focus. They subsequently had to let their team go or slowly close the business. So I think that's going to return I think the real focus should be niche focus, we've been niche focus for 22 years, we're focused on creative agencies, that's been really good for us. It's our market, we know that market really well. We can speak to that market and have the right language and, you know, our products built for that. And I would say the same thing for the agency world. You know, if you're really focused on insurance agencies, or tourism or whatever it may be, stay in that area, if you can, but the ones that were solely focused on tourism, they really had to adapt.
Robert Craven 13:25
Well, that, yeah, we had one client who lost in the course of one day, when when COVID was announced, it was official. He lost 98% of his business, each phone call is I know that contract, we've got $400,000 Over the next year, cancel it, you know, that contract, we've got $50,000 Over the next year, we're not going to pay. And that was because he was doing weddings, wedding venues. And you know, the wedding industry just came off a cliff. And then and then you're maybe more interesting about about about geographical blurring, because I mean, when the interesting thing about geographical blurring is suddenly certainly on the staffing side, it made no difference were a member of staff live or came from and I think it was the final kind of aha, pre COVID we were saying: Oh, it's very reliant people to be living within 25 miles we lightened to be in the office, blah, blah, blah. There's no way you could ever sell an account worth more than $20,000 without being there in person, you know, and of course, COVID COVID blew all of that away. You can sell $100,000 contract on a Zoom call, Hey, you can it doesn't matter where your team come from doesn't matter whether they're in Bangalore or Missouri or London, you know, if they can do the work and they they brush up cleanly in front of clients, then that's absolutely fine. So I I certainly see the total geographic blurring on the on the supply side. And then you're saying I guess that also applied in, in looking for clients and no longer were you thinking of clients being local? Is that is that the blurring you're thinking of?
Corina Ludwig 15:17
Yeah. So we're seeing it three fold. We're seeing it in the work that they're taking on the clients that they're getting. So they're not necessarily local as local anymore. We're definitely seeing it in terms of the new hires. So instead of hiring locally, we're seeing that they're hiring people from other areas. Not only just from from a cost perspective, but also just from a talent perspective. And we're seeing that their staff because they're going remote or somewhat hybrid, that the staff, you know, we're in very small, central, really busy areas, those ones that were, you know, living in very tight quarters, and we're getting out and going to work every day when they couldn't go to work. What they found is they actually moved outside of their area to more remote areas, so they could have more space. And so not only is their team more remote, they're getting more clients that are remote. And subsequently, the industry as a whole is becoming less defined in terms of geography.
Robert Craven 16:22
And the tricky thing is, is that, you know, this just messes up salaries. Because if you're just so you're a London agency. So you say you're a creative and you live in you live in London, normally you apply for jobs in London. Now you can apply for jobs in Paris or New York makes no difference. Except you clearly want capital city pay rates. But then the next stage is if you're in somewhere, which is slightly obscure. You can be applying for jobs in London or New York comparison still be expecting capital city rates. And there's been a whole blurring of, of that which kind of leads on naturally to your next point about about freelancers, that finally, freelancers, in my opinion, finally, freelancers have come of age, you know, it's freelancers are a bit, it was a bit pre COVID. It was a bit wobbly, you know, some are good, some are bad, some are reliable, someone you're never quite sure quite what to do. But in COVID, it really felt like freelancers actually stepped up to becoming most freelancers stepped up to becoming proper, professional, reliable, proper contracts, proper statements of work, and delivering the whole that whole. I suppose industry of freelancers has stepped up. Is that something that you've, you've seen?
Corina Ludwig 17:59
Yeah, absolutely. But what we've seen is people have left their big agency. Subsequently, maybe because they were let go, or the team had to downsize. And they said, You know what, I'm not going to go back to a large agency. Or I really, I can, I can be more profitable if I work on my own, and I can take on the jobs that I want to take on and I get more flexibility. So there's lots of advantages to that. And those that were freelancers before, all of a sudden, now the agencies are hiring more freelancers, so their world has opened up. And I think we're seeing this big influx of not only people that were employees have become freelancers, but the freelancers that had, you know, maybe just a small steady stream have increased their client base, because the big agencies are now looking for more freelancers, it's less of a risk for them to have a large employee pool. You know, they might have had to downsize. We saw that a lot of cases and they decided, let's just go with freelancers and contractors, at least for the next little bit until we know, you know that we're financially stable enough to hire people back.
Robert Craven 19:03
I'm not but I'm not sure that that that will kind of return to business as usual. I'm not so yeah, the COVID is not over. That's obviously obvious. And we're all in the whole outside world is desperately uncertain, as we all know, just continues to go from uncertainty to uncertainty. And, and I suspect that a bit like: Oh, working from home works, oh, maybe we'll have more of it. I think similarly, a lot of people don't. Oh, freelancers. What's nice about freelancers, if there's no work for them, you just turn them off. Right? Then when you want them, you turn them back on.
Corina Ludwig 19:43
It's a different kind of project, right? Like if you have something that specific of: Oh, we need a great illustration. This is a real illustration project. Let's get a different freelancer, someone that's really specialised in that and the freelancer can be more specific and garner law your rates because they can be more specialised?
Robert Craven 20:05
Good, I really liked that. And your final piece was about about the in house, which was, I'd be intrigued to know what you're, what you're seeing. So, I work with a number of agencies that actually help people. Create in house teams, that's what, that's what they do. They say we're an agency, we can do the work for you. If but we can create an in house team for you. And we can manage that. And we can transition that and we can actually make that happen, which is a COVID, sort of COVID started doing that. And as you say, it is just like real estate, it's like, where are where are we on the pen? And, and everyone's thinking, I think that, you know, it feels that I mean, in house is always going to be the big competition, you know, I mean, someone's gonna be sitting back going: Um, so I could buy you as an agency. Or I could just buy people to do this stuff. So right, so what what value do you add as an agency? Because, you know, why can I just get a get, get some creative in for a couple of days to do kind of the big, the big strategic stuff. And then I can get some guys and girls to come in and do that stuff, or I could use freelancers, but it challenges the whole value of, of the agency. And I think that for too long agencies who've been: Oh, you're buying us for our brain power, you're buying us through our brain power, blah, blah, blah, blah, blah. But actually, the brain power isn't necessarily, you know, more than 20% of the job. A lot of it is just the workhorse, execution, execution piece of it. So it's almost obvious that in house becomes more and more attractive, how are you seeing the in house playing out? The people are taking the whole piece in house? Or they're just taking the the execution piece in house? What are you saying?
Corina Ludwig 22:11
Yeah, there's usually a shift between strategy and implementation, right? So I think there's, there's companies that are still relying on an external agency for the strategy, like, what what is the direction, what is the key message and that that has to be right. And sometimes, when you're in the agency, or in that in house, it's like, it's like being in a wine bottle, right, you can't see the label on the outside, you can see you can't really see it, right. So they're relying on an agency to kind of give them a fresh perspective or fresh view, we did the same thing, we went through rebrand. And instead of using our internal agency, we use an external, one of our clients and said, you know, we just, we need to look at this fresh. And then when it comes to implementation, that's where they're more comfortable going in house. So they might have a designer on their team, or they've got, you know, two or three creative people. And they're like, we can execute, we've got the vision, we've got the, you know, the strategy behind this. And really, these are all the marketing pieces, these are all marketing messages. And we can do that with a template. And, and that's very similar to us. So we've we've shifted between agency versus in house. And we see that again, we see that in a lot of our clients, the larger clients tend to be able to do it all in house, the smaller ones, you know, they're still relying on someone else for the strategy part of it, and then doing the implementation themselves. And that's just, you know, the factor of how large the agency is.
Robert Craven 23:42
So I was about to interrupt, but I'm gonna wait for your next five, if, if you can get up to 10. I'm sure. Yeah, it was the next time see whether that answers my question, which I'm thinking. So what are the next five?
Corina Ludwig 23:54
So the next five, the discipline expert in this talks a little bit about the niches is losing ground. So now, because there's so much availability of all those freelancers, we're finding that people are becoming more hybrid in terms of their skill set. So I think this will shift back just like the niche, but the people's themselves need to be multifaceted. So the roles are evolving, people are looking to hire you know, one person to do multiple roles and get the most value out of that. And so you really need to be able to wear multiple hats to be successful. And competition is tougher than ever because I can't just look in my local geography now. I actually can look and hire from anywhere. So you can't be as focused as you used to be because those again, those GIOS have dropped so the discipline expert is losing ground. The next one is advertising and marketing channels have definitely exploded. And what we're seeing is there's so many channels now for the consumer, I think COVID has helped with those lines, the home life versus the work life has blurred, you're not going out and seeing billboards and going through your daily commute unnecessarily. So you're getting bombarded and other things. And I think, you know, that's, that's a for a client, that's like an advertising dream. But it's also a nightmare at the same time, because you have to cover all of those disciplines and all of those channels and hit them from wherever you can. And they're not commuting. So there's not as many physical places of advertising that there used to be. So that ends the pricing has definitely increased. And we've seen that for sure. In terms of advertising spend, you know, what used to cost, let's say 100 pounds is now triple or quadruple as much as it used to be. So that's a big one that we're seeing. And then, you know, print, I know, this is the digital audience group, but print advertising, time tracking, project management, you know, people look at those and go, Well, time sheets are dead, you know, print is dead, I don't think any of those things will ever die, I think they all have those ebbs and flows just like a real estate or buyers market, there's going to be times when you see an influx of those and a time when they sort of dissipate the print market shirt. It's it's had a tough go in the last couple years. But we're seeing some of that come back, because that's one of those channels that people are really just like seeing people in person, they want to have that tactile piece in their hands. So we're seeing some of that come back. The other big top trend that we're seeing is obviously people have had to increase their billable hours. And so what, you know, the successful agencies were seeing at least 65% of their hours are billable, more. And real focus has been put on that in the last couple of years to stay financially viable. So you know, 40%, or the average, under average, if you're getting up over 65% again, it depends on your discipline depends on your team size. But that all comes back to you know, tracking time billing out properly tracking for everything that you do. And we're seeing that people are being creative. They're now tracking for travel time, right before it was just part of their normal workday. They're like: Yep, I'm going to a client meeting, they wouldn't necessarily track for the commute that now they can save that time if they do it on Zoom. So now if they're going out and actually meeting with a client, they're charging for that time, and they're more apt to charge for it before they thought that was just something that they shouldn't really charge for, because it was part of it. And then the last two that I have is timesheets definitely are still important. And you know, our company is all about timesheets, and project management. But how timesheets are used has definitely changed, we're seeing more value based pricing, less retainers, just in terms of over servicing clients, and agencies still should track their time, but really be billing on value based, so not how many hours it took you. But what is the true value of that work and using the timesheets as, you know, a basis point for that. So that that can inform kind of how you bill your clients. And then the last one that I'll share is really, it's still the four it's like the four P's and in advertising, I call it the four M's in in the advertising world, it's mindset, right? So where's your mindset, and that's sort of talked a little bit more about how to increase efficiency and profitability, but your mindset in terms of business owner, where you're at where you're going, your market, who are you focused on what's your niche, your message, how you're getting your message out about what you do, and make what makes you unique from other agencies in the same industry or the same playing field. And then finally, it's money is always a huge factor, of course, you know, tracking your KPIs and getting the most value out of the clients that you have and how to bill more, which is always the challenging one, but definitely crucial.
Robert Craven 28:59
Oh, I like that. I like that. Yeah, it's um, it's a fascinating list. So the so it all kind of linked lots of links in to, to the, to the kind of the talent crisis in a way that that you know, that the talent crisis is there because of the increase in demand for digital work, and marketing work, especially in COVID. The talent crisis is there because there's been because of the great resignation, the sudden, sudden realisation Hey, actually, it's quite nice staying at home or it's quite nice being in the countryside, or do I really need to work five days a week? Talent crisis has come because there's a finite number of people out there able to do the job, the talent crisis to come because I mean, your 15% of devs are in Ukraine, the 15% of of developers have just vanished off the face of the earth for the time being. That talent crisis is partly about, largely about supply and demand. But it's it's it's also, it was also it was also waiting to happen. It was a bomb waiting waiting to go off, we knew it was going to happen. We knew we weren't training enough people we knew we knew we knew we knew. And then boom, it's happened. And now we hear bonkers numbers. So really interesting. Your your notion that the people need to be less focused on their discipline and being more on multi discipline? That's, that's really, really interesting. And is that? Is that something you see, right, the way through an agency that everyone needs to become more multifaceted, multi talented, multi focused? Or is it or is it more at the lower level? What's hard? How you seeing that rolling out?
Corina Ludwig 30:52
Yeah, more of the implementation phases, right. So the creative side needs to be able to be, you know, not just, hey, I can do digital work, but I can do digital work. And I can do illustration work, and I can, you know, adapt my style to fit with this client. Otherwise, they'll go and hire a freelancer that can specifically do that. So I think in the more senior roles, whether, you know, it's the obviously the person running the agency, or the creative director, that's a bit more solid, but I think you know, where you're looking at the talent itself, at the end of the day, who's going to actually create the design work? That's where you've got a lot of options as the agency owner, right? Because you can go out and hire a freelancer and so that all ties in together? That's what I'd say for that, for the creative type.
Robert Craven 31:45
Come together, come together. And then we've got and then you know, it's, it's the list is great. Yeah, the marketing channels have changed. I think that that has meant that the price of advertising has gone up, that meant that we've had to work much harder in order to deliver, you know, because because the price of every, every, every type of advertising has gone up. And I think it's interesting you say about about print, I get, no, I totally get about meetings having come back, and meetings are 10 times better than they were before and 10 times more effective. Because it's like: Oh, my god, we're back. We're talking to people, you're real. That's fantastic. See, you're all of you, you know, it's nice to see all of you. I know, I just show you that. It is it is the whole thing. And I get to see the inflection and you're not on Facebook while you're talking to me. And you're not bla bla bla bla bla, bla, bla bla, so totally together, print.
Corina Ludwig 32:42
I have a true love for print.
Robert Craven 32:45
I hate reading anything but print, and I have a great deal. And there are several agencies we work with actually deliver create, although they're digital agencies, they create print brochures and print magazines, because we all know, how great is to actually feel paper and allows you to smell printed material. But if so, is the death of the print world greatly exaggerated?
Corina Ludwig 33:10
Well, I mean, I think the form of it might be right, so that coffee table book, the beautiful for the ad agency or for the designer, those those books, I think will never disappear. From an advertising point of view in terms of getting your message out. Think about how many emails you get a day, you know, hundreds, think about how many ads you're bombarded with them, whatever you're looking at on social media online, then think about how many letters or advertising pieces do I actually get in my mailbox. Now, maybe it's to your home, because they've now got your home address. Because you've you know, you're ordering stuff online. And so the advertising that I get physically, I'm going to notice that over the hundreds of emails that I get. So FunctionFox, we've actually done home advertising where we're actually doing mail loads, and the cost of it, you know, is significantly now cheaper than the advertising it used to be reversed. You know, you'd be like, we're not going to spend that to mail all of those clients. But now that message stands out so much greater than all of the advertising that you're seeing online with banner ads, or you know, whatever it may be. So that I think you know, is going to I predict that that's going to come back more I'd like to see it come back more and how that shift.
Robert Craven 34:36
I've always been a great fan of lumpy mail. You know, I think just it's like, we're so blurred by this. Something comes in in the shape of a wine bottle, possibly a wine bottle and possibly a wine bottle. Oh my God and you start you drop everything. Someone has its hat. It's got a handwritten address on it as well. It's not come from Amazon. It's actually a real person that sent this to me what nursed inside it. So lumpy mail handwritten invitations, you know, I mean, I know, it's, I think it's the concept of print and paper, I think, I think still continues. I, I'd like to get on to is your piece around increasing efficiency and profitability when running an agency and I suspect your last thing about visibility and utilisation going up. And I think it's really interesting that people are now charging for travel. I mean, that's great. The use of timesheets is battle we have with people endlessly about, you have to track time so that you know, what projects are profitable, which products aren't profitable, and who is writing proposals which are profitable, who isn't? And so that you can actually reward your people who are performing well, you cannot do this. If you're just saying: Oh, just get it done by the end of the week. And also your I like, you're like your forearms, which are mindset markets, messaging, and money. So I'm suspecting that that, because this is the question that kind of people want to know, how do I increase efficiency and profitability running my business? How do I do it? So what's your what's your take on how people can do that?
Corina Ludwig 36:11
I'll give you my top 10 as well. I'll be succinct. You know, mindset, message, market money, those are all our good ones. But over the years, not only how we run our business for 22 years, but what we've seen in agencies that reflect that that have been true, key players in the industry that have outlasted anyone else, the ones that are really on the forefront that are leading, not the ones that are just starting out, or things that we would have wanted to know, when we were just starting out, like, what's what's really important? Where do I spend my time because it can't be everywhere. So leader, you know, the key things are being clear on your on your vision, your mission, your values, your strategy, and how you're gonna get there, and what will set you apart. Now, that seems really easy and simple, but it's not right, because there's so many directions that you can take. And whether you use Rockefeller habits, whether you use you know, there's lots of different formulas on how you can do that. But really mapping out and say: Okay, here's where we are now, here's where we want to be in three years, here's where we want to be in five years. What's that? Northstar? What's your guiding principle? What's that thing that is going to keep not only you engaged, but hold of your team members engaged? What's the purpose, there's so many agencies and our agency is different, because we have a dog on our website, that's not different. That's like everybody else. It has to be something more, more than just, you know, we focus on the tourism industry, or we focus on this type of industry, it really has to be different. And it has to be clear, and it has to be clear to everyone on your team. And that is what will set you apart. So number one, that's by far I think the the number one of you know, so for our company, we're focused on advertising design, creative clients, of course, we take others as well. But really, how we're getting there. What's our one year goal three year goal, five year goals? What's how many clients are we going to have? What kind of industries are they in? What are their disciplines, you know, what's their employees size, and that's very well communicated to all of our team members. And so that's where I would spend your time. If nowhere else, that would be the primary one. All right, number two really quick here be niche focused. So this counteracts what I said before. But I still think if you can find a really good niche, a small niche, and you can own that market to find your market. Don't try to be everything for everyone. I think during COVID, some people had to blur those lines, but really bring that back, we've been niche focus, we said you don't will expand when we dry up in that market. We've been doing it for 22 years, and I can say the best thing that we've done has been niche focused. We're three hire people better than you. That's sometimes really hard, hire slow and fire really fast. So people will make or break your business. They're your asset. It's you know, the creative work, of course, stands alone, but it's the people that actually do that at the end of the day. You can have one person that can make a huge destructive difference, or a huge impact in terms of how you grow your business. So choosing the right people for your team is definitely the key. One that I probably when I started I wish I would have done more is saying Yes. More often then: Well, I don't know I don't we don't know how to do that. So we'll say no for now. And then we'll figure it out and say yes, and then figure out how to do that later. Number five, know your KPIs. So set short and long term goals ties back into the vision, vision and mission and values and then stick to them, map them out on your journey and really, at the end of the day money is is the most thing. It's the most important thing in terms of a driver of your business. Of course, there's culture and everything else that comes along with that. But if there's no money, there's there's no business, right? It's just like people, you have to have people, you have to have money, you have to have culture, you have to have great work all of those things. But the KPIs know, your KPIs knows what knows what is important there, and follow those so that you can see that trend prior to you going: Oh, you know what, we have nothing left in the, in the bank for payroll next month. I'll stop there. Do you want to stop there and see? Or do you want to hear the the other five have gone?
Robert Craven 40:38
Well, I want to hear the rest. Because you're on a roll. I just keep agreeing with you.
Corina Ludwig 40:44
Focus on what you're doing, not what everyone else is doing. You know, there's the people that are like: Oh, well, our competitors are doing this, and our competitors are doing this. So for example, our competitors are spending millions on advertising per month, we're not we're doing other things, we're doing the things that are different. We might do print advertising, or email, blast to a different set of groups. So do something different focus on what you're doing, not what everyone else is doing when we're using everyone else is surround yourself with good mentors and good team members. And that goes back to the people. But you know, you can't be everything for everyone in terms of yourself. Admit your failures and shortcomings know what they are, and then get people that are better than you that you can work with, and lead you to the areas that you need to. Next one focus on people and culture. So if you focus on your people, if you focus on your team, and make sure your team is happy that you've got the right people on the bus, they will take care of your clients and happy people will in turn make happy clients, we spend a tonne of time at work every day, or at home these days, but you know, we're still focused on work, if people are having fun, that's going to naturally make the culture better. And naturally, the clients are going to be happy at the end of the day. So focus on people and culture. And then the last one, really just be yourself right as an as an advertising agency owner, if you're owning a digital agency, or print agency, or whatever it may be, there's things that you just don't know. And that's okay, just be authentic, be true to your yourself, be true to your company, your clients and your team, there's things that I'll say to our team and say, you know, like, I don't know that but someone else does. We're, we're you know, we're 20 people or 30 people or whatever it may be in terms of your group, we're stronger as a group, so figure it out together, and don't feel that you have to do everything on your own. And then the best one that I love and and definitely you should think about if you haven't recently is raise your prices, you know, keep looking at your work and go, You know what we can charge more, there's always clients that will pay more. And, you know, there's always hesitation about raising your prices. So you don't know my industry or you don't know my market. I look at that and say you know what, raise your prices, because there's always another market that's willing to pay for that. And the value that you provide, is going to be perceived as higher value if you raise your prices. So if you're not getting work, you think, oh, I should lower my prices. So I get more work, it's actually the opposite. We want to raise your prices so that you become a higher commodity for that group. Why is this group charging so much, they must be that much better. And you are. So don't hesitate to raise your prices. If you feel that that's a tough one for you do it in small things, 2%-5% ddd a little bit more add a little bit more than when you see clients not baulking at your prices, you'll be more apt to tend to increase that play around with that. Do it with clients that you don't want to do the workforce. So if it's outside of your niche, say, yep, we can do that. But the price is going to be this much more. So that's where my last recommend is in terms of how to increase efficiency, profitability and running your agency. Of course, there's lots of other things, but those are the top 10 In my opinion.
Robert Craven 44:11
I love that lift. I was taking notes the whole way through. And, you know, my name is Mr. Robert put your prices up Craven. So, the my clients know, I'm going to say it. Don't I'm going to say this. I know we need to do we need to put up our prices. It's like, well, if you know what I'm going to say you didn't need to hire me. It's tough and it's tough. Oh, absolutely. It's really, really tough. And I think everyone's so frightened of people saying no. And we're very vain. You know, actually, unless people are saying no. The price isn't high enough. And so a couple of things. One. If you don't value yourself, your staff won't and your clients will Secondly, people don't know your price, because they're comparing cheese and eggs. You know, it's like every, every agency proposition, whether it's from the creative side, or even even right the way on PPC, you're not buying the same thing. So the prices are actually really hard to, to evaluate. And that's the second thing. I think the third thing is if you put your prices down, all you do is you attract people who buy on price, and people who buy on price tend to be the ones who are disloyal, they tend to be the ones who phoney on a Saturday and say it's not good enough. Whereas if you put prices up, you find that people who get the value you've been offering go up surprising and put your prices up before you're incredibly good value. And, and then there's some maths behind it, which is, if your business is gross profit is, is 30%. So you're buying for $7. And selling for 10. You can put your prices up by 10% you can afford to lose 25% of your business business that you lose will be that pond life and scum who are disloyal and or you can put your prices down by 10%. Because everyone says you don't understand what it's like running a business in Missouri is different from everywhere else or or Botswana, it doesn't really matter. And if you've got to put my prices down to compete, if you put your price is down by 10% with that same logic of you're buying for seven selling for 10. You need to sell 50% more staff just to stay in the same position. So you are working Monday, Tuesday, Wednesday, Thursday, Friday, you're not going to work Saturday, Sunday and Monday morning just stay in the same place. If it doesn't make sense for most agencies not to put the price. That's my my position. Sorry. I love that list. It's I'm wondering where to start because there are so many there are so many ticks. I think the KPIs ones really interesting. I think people really struggle with with finding the right KPIs always find it really curious. So they say can I see what's another agency's KPIs are and he say, Yeah, but their KPIs are for their business strategy, and then niche with their people. So so there's not a benchmark set of KPIs, if you're, if you're about to sell the business, your KPI is going to be all about increasing profit. And if you're growing the business, it's going to be all about the number of clients and lifetime value of clients. So your KPIs, we're very interested to know how you how you saw this thing about how do I figure out what my KPIs are?
Corina Ludwig 47:47
Yeah. You know, I think this is this is a big topic, and I could spend a lot I have a full, you know, webinar full podcast on this. Maybe next time, yeah, maybe next time. So I'm gonna do something different. If on our website, there's a bunch of resources, and there's one specifically about billable efficiency, how to measure it, you know, what your, you basically put in your, where you're currently at and how many employees you have, how many clients you have, what your current revenue is. And it can tell you your billable efficiency, and where are the areas you can increase. So I would recommend that there's lots of resources, they're all free, there's hundreds of articles on our website, functionfox.com. And it will really help you as an agency, from where you are now what KPIs you should track and where you want to be, you know, in your long term vision and strategy. So five years from now, 10 years from now, you know, there's there's lots of acronyms, right, so there's the LTV, there's the CAC, there's the you know, the, all that all the acronyms don't really matter, the key, especially when you're starting your agency, is just a track for stuff. So that as you go along from one year, three year, five year, you can set those benchmarks and say, Okay, here's where we are now. So just know what they are, figure out all the things that we can track, anything that you track, will actually improve, because you're watching it. So you know, start with five, we put those on our website, so you can look at those, then add a few extras, look at a couple other ones, some are really hard to track. So you know, like CAC, for example, for our industries, like cost per acquisition. In marketing, you know, measuring all those different channels, well, someone's going to see your message in seven different places. So how do you measure which one they came from? Was it a referral? Or was it through this online podcast? Or was it through a banner ad? Maybe it was all of those, maybe they saw you at a trade show, and seven years later, 20 years later, and we've had that so how do you measure that? That's, that's pretty challenging. How much time do people spend on the phone, working with that client? Those sorts of things. So you can take a certain percentage of that your sales team, your service team, your creative team and and look at it that way. It really depends on your agency and what you want to track. So I would say just find what's most important for you. There's lots of options, like I said, and then track them. And then you'll see that those the things that you track will go up.
Robert Craven 50:19
Well, we're running out of time. So firstly, thanks for that dump of 20 whole things to think about to get our heads around, which is, which is loads. I guess. I guess my question to you is, and obviously that all the links are going to be left after the after the recording, so people can go and look and check the stuff out on the on the website, and your website. But I guess my question to you is, you know, all things are not equal. Yeah, there's 20 items. So you've gone through, you've gone through current trends, and how to increase efficiency and profitability. If there was only one or two things that you could employ someone to do, you know, I'm also a great fan of a simplicity Bible. So one thing I need to do this week was a one thing I need to do this month. Are there any one or two things that you that you would say, if if we're going to nail nail the flag somewhere, we're going to know that there which which ones do you think those would be for you?
Corina Ludwig 51:25
Robert Craven 51:29
About a perfect place to end that's absolutely lovely, stay focused as. That's two words. It's really simple. And I think I think that's, that's profound, profound, because I think we just go about so many things. Corina, it's been an absolute pleasure talking to you and, and hearing the insights from dealing with 1000s of agencies. And it's been great to, certainly on the on the advice were ever so close, which is fantastic. And the trends are just fascinating and just left for me to say it's been an absolute pleasure talking with you, thank you so much for your time.
Corina Ludwig 52:17
Likewise, really appreciate it and enjoy speaking with you as well.
Robert Craven 52:22
Thank you very much. Okay, bye