Hannah Hood, Virtual CFO at Summit Virtual CFO by Anders, joins Jamie as she shares her experiences from recent agency events, including the Build Better Agency Summit in Denver and Mirren Live in New York, where Jamie also attended as a speaker. With her finger on the pulse of the industry, Hannah has recently observed from these events a positive sentiment and a hopeful outlook for the rest of 2024. Among digital marketing trends, Hannah notes clients seeking specialized services and emphasizes the importance of agencies marketing their expertise effectively. The conversation dives into the need for value-based pricing, building trust with clients, and the significance of profitability and pricing strategies.
“Clients don’t want to ask us for new ideas; they want us to come to them with new ideas.” Hannah Hood
The finer details of this episode:
● Shortening of the sales cycle indicating a positive shift in the industry
● Trend of clients seeking specialized services from agencies
● Emphasis on the need for agencies to specialize and market their expertise effectively
● Importance of being proactive in presenting new ideas to clients and pricing services based on value
● Significance of building trust with clients and maintaining long-term relationships
● Communication of the value of agency services effectively
● Strategies for navigating the evolving landscape of the agency industry
Episode resources:
● Summit Virtual CFO by Anders website: https://www.summitcpa.net/
● Love our content? Sign up for our newsletter: https://www.summitcpa.net/summit-newsletter
● Digital Dollars and Cents: A Virtual CFO’s Playbook to help Digital Companies Create a Financial Roadmap to Success, is now an audio book! Download it here: https://vcfo.summitcpa.net/ddc
● https://www.linkedin.com/in/hannahchood/
Timestamps:
The welcome (00:00:00)
Introduction and purpose of the podcast episode.
Hannah's agency events (00:00:14)
Discussion about Hannah's experiences at agency events and their importance.
The Build Better Agency Summit (00:00:53)
Highlights from the Build Better Agency Summit and the value of attending such events.
Impact of COVID on the industry (00:01:52)
Discussion on the industry's recovery from the impact of COVID-19 and changes in client behavior.
Shift in client needs and agency specialization (00:05:22)
Insights into the evolving client needs and the importance of agency specialization.
Value-based pricing and client relationships (00:08:20)
Importance of value-based pricing, building client trust, and maintaining long-term relationships.
Pricing strategies and advice (00:12:22)
Insights into pricing strategies, price pressure, and the importance of building trust with clients.
Post-event reflection and team communication (00:16:10)
Recommendations for post-event reflection and team communication to share insights and implement learnings.
Denver Experience (00:17:55)
Discussion about the food, weather, and environment in Denver, and the impact of altitude on the speaker's health.
Effects of Altitude (00:18:30)
The speaker's experience with altitude sickness and the importance of drinking water at high altitudes.
Dryness and Humidity (00:18:54)
The impact of dryness and high altitude on the body, and the need to stay hydrated in such conditions.
Future Plans (00:19:43)
Plans to visit Denver again, and the possibility of meeting up with the hosts for dinner during the next visit.
Appreciation and Conclusion (00:20:00)
Thanking the guest for sharing information and experiences and expressing gratitude for the opportunity to participate in events.
Intro (00:00:00) - Welcome to the Creative Agency Success Show, the go to resource for agency owners looking to scale their business. Join us every week to stay ahead of the curve and position your agency for future success.
Jamie (00:00:14) - Hello everybody. Welcome to today's episode. I'm very excited to talk with Hannah, one of our awesome CFOs. So, Hannah Hood, we've actually talked her into traveling quite a bit the last couple of months. And so, I'm excited to talk with Hannah about some of her experiences at some agency events and what she's seeing and kind of the people she's talking to. So, that's going to just be a quick episode today to kind of, pick Hannah's brain on what's going on in the agency world. So welcome to the show, Hannah.
Hannah (00:00:38) - Thanks so much. Yeah, y'all really had to twist my arm to give me to travel. I actually love to travel. So Jamie came to me a few, like, maybe a week before an event that I was at last week was like, hey, can you go to Denver? And of course, like I had to say yes.
Hannah (00:00:53) - Like there was no other answer. It was, yes, of course I will go to Denver. So last week I was at the Build Better Agency summit, with the Agency Management Institute is who put on this summit. And it was incredible. It was really, really great. Like, I have pages and pages of notes in front of me of things that I learned while I was there. Because I think one thing that's super valuable about going to these events is what I get to learn and bring back to my clients, as well as just networking with people there. So it was a really great event.
Jamie (00:01:24) - Awesome. Yeah. And then what was it? Two weeks before that, we were in New York City together at the Mira, an event. So that's Mira and always puts on a really good event with a lot of people that are really close and talked to a lot of different people about different opinions of what's going on in the industry, and then there's a lot of really good content there as, as CPAs, some of the content we're like, oh, I'm not sure we know what they're even talking about here, but I think a lot of people get a lot out of the mirror and content, and I know we get a lot of talking to people.
Jamie (00:01:52) - So we have a little bit of a experience here that we want to share. So I'm going to I'm going to ask Hannah some questions. And then Hannah, obviously, you know, we can just have a back and forth about what we're seeing in the industry here. So, let's let's start with with last week. So the, the sense I'm getting from talking to a lot of agencies and just the kind of the conversations we're having right now is, is that we're hoping the second half of 2024 is going to be much better than the first half of 2024. And, you know, I think that's what kind of the sentiment was at Mira. And at least is that what they were talking about out there in Denver as well?
Hannah (00:02:22) - They were there was a session that I sat in on, which was the 2024 Agency Edge research session that just gave a bunch of statistics about pulling different agencies, different clients on what they were seeing and experiencing. And one of the things that was said in that session is that the sales cycle does seem to be shortening for this back half of 2024, which I think is good news.
Hannah (00:02:47) - Obviously, we've had conversations about the pipeline in general and just how that felt really extended in 2023. So it seems to be a shift in that starting to change in this back half of 2024.
Jamie (00:03:01) - No, that's that's really good news. You know, one of the things that we participated in at the at the Mira an event was a panel. so I was on a panel on the main stage, just kind of answering questions. And one of the, one of the pieces of advice I gave is I and I think I've said this a couple times in the past couple of weeks is, is I really feel like we're we were seeing a slow back from the, from the Covid days. And I know I hate keep bringing up Covid, but I feel like that, you know, what happened was, you know, everybody was freaked out that the, industry was going to die during Covid. And what actually happened was, it slowed down for a little bit. But then, our clients started getting up money, and then our clients clients started getting money.
Jamie (00:03:38) - And so all that money was out there flowing, and people were, were spending that money, both on their teams and increasing people's costs and increasing people's wages. And so that's kind of where some of that money went. And then that money was also spent on marketing. So companies were spending money on marketing and willing to spend a little more. So we saw a really good, probably last, probably good 18 month period there after Covid. And then that money started to dry up. And and then we're like, oh, wait, we're paying our people way more than we were. And this marketing, we're charging a lot more. So they started slowing down a little bit. So I think we kind of came out of a slowdown there that was probably almost 12 to 14 months there. So a full year maybe, if not, kind of seeing it now in the first quarter here. So I think that, that's the, what we saw. And so, just to hear that we're coming out of it is really good news.
Hannah (00:04:24) - And I think some of that is a shift in our, the buyer as well, in terms of they were talking about there's an increased acumen in marketing and the awareness and belief for that within agencies. So in terms of the buyers that are coming to us recognize the fact that they need our clients in order to perform the work that they need to perform. For a lot of these people, in terms of the businesses they are maintaining and internal staff of a marketing staff or whatever that may look like, but it's looking like it is a smaller staff. So they're going to be reaching out to different agencies for specialization, which speaks to the need to specialize. If you're not already diving into what that looks like for you in marketing yourself as that for your agency, because that is going to be a lot of what clients are looking for. Because they're going to like I said, they're going to maintain that core staff internally, but then they're going to lean on other agencies for those specializations in the projects that they have.
Jamie (00:05:22) - Interesting. So there's going to be less of the full scope projects where you're coming in and designing a full marketing program and implementing it and doing every step along the way. So now it's going to be okay. We've already got this marketing plan that we want. Can you help us with this? One aspect of it is that kind of the the advice they gave and what is some of that specialization that they were leaning on?
Hannah (00:05:41) - Yeah. So, that is absolutely what they were communicating in this. They were saying that people want to work with specific areas of marketing. So, whether that looks like, strategy specifically, it looks like development specifically tactics specifically like it was segmented among those things, but they were going to have more of an idea of what they were looking for whenever they came to people, for doing their work. But they did also say, I wrote this down because I just felt like this was incredibly important. Is that clients seem to not want to have to ask for the new ideas. They want us to be the, they want us to come to them with new ideas, not have to constantly ask and pull that out of it.
Hannah (00:06:25) - So for agencies to be more proactive with their clients, to present them with ideas, if they see a need, then present that to the client, that they're open to hearing about it, versus I think, kind of like what you were saying about the money freely flowing and Covid times. It was just like, yes, like, let's do this. Like there was plenty of work to go around. It wasn't like they were needing to go in and diagnose any of these things. because there was just, you know, easy decisions that were made and it was just a much more free flowing market than it seems to be now. But people are actively seeking to lean on agencies as the experts in their field, to be able to present them with ideas and what they need for their businesses.
Jamie (00:07:05) - I think that plays really well into something that we recommend and that we actually try to do internally. It's that using that knowledge base or being the experts as a marketing strategy, right? So like when when someone comes to someone that they expect to be an expert, they expect them to know all the steps.
Jamie (00:07:19) - They expect them to come with ideas and not be reactive. They need to be proactive. So I think that's what, what we're hearing here. So like, I think if this is something you aren't doing, if you feel like you're more of a generalist or if you feel like, you know, your clients are kind of all over the board, now might be the time to kind of, you know, it doesn't need to be your whole marketing strategy, but what are the two or 3 or 4 things you're really good at? And make sure that you can sell those things and talk about those things and be able to bring ideas to companies, because what they're coming to, it sounds like, as they're coming out with saying, hey, we need this one segment being done by you, what can you do for us? And if you come in with the best idea, you're going to win. So I think that, they're the nice thing about specialization is there also might be some higher level costs there as well.
Jamie (00:07:58) - Right. So you might be able to get more, more higher bill rate for coming in with a specialized service and saying, hey, we're really good at X. And because of really good at it, we can charge this and companies are going to obviously hire someone that's really good at something if if you can sell it correctly. So I think that's kind of the the strategy I would take if I was, hearing what Hannah saying right now is like, okay, let's make sure we know what our come to market is on those areas.
Hannah (00:08:20) - another statement I wrote down was be a doctor, not the wait staff that somebody said. And I was like, ooh, I like that. That's a that's really, really good in terms of how we, how we approach our clients and their problems. But even like you said, with the value piece, that was another aspect of the conversation, is that they are really encouraging people to to shy away from TNM work and price their work based on the value that they can provide for whatever that piece of work might be.
Hannah (00:08:46) - And I know that was something that we heard at Marin as well. It's just really leaning into making sure that you are communicating your value effectively to the client. Obviously reputation matters. Relationship matters. Another piece that we're talking about is that, clients are looking for more long term relationships, so they really want to lean into that and get to know you as their partner, not just another vendor. but in terms of the value that you're communicating to them, making sure you're pricing as such as well. And the analogy that was given is that, you know, it may take you five minutes to develop a logo for somebody or a landing page for whatever it is. Are you only going to charge for five minutes worth of your team's work like that? Does that just doesn't make sense. Just because you know how to use your tools effectively, or that you're just that creative, doesn't mean that you should downplay the value in whatever you are delivering to the client.
Jamie (00:09:34) - Yeah, and it's funny at mirroring, like I kind of looked at the agenda when I first got there, and there's all these hidden words for value based pricing like product ization is one of the people always talk about prioritize what you're doing and say, okay, basically that's just value based pricing.
Jamie (00:09:47) - You know, that's the sort of a lot of presentations that were mirroring about was like, okay, how can we make sure we can get the top dollar for something about based on value? So I think, you know, I love the doctor versus the waitstaff. I think that's that's perfect. And I think the, you know, going back to what was said before, you know, Adam always talks about being a doctor. Like, you know, if you're if you're going into your doctor's office and they're like, I think this is what's wrong with your knee, but maybe we're not going to do that. It's like you want a doctor that's confident and knows what they're doing. And so I think that, Being able to charge a little bit more. But going back to that, okay, we're going to bring value. We know what we're doing, we know how to do it and we know how to do it well. And that's that's definitely a really good analogy there.
Hannah (00:10:23) - Yeah. There were so many great ones that I ended up writing down.
Hannah (00:10:27) - Just even like one liners of things that people said that I was like, oh man, that is really, really good. Like one is and obviously we talk about this often in the work that we do. I always say that revenues of vanity metric. but someone made the statement that revenues for vanity profit is for sanity. And I was like, that's good. I'm gonna use that. Because obviously that is directly correlates to the work that we do. And the message that we try to tell our clients as well is that revenue is great if you want to hit $7 million in revenue. But what does that profit look like whenever you bring it all the way down to the bottom line? Because you can have $7 million in revenue but have a net loss of $1 million, and then that tells you a totally different story. So you've got to be looking at both. So then what.
Jamie (00:11:07) - Is cash for? So if revenue is vanity and profit is sanity, what would cash be. That's always the third one.
Hannah (00:11:14) - You're able to sleep at night.
Jamie (00:11:16) - That's sanity.
Jamie (00:11:16) - Right? That's what I was thinking.
Hannah (00:11:17) - Yeah.
Jamie (00:11:18) - That's to me is a little more sanity than profit. But, yeah, profit is definitely, nice to have. Usually leads to cash. So.
Hannah (00:11:24) - Yeah.
Hannah (00:11:24) - Yeah. Exactly. Well, and speaking of, just like the price pays, we listen to another speaker, Casey Brown. She was talking about her session was from panic to power how to boost pricing for profit. but she was just talking about price pressure and price sensitivity around the client space and how price pressure is actually a buying signal because clients aren't going to press back on you for price if they're not truly considering you as a serious contender for the work that that you are offering up to them. And I thought that was really an interesting concept, because I think a lot of times, especially whenever the pipeline is really slow and you're having a hard time closing that work, it can you can feel that pressure to want to bend to whatever the client's need is and whatever they are trying to press you for, whether that be a discount on the work or shortened timeline or whatever that is, when in reality they're really highly considering you to do the work at the amount that you are selling it for.
Hannah (00:12:22) - And again, don't don't undermine your value in that because it's going to again, flow right down to that bottom line, because you're not going to not pay your team less to deliver the work at the end of the day.
Jamie (00:12:33) - No, definitely. I think that's a that's a really good point. I think about like the day to day life, like if I'm if I'm starting negotiations, it means at least someone interested in the product or I'm interested when I'm buying. Right. Like if I'm not injured, I'm just going to walk away. Right? Like if I'm, you know, if it's like, okay, I don't I don't need this. So at least shows you that they're interested and they're interested in you. So yeah, I think that, that's a, that's a really good that's a really good tip. So what other what other gems you have over there.
Hannah (00:12:57) - Oh let's see, I'm reading my little, handy dandy notebook over here is.
Jamie (00:13:02) - Small writing a lot of stuff on there.
Hannah (00:13:04) - I did.
Hannah (00:13:04) - I'm telling you, I have pages and pages of notes. on the price pressure I have. Price sensitivity might indicate that they don't trust you yet, so building trust with the clients again is going to be key in developing the relationship in order to get them to buy from you that know like and trust factor, but then also maintain that long term relationship that we are seeing people want to lean into and clients lean into. People just don't want a like one off project from people. They want you to be like you're their go to person for whatever it is that you specifically specialize in. So just making sure that you, as an agency are marketing that to your clients effectively is going to be key. again, she she echoed the same thing. There's there's value rooted in deep expertise and don't underprice because of that, it was another statement that she made.
Jamie (00:13:53) - Yeah, yeah. Pricing is is so key. And it's so important to what we do and it's so important to the pipeline. And sometimes it feels like such a mystery.
Jamie (00:13:59) - But again, I think part of pricing is, is you never really know until you do it. Right. And I think that's the hard part is it's like, okay, we're going to increase our prices. You increase your prices. And how many how many sales calls do you have to go through? How many people do you have to talk to before you realize it's too high or it's too low? Right. It takes at least a handful. I mean, I would say by at least 10 to 20 sales where you go through it. Okay. Now we know whether we've adjusted enough or having adjusted enough. And so that's the hard part about adjusting your price. But again, it's you're never going to know unless you try which is which is which is the key there. And I think that, you know, you also can kind of look at the market and look at what, you know, your profitability because ultimately you have to be profitable, right? So, you don't want to ever price to the point where you're not profitable.
Jamie (00:14:36) - So there's just a lot that goes into pricing. And it sounds like that was a pretty big topic there in Denver.
Hannah (00:14:41) - Yeah. It was there were multiple sessions around it. Multiple speakers spoke to the audience about it, and really gave some great advice. So obviously, for any of our agency clients that are listening to this, I highly suggest that you get plugged in to one of these conferences and spend the time to go and just learn and be around people that are maybe a step ahead of you and just learning from them and what's working for them. And, and one thing was really great is just every table I sat down at for lunch or whatever it is, I had one conversation with a guy who was he was like, you know, I. Came here just thinking, you know, hey, I'd get as much as I can out of it. Didn't really know what to expect from the people in terms of what I was going to be able to learn from, from just my peers.
Hannah (00:15:23) - He's like, but it's really been comforting to know that everybody's going through the same stuff. Like everybody is struggling with some of the same things. He's like, I'm not on an island over here. Like I really am. going through a lot of the same things, and it's been really comforting to know that I'm not alone in that, but also really great to be able to, like, brainstorm and just talk about what's working for people and what's not working for people and how we can how we can get through this together.
Jamie (00:15:47) - Yeah. And I think that what we're doing right now is something we do after an event every time. so what we have, Hannah will come in on Friday, to our, CFO meeting, and we'll let her talk for 15, 20 minutes and kind of relay some of this news to the rest of the team. So, I would definitely recommend you don't need to send your entire team to an event, but getting 1 or 2 people there and having them take good notes and come back and do exactly this is super beneficial.
Jamie (00:16:10) - Obviously it's beneficial for us as CFOs, but I also think it's beneficial for your team, because you know, one person could hear something and be like, oh, I didn't. When Hannah said that, I thought about this and this is how I can adjust our pricing and then it'll help your company and it'll just flow through it. So, I definitely would recommend doing a, a comeback conversation where whoever goes to these events come back and nothing formal, but just to come back and reports and look at their notes and talks back, talks to the whole team about what they're hearing out there because it is really important. And it's, it's important the entire team knows that because the last thing you want, especially right now, we already talked about, start off this call, last thing we want is your team feeling like it's a slowdown when everybody else feels like it's a recovery. You know, you don't want your team, being six months old on their information, you know. So it's really important that you have those follow up conversations.
Hannah (00:16:55) - and just be prepared. You're going to want to come back and implement 10,000 things at one time. So, it may be hard to communicate that priority list to your team. In fact, we met somebody at Myron who he said last year, he came back from Myron with all these great ideas and to his team, and he was just on fire and ready to implement them. And his team was like, whoa, whoa, whoa, like, calm down, sir, we need to digest what you what you just took in. And so, he said, this year at Myron, he brought 2 or 3 people on his team with him. So that way he was like, it won't just be me coming back from this conference saying all these great things that we need to implement. But it really does just reignite that fire, refuel you, just give you that motivation to head especially into this back half of the year. Just really great timing from that perspective and motivation because 2023 was tough. 2023 was top for a lot of people.
Hannah (00:17:47) - So just to re-energize and refuel and just be surrounded by like minded people is, I think, hard for me to convey the value in that as well.
Jamie (00:17:55) - I agree. All right. So now the most important question is how did how did Denver treat you? Was the food good? Was the weather good? Was, the environment all right?
Hannah (00:18:03) - The food was good. The food was good. The weather was actually really good while.
Hannah (00:18:06) - We were there. for our listeners that don't know, I'm from Tupelo, Mississippi. A lot of people can tell them from the South the second that I opened my mouth. So y'all may not be surprised by that in the least. It was much less humid in Denver. Shocker, right? But it was great. But I will say I had a client that's in Portland, Oregon who had told me before I went out there, she was like, drink water, Hanna, drink lots of water. The altitude will get you if you don't drink lots of water.
Hannah (00:18:30) - So leading up to it, I drink lots of water. First day, second day I drink lots of water. Third day I did not drink.
Hannah (00:18:39) - Lots of water and so I was feeling rough. By the time that I'd gotten to the airport that night, I got really carsick in the car, just even getting there. So, third day did not treat me as great. But I learned my lesson, and now I know it's.
Jamie (00:18:54) - A combination of the altitude and the dryness. Right. Like there's this. Yes, it's so dry here. And we have such high altitude that. Yeah. I'm listeners, I think everybody knows I'm in Colorado Springs, which I've been to Denver several times and lived in Denver. So yeah, it's the same. But yeah, you have to drink lots of water and no humidity, which is, which is great, but you do definitely get to get drier quicker.
Hannah (00:19:14) - Yes, exactly. And so, if any of our listeners have any, recommendations for how to combat that other than just water, anything I should know and do, like, please send it my way.
Jamie (00:19:24) - That’s the reason I'm always. I'm always drinking, you know, I always have water.
Hannah (00:19:26) - I know, I know.
Hannah (00:19:27) - It's, I don't I only struggle with water, but in the South, I think I'm a little bit spoiled by the fact that it is a little bit more humid here. It's not as big of a deal, for me here, but lesson learned. I'm going back to Denver again next year for this because it was so great. So now I know what to expect.
Jamie (00:19:43) - Well, next time hopefully I'm in town so I can come visit you guys. I was, I was gone for the week, so that's why I wasn't able to attend. But, next time you guys come in town, I can have you down. Have you guys over for dinner and stuff. So, Jody's. Jody's been to my house, but you have not. So next time exactly. Hang out with us. So.
Hannah (00:19:58) - Yeah, absolutely. We'll do it.
Jamie (00:20:00) - Cool. Well, thanks for coming in and bringing all that information.
Jamie (00:20:02) - I know I learned some things that I'm excited to talk to my clients about, but I appreciate you coming in and I'm glad you were able to start, start doing some of these events with, with us because I know they've fun to have you there. They're doing a great job at them.
Hannah (00:20:14) - Awesome. Thanks so much.
Jamie (00:20:16) - All right. Thank you.
Outro (00:20:17) - Enjoy this podcast. Visit our website Summit Connect to get more tips and strategy for achieving business success. We're here to be a resource in this ever-changing industry.