Rachel Klaver from Identify Marketing Shares Insights into Marketing Agencies on Agency Connect

More info:

Rachel Klaver from Identify Marketing joined us at the Agency Connect podcast.

Thank you Rachel from Identify Marketing for your candid and honest story at another Agency Connect podcast.

Learn More About Managing Subscriptions

Get your digital subscriptions and services under control to take your agency to the next level. AppBind is a subscription manager for digital agencies. THE Subscription Manager App if you will, where you can set up your clients’ software and ads without getting suck in the middle of their billing, worry about credit card processing fees, or losing sensitive credit card information.

Join Us At Cloud Software Association for Cocktails

The Cloud Software Association is the network of partnership leaders building the market for SaaS and cloud software distribution.

Join us for AgencyCocktails.com at INBOUND.

Questions or Want to Be a Guest?

If you’re interested in being a guest on our show, or know of someone who would make a great guest, please let us know! Have any questions about the show or want to know more, please contact us by emailing hello@appbind.com.

#podcast #marketingagency #digitalmarketing

Subscribe to tune in for our next episodes
Listen on Apple Podcasts
Listen on Spotify Podcasts
Listen on YouTube

00:00:05.040 –> 00:00:09.760
welcome back for another agency connect i’m senior
shot president of cloud software association and

00:00:09.760 –> 00:00:14.720
ceo of appbind i’m here with paul higgins one of
the founders of scale my empire one of the great

00:00:14.720 –> 00:00:19.200
success stories of digital consulting that i’ve
ever met because he sold this company for quite

00:00:19.200 –> 00:00:24.640
a large multiple all because he figured out how
to manage digital so you can get the agency under

00:00:24.640 –> 00:00:29.440
control which is the whole point of this podcast
so thank you so much paul for being here all the

00:00:29.440 –> 00:00:33.840
way from australia we can trade weather i’m in
canada that’d be great yeah yeah now awesome to

00:00:33.840 –> 00:00:37.440
be here so tell us a little bit about your history
because you’re doing more than what i just said

00:00:37.440 –> 00:00:41.840
i mean you now have uh your mentoring and
the and the cloud consultants collective

00:00:41.840 –> 00:00:46.960
now tell us about that and then we get into i
mean how you’ve got your experience to do it

00:00:46.960 –> 00:00:52.240
yeah so my short history is uh i grew up working
for a company that my father was at it’s called

00:00:52.240 –> 00:00:56.800
coca-cola and i was told i was never going to
get a job there and i did two degrees at uni

00:00:56.800 –> 00:01:01.120
because there was no jobs and they said look
we’re really desperate for someone just do it

00:01:01.120 –> 00:01:07.520
for six weeks and i ended up being there 18 years
later so i went from a sales rep to a director and

00:01:07.520 –> 00:01:11.200
every year i said i was going to leave and
every second year they gave me a new job and

00:01:11.200 –> 00:01:16.960
it was a wonderful career but i could see the
writing on the wall in two cases so one was that

00:01:16.960 –> 00:01:20.400
uh you know we’re sort of a bit like the canary
in the coal mine down here in australia we’ve got

00:01:20.400 –> 00:01:25.680
a very tight market easy market to implement but
you could just say that sugar was becoming public

00:01:25.680 –> 00:01:30.640
enemy number one and the second thing was that
my health i’ve got an inherited condition called

00:01:30.640 –> 00:01:36.080
polycystic kidney disease and basically my kidneys
were going sideways and i knew that you know

00:01:36.080 –> 00:01:40.640
working 80 hours a week in corporate traveling
around the world wasn’t going to cut it so

00:01:40.640 –> 00:01:45.920
in 2011 i left and yeah been on the journey of my
own businesses ever since one of the things that i

00:01:45.920 –> 00:01:50.160
appreciate about you is that i really appreciate
coca-cola as a company because they figured

00:01:50.160 –> 00:01:54.240
out distribution and partnerships like almost no
company on this plan actually like no company they

00:01:54.240 –> 00:01:58.960
can move an atom anywhere on this planet yes yeah
as long as the liquid form they can get it from

00:01:58.960 –> 00:02:03.280
here to there and i knew this because a couple
of reasons one as a kid of course my parents had

00:02:03.280 –> 00:02:06.720
convenience stores so i remember the smell of
coca-cola trucks distributing but i was a very

00:02:06.720 –> 00:02:11.200
curious kid and i asked a lot of questions and i
learned a lot about how coca-cola got distributed

00:02:11.200 –> 00:02:17.680
and also my grandfather owned a sodapop factory in
nairobi and i you know so i learned from there and

00:02:17.680 –> 00:02:22.320
i highlight this because for those of
you and i look at software probably not

00:02:22.320 –> 00:02:27.200
dissimilarly like we learned like everything goes
through the distribution chain in the world except

00:02:27.200 –> 00:02:32.160
for cloud software subscription stuff it doesn’t
work anymore but you guys figured it out at

00:02:32.160 –> 00:02:36.640
least a little bit and that’s why i found you so
fascinating is that not only did you figure it out

00:02:36.640 –> 00:02:41.440
because i guess you brought some of this of course
you’re gonna go through distribution and uh model

00:02:41.440 –> 00:02:44.240
and then you worked at it and figured out how
to make it work and then you end up selling

00:02:44.240 –> 00:02:49.520
your company for more than one times revenue
which these are all like huge success stories

00:02:49.520 –> 00:02:53.680
but what are we talking about time let’s scale my
empire right so tell us about that yeah and and

00:02:53.680 –> 00:02:57.440
just quickly you know when i when i was leaving
corporate i thought well you know that they say

00:02:57.440 –> 00:03:02.480
that you know what are you passionate about what
are your skills in and what’s your need and you

00:03:02.480 –> 00:03:07.360
know i’m very passionate about technology always
have been i was the first uh just quickly in coke

00:03:07.360 –> 00:03:11.680
they said um we can’t give you mobile phones and
i said okay that’s fine i’ll go and buy one and

00:03:11.680 –> 00:03:16.080
i kept winning all the targets and i heard once
my boss said we’ve got to stop this guy winning

00:03:16.080 –> 00:03:21.760
targets like he beats everybody and everything
he’s cheating the system and all i used to do is

00:03:21.760 –> 00:03:26.000
say to my clients you call me when the stock
arrives right so you your mum and dad’s yeah

00:03:26.000 –> 00:03:30.480
there we go your mum and dad that’s my coca-cola
robot i’m just grinning right here there you go

00:03:30.480 –> 00:03:36.000
yes call me soon as the stock arrives so guess
what i’ll put it up quicker you sell more and it’s

00:03:36.000 –> 00:03:40.640
gonna cost you 60 cents to call me on my mobile
phone that’s it that was my secret so anyway long

00:03:40.640 –> 00:03:47.120
story short technology i loved and and um coke
brings you a bit of power so what i basically did

00:03:47.120 –> 00:03:53.120
is walk down the office to apple who was not that
far from us in sydney australia and i said i want

00:03:53.120 –> 00:03:58.320
to have a meeting with the head of marketing and
they said fine and they came out and i said look

00:03:58.320 –> 00:04:04.960
i’ve got this idea that there’s apps that could be
sold by corporates so ia you know the westfield or

00:04:04.960 –> 00:04:10.720
whatever the largest corporates could have an
apple mobile app to make the experience better you

00:04:10.720 –> 00:04:16.320
opened up hearing it and basically that was one
of my first gigs when i left coke uh leveraging

00:04:16.320 –> 00:04:22.000
the power of the coke brand to walk into apple
and you know uh that that was it that’s where my

00:04:22.000 –> 00:04:26.960
passion all started i mean uh you know i just
started showing people my bottle cap my coca-cola

00:04:26.960 –> 00:04:32.320
robot i am truly a coca-cola fan but this is
exactly it i mean this idea i mean of course

00:04:32.880 –> 00:04:38.640
i mean of course of course you’d have distribution
i’m just kill my robot here uh of course your

00:04:38.640 –> 00:04:44.640
distribution of course you walk into apple and say
we can bring apps like through markets of course

00:04:44.640 –> 00:04:48.720
you know you being a distributor it’s all about
being good service to the customer so they call

00:04:48.720 –> 00:04:54.320
you first instead of your dire competitor pepsi
of course of course but not so much with sas

00:04:54.320 –> 00:04:59.120
and cloud software but you guys figured it out
like so what was your experience once you get to

00:04:59.120 –> 00:05:05.600
cloud software like apps are different well like i
said look the coca-cola company 150 years you know

00:05:05.600 –> 00:05:10.160
warren buffett owns 10 of it’s made most of his
wealth out of it you know it’s been a brilliantly

00:05:10.160 –> 00:05:14.320
run business so i learned a lot there for 18
years and i was like you’re very curious i used to

00:05:14.320 –> 00:05:18.640
lived in australia but sort of worked globally
through this system and they it was a marriage

00:05:18.640 –> 00:05:24.400
that was always in disharmony most of the time
right but there’s some some markets where you

00:05:24.400 –> 00:05:29.120
know the what what i call the company so think
of that as a franchise or the code company

00:05:29.120 –> 00:05:32.800
and then the bottlers were the ones that the
coat company did the marketing the product

00:05:32.800 –> 00:05:38.080
does that sound familiar with sas yep so they did
that and then we did all the rest of it right so

00:05:38.080 –> 00:05:42.400
some countries are in harmony some weren’t
but then i jumped over to the tech side and

00:05:42.400 –> 00:05:46.480
we came across a small company that was a startup
and it was great and we got into that it was

00:05:46.480 –> 00:05:51.760
called podio we loved it drank the kool-aid and
sold it and then a company called citrix bought

00:05:51.760 –> 00:05:57.040
it and uh i went to a part of me partner meeting
when i was on an eight week holiday with my family

00:05:57.040 –> 00:06:00.640
everything was great i went to this part of
meeting in copenhagen they were going to say this

00:06:00.640 –> 00:06:06.080
is our strategy for the partners moving forward
and halfway through it i called my business

00:06:06.080 –> 00:06:11.680
partner scott at the time and said we’re leaving
this platform tomorrow he said what like we’ve set

00:06:11.680 –> 00:06:17.360
up 30 people in the philippines we’ve got we’ve
invested three years in this business i said

00:06:17.360 –> 00:06:23.600
citrix are going to destroy this business they’ve
got no idea how to run a partner community

00:06:23.600 –> 00:06:28.000
and you know middle east one day right but they
had their key people there presenting to us

00:06:28.000 –> 00:06:34.560
and uh sadly that’s that’s what’s happened and
uh so we invest a lot of time energy and yeah

00:06:34.560 –> 00:06:39.680
it was like a shock i’m like really like is this
how i’m not saying every tech partner and sas

00:06:39.680 –> 00:06:44.480
platform behaves that way but it was like day and
night between what i was used in the coke system

00:06:44.480 –> 00:06:50.000
versus what they were saying they were going to do
for us it was basically you guys sell licenses and

00:06:50.000 –> 00:06:54.240
that’s it there’s no other infrastructure we’re
going to give you i’m like really is that as

00:06:54.240 –> 00:06:58.960
good as it gets you know it’s funny i know the
podium people pretty well i will refrain from

00:06:58.960 –> 00:07:03.280
commenting too deeply but i do remember one of
the things that surprised me about podio because

00:07:03.280 –> 00:07:07.600
they they wrote my example of a of a partner
when i was the freshman spreading partnerships

00:07:07.600 –> 00:07:11.840
with freshworks of uh why you just can’t judge
a company because i had no idea who these people

00:07:11.840 –> 00:07:15.840
were they’re from scandinavia they said they’re
integrating refresh i looked at the product i

00:07:15.840 –> 00:07:20.560
didn’t understand anything that was going on in
this thing and it drove the most number of net

00:07:20.560 –> 00:07:24.720
new signups for us and i’m like oh wow and then
i got to know the product i get to know like ryan

00:07:24.720 –> 00:07:29.360
and all those people over there and they were
all great they looked very very good and then uh

00:07:29.360 –> 00:07:34.560
stickers stood by them and they kind of had
you know 18 months to find themselves you

00:07:34.560 –> 00:07:39.440
know and find something else to do i guess and
you know it is i mean i know the citrix people

00:07:39.440 –> 00:07:44.320
too and it’s just um think about citrix why i
thought it might work and i guess they thought

00:07:44.320 –> 00:07:49.920
it would work on powerpoint uh as an argument
is that if you look at like say webex actually

00:07:49.920 –> 00:07:56.000
you and mcafee those are the two companies two
who like between mcafee and webex they really

00:07:56.720 –> 00:08:02.240
lit up the idea that you could sell subscription
software through the channel very early and they

00:08:02.240 –> 00:08:07.360
had steep margins they really occurred everybody
they’re like doing you know 60 70 margins and

00:08:07.360 –> 00:08:12.800
everyone’s like how can we do that and they grew
so quickly webex and mcafee and citrix came in

00:08:12.800 –> 00:08:17.520
pretty quickly with the go-to products and
of course had to compete with webex and

00:08:17.520 –> 00:08:21.840
therefore and they they succeeded they actually
implemented it and i thought they can bring

00:08:21.840 –> 00:08:26.720
podio to market but podio is not the same kind
of sale right because it’s not just it’s not just

00:08:26.720 –> 00:08:31.840
video calling it’s not a phone call you know it’s
a it’s a full setup it’s like a requirement it’s

00:08:31.840 –> 00:08:38.720
a complex sale land implementation that’s right
that’s a low margin you know like it’s not as if

00:08:38.720 –> 00:08:44.720
it’s um huge huge fees and then like you know
same thing with coke right we used to say coke

00:08:44.720 –> 00:08:48.560
sometimes when we bought small companies we turn
them into smaller ones it’s no one’s fault like

00:08:48.560 –> 00:08:52.080
there’s you know really smart people in
both systems but citrix were having some

00:08:52.640 –> 00:08:57.680
you know big changes of the you know they had they
had a new ceo on board there was a new direction

00:08:57.680 –> 00:09:03.200
and you know if you look at the overall profit
pool you know we were just you know we weren’t

00:09:03.200 –> 00:09:08.080
even a fraction of a fraction you know it was
so small and i just knew that i wasn’t going

00:09:08.080 –> 00:09:13.920
to wait until i uh sorted that out we needed to
go and do other things and i also thought that

00:09:13.920 –> 00:09:19.920
you know being a one platform was maybe a risk
also so we sort of jumped in into the side of

00:09:19.920 –> 00:09:25.520
well let’s go agnostic and work for a particular
client which was agencies so we said we’re going

00:09:25.520 –> 00:09:30.640
to work for agencies we’re going to solve two
problems one is your sales and marketing and

00:09:30.640 –> 00:09:36.880
the other is your operations so we’ll get you know
software’s to basically solve that and a way we’ll

00:09:36.880 –> 00:09:41.760
go and we’ll do anything well we quickly realized
scenario and i’m sure that people listening here

00:09:41.760 –> 00:09:46.960
is that you know just trying to get your head
around every software option i think there’s what

00:09:46.960 –> 00:09:52.320
9400 martech products is you know at the
moment out there it’s more now it’s 25

00:09:52.320 –> 00:09:57.360
000 this year oh my god yeah so like it was
just a headache to try to do all of that so

00:09:57.360 –> 00:10:02.720
um yeah so then we changed strategy again and said
look we’ll just pick a couple of key partners but

00:10:02.720 –> 00:10:09.520
keep the same market which was agencies so same
market but just a couple of key products and um

00:10:09.520 –> 00:10:12.240
yeah that’s when we sort of started
to get some really good traction

00:10:13.200 –> 00:10:15.840
so there’s another reason why you’re
so fascinating because like one of the

00:10:16.640 –> 00:10:21.040
you know people have been listening god bless
you all for i’ve been listening episode episode

00:10:21.040 –> 00:10:25.200
i’ve been noticing that i’m like getting sharper
what i understand is actually the problem

00:10:25.200 –> 00:10:29.920
this year is the scalability trap it really
is you know we talked about this but you were

00:10:29.920 –> 00:10:34.160
here mailing building an agency for agencies to
help them get out of scalability trap for those

00:10:34.160 –> 00:10:39.920
who are just tuning in the trap is like no other
business agencies have this problem but the more

00:10:39.920 –> 00:10:45.280
revenue you have because you’re fundamentally
selling labor as your product it means that you

00:10:45.280 –> 00:10:50.080
have to have more payroll to fulfill that revenue
than commitments which means the next month that

00:10:50.080 –> 00:10:54.160
payroll has to turn over again which means you
need more revenue it’s the only business the more

00:10:54.160 –> 00:11:00.240
you scale the higher risk your business is and
it is a trap and it’s very difficult to escape

00:11:00.240 –> 00:11:04.720
uh you did escape and it’s scaled my umpire which
is how you end up selling a high multiple and you

00:11:04.720 –> 00:11:10.480
are now coaching so we tell us about ccc as
well and similar themes actually uh but like

00:11:10.480 –> 00:11:17.200
tell us about what your what the community is yeah
yeah so so one of the key platforms we chose was

00:11:17.200 –> 00:11:22.560
copper copper crm integrates beautifully gmail
and most of the agency owners were gmail so it

00:11:22.560 –> 00:11:27.840
worked really well now we also did a little bit of
hubspot and some others but copper was our key one

00:11:27.840 –> 00:11:32.240
and there was no real partner community so
i you know when i was at the coat company

00:11:32.240 –> 00:11:37.200
all of the bottles so to speak used to work
together to share you know why get a consultant

00:11:37.200 –> 00:11:41.680
in in italy and you pay a whole lot of money
to solve a problem and then that doesn’t get

00:11:41.680 –> 00:11:46.240
distributed around the network right you like
we’re never going to sell coke to anyone in italy

00:11:46.240 –> 00:11:51.440
they’re never going to sell it to australia right
so it made sense to share ip and knowledge and

00:11:51.440 –> 00:11:55.520
so that’s what i’m going to do with the copper
partners like you know how you doing proposals

00:11:55.520 –> 00:12:00.800
what how are you doing demos like you know
that you know and copper’s a fantastic platform

00:12:00.800 –> 00:12:04.800
but they were very much in growth stage and
they’re like just how we get many more licenses

00:12:05.840 –> 00:12:10.320
the way we get more licenses is our partners you
know your partner’s actually working better having

00:12:10.320 –> 00:12:15.280
your better business model so i sort of stepped in
and filled that void so i did that for copper and

00:12:15.280 –> 00:12:20.080
then when we sold i sort of thought well there’s
i don’t think there’s anything like that and why

00:12:20.080 –> 00:12:25.040
does it just have to be one platform why does why
can’t it be multiple platforms so that’s what i

00:12:25.040 –> 00:12:31.600
do now we’ve run the cloud consultants collective
and it’s a free slack community and it’s for any

00:12:31.600 –> 00:12:38.000
sas platform so we’ve got zoho hubspot copper
salesforce microsoft you name it and it’s

00:12:38.000 –> 00:12:43.680
typically for people that have got less than
20 employees and they’re looking to scale um

00:12:43.680 –> 00:12:48.480
you know i share some of my expertise around
how we did that and how we’ll manage to to

00:12:48.480 –> 00:12:53.440
exit but like you said it’s a hard game and it’s
even a harder game if you all do it individually

00:12:53.440 –> 00:12:58.080
why don’t we just get together and share it so
so far we’ve you know in five weeks we’ve gone

00:12:58.080 –> 00:13:04.000
from zero to 75 members and uh you know i think
it’s it’s really fitting a real need out there

00:13:04.000 –> 00:13:07.440
and one of the things obviously that i love
one of the themes to get out of the trap

00:13:07.440 –> 00:13:11.840
is you’re taking these technology platforms like
sas would you know they’re quite happy to sell

00:13:11.840 –> 00:13:16.720
direct but you you you know the secret is that of
course customers don’t want to buy it directly all

00:13:16.720 –> 00:13:20.800
of them can right you need agencies to customize
it for you and that’s actually the fundamental

00:13:21.760 –> 00:13:25.200
like theory of all the agencies in this
collective and then that’s the way you got

00:13:25.200 –> 00:13:31.280
out of the scalability trap is by finding ways to
find leverage revenue out of it i think that is

00:13:31.280 –> 00:13:35.520
really the story i’d like to tell more because i
think more agencies need to hear it i mean you’re

00:13:35.520 –> 00:13:40.080
a digital agency this is really the way out so
tell us a little bit about this like first how

00:13:40.080 –> 00:13:44.480
did you for scale by empire you had like what was
your revenues i mean you weren’t just selling like

00:13:44.480 –> 00:13:48.240
hourly rates like what how did you
structure commercial your engagements

00:13:48.800 –> 00:13:55.040
yeah so we you know we we started selling uh you
know licenses first then implementation and we

00:13:55.040 –> 00:14:00.480
realized like you said you know that just means
more hours that you got to have for for clients

00:14:00.480 –> 00:14:05.600
and you know it was you know the the rates so what
we firstly did is you know let’s move away from

00:14:05.600 –> 00:14:11.520
just having flat rates right let’s do packages so
let’s sell packages try to productize it rather

00:14:11.520 –> 00:14:16.800
than sell individuals and we’re very much around
what’s a business problem you’re trying to solve

00:14:16.800 –> 00:14:22.400
and what will be the outcome of that and therefore
we’ll take a share of that so we really tried to

00:14:22.400 –> 00:14:29.120
change the way that we structured our pricing uh
compared to a lot of other other agencies so so

00:14:29.120 –> 00:14:33.040
we did that and then we looked at well what
what other income because coke used to have

00:14:33.040 –> 00:14:37.280
a thing called cradle to grave like how can
we have a consumer right through their life

00:14:37.920 –> 00:14:42.880
cycle so i’m like the same thing we do all these
projects and then we say goodbye so we do all

00:14:42.880 –> 00:14:46.960
this upfront marketing selling we do the project
then we just say goodbye to the client i’m like

00:14:46.960 –> 00:14:51.680
this is crazy like how can we bring more value
so that’s when we set up training that’s when

00:14:51.680 –> 00:14:57.120
we set up support and that’s when we set it up
a community to be honest we didn’t complete the

00:14:57.120 –> 00:15:01.040
community but the strategy was well we’ve
got all these users out there how can we

00:15:01.040 –> 00:15:08.080
set up a community so that they can get ongoing
support so to really extend that value and then

00:15:08.080 –> 00:15:14.960
when you sell it you’ve actually got recurring
revenue to sell not just one-off project costs

00:15:14.960 –> 00:15:19.840
you could probably find margins in there that are
more than just like one-to-one payroll right so

00:15:19.840 –> 00:15:26.000
where where were your margins of all that stuff
how did you yeah yeah look out our margins were

00:15:26.000 –> 00:15:32.000
a lot higher than the average um i mean you know a
sign of disclosure i can’t say that the specifics

00:15:32.000 –> 00:15:36.080
but uh yeah but what are the one of these packages
were like were the places where you found margins

00:15:36.080 –> 00:15:41.760
i think that’s the more interesting story because
people can then replicate it yeah yeah so so um so

00:15:41.760 –> 00:15:49.200
instead of selling like individual seats right
so we we would go in and we would effectively

00:15:49.200 –> 00:15:55.440
say well we’re going to sell the seat the license
the implementation and the training will actually

00:15:55.440 –> 00:16:00.720
do that as a package right so we we started like
unfortunately the industry unbundled everything

00:16:01.280 –> 00:16:07.600
i when i worked at coca-cola the the supermarket
buyer was always trying to unbundle everything so

00:16:07.600 –> 00:16:13.120
then they could negotiate the best point on each
individual item right and you never wanted that

00:16:14.000 –> 00:16:18.480
what so we flipped it the other way it’s like
well the industry is doing it this way why don’t

00:16:18.480 –> 00:16:24.240
we actually package it up so they’re buying a
package and that package is then a percentage

00:16:24.240 –> 00:16:28.960
of what the return on investment’s going to be
right so if you looked at it you know there you

00:16:28.960 –> 00:16:35.120
know therefore we’re about two and a half to three
times our pricing went up compared to what it was

00:16:35.120 –> 00:16:41.120
or our margins our pricing led by our margins went
up and also what we did was we did a lot of skill

00:16:41.120 –> 00:16:45.920
skill development the back end so training our
teams having better platforms to train our team

00:16:45.920 –> 00:16:51.840
so then the labor efficiency also declines so
that’s how we got uh incremental margins what

00:16:51.840 –> 00:16:56.240
was your lifetime on these clients because you
were doing f you were trying to cradle the grave

00:16:56.240 –> 00:17:02.080
how long was the life time average of your clients
yeah well look um some of the client like from a

00:17:02.080 –> 00:17:06.160
licensed point of view because a lot of people
say don’t worry about the commissions it’s it’s

00:17:06.160 –> 00:17:10.720
not worth it just sell the you know sell the
consulting fees and sell the services but when

00:17:10.720 –> 00:17:16.160
we went to sell the business the license fees
typically it was about a what is there a three

00:17:16.800 –> 00:17:21.280
maybe three percent churn you know some companies
are ten i think copper was about three percent

00:17:21.280 –> 00:17:27.600
churn right so on licence fees so there was
a beautiful recurring revenue it was like um

00:17:27.600 –> 00:17:31.440
in australia i don’t know if it transfers but
in australia you’ve got a real estate company

00:17:31.440 –> 00:17:36.560
or a realtor that sells your house and you know
people always look at the sexy side which is

00:17:36.560 –> 00:17:40.240
them selling the houses but what they forget is
they’ve got this great thing called a rent roll

00:17:41.040 –> 00:17:46.000
and that is where the real value is because
it’s predictable it doesn’t need any more sales

00:17:46.000 –> 00:17:52.000
and marketing costs and it’s got a very low churn
rate so you know when we went to sell the business

00:17:52.000 –> 00:17:57.360
who bought us if they just said hey we’re
going to just buy it on your current licenses

00:17:57.360 –> 00:18:03.600
we’re like yeah okay there’s your rent roll
but what we did is said well hang on um you’ve

00:18:03.600 –> 00:18:10.320
got all of these google clients at the moment
what happens if you sold 10 on because google

00:18:10.320 –> 00:18:16.240
as you know if any agency out there selling very
tight margins right you know it’s next to nothing

00:18:17.200 –> 00:18:23.760
yeah five point well there was like 30 right well
sorry you know 30 percent was on average what you

00:18:23.760 –> 00:18:28.640
got so we said well hang on if you just ran 10
percent of your clients and sold that additional

00:18:29.280 –> 00:18:33.040
just think how much more money that’s going
to be so that’s the way that we upsold our

00:18:33.040 –> 00:18:39.040
multiple because of what’s the true opportunity of
converting it and it also helped that my business

00:18:39.040 –> 00:18:43.600
partner scott went across to implement implemented
right so we didn’t just come up with the strategy

00:18:43.600 –> 00:18:47.840
in a way we actually gave the implementation
which was scott moving across to the business

00:18:48.880 –> 00:18:55.040
well i have met scott he’s the one who convinced
me to change the way i even talk about appbind

00:18:55.040 –> 00:19:00.560
uh so one of the things that he told me that blew
my mind because a lot of agencies when they talk

00:19:00.560 –> 00:19:04.000
about commissions what we’re talking about right
now so the commission is when the sas vendor

00:19:04.000 –> 00:19:09.840
gives you the sales commission for brokering
the sale to the client right so it’s you know

00:19:09.840 –> 00:19:14.800
usually some percentage of the revenue for either
lifetime or for 12 months or something like that

00:19:15.600 –> 00:19:19.280
a lot of agencies don’t like taking it because
it feels kind of dirty like you’ve sold your

00:19:19.280 –> 00:19:26.720
client out it block imputes your reputation it
feels like you know you’re a craven crass venal

00:19:27.280 –> 00:19:34.000
mercenary all these kind of negative ideas and
so they don’t take it and uh this is a problem

00:19:34.000 –> 00:19:38.560
for two reasons now the first reason i thought
about which i was pitching that why you should

00:19:38.560 –> 00:19:42.000
do it is that it doesn’t really matter if you
take the money or not but it helps you build a

00:19:42.000 –> 00:19:45.520
relationship with the vendors because when they
have clients that refer to agencies they look at

00:19:45.520 –> 00:19:50.160
the commission’s program so the only information
they have is that and that’s what i said to scott

00:19:50.160 –> 00:19:55.520
and scott just looked at me like i was dummy dum
dum i was like no senior yes that’s great but

00:19:55.520 –> 00:19:59.760
what really mattered was the multiple of this
recurring revenue because it’s passive income

00:19:59.760 –> 00:20:02.960
if you want everyone to sell your company
this is your this is what you actually

00:20:03.760 –> 00:20:08.320
own is the commission stream right because
it stays whether the clients come or go like

00:20:08.320 –> 00:20:13.920
this right yeah it’s a real asset yeah and the
other thing it does is it does help you invest

00:20:13.920 –> 00:20:18.960
in the business as well so so quick quick we
i won’t mention the partner’s name but let’s

00:20:18.960 –> 00:20:24.240
say they had a vc that came on the board and
the vc said we’re going to change strategies

00:20:24.240 –> 00:20:28.560
hey we’re going to go for a different club i’m
going to go more enterprise and small business

00:20:28.560 –> 00:20:35.440
and the other thing is we’re going to change
from an seo paid campaign to a content uh inbound

00:20:36.080 –> 00:20:40.800
and and both i didn’t agree with both strategies
but it’s like okay do it over time but i just

00:20:40.800 –> 00:20:46.480
did it overnight especially the the paid and
we went from 80 leads a month to like zero

00:20:47.040 –> 00:20:51.520
right so we had to find a way to actually generate
our own leads which i think a lot of agencies

00:20:51.520 –> 00:20:55.520
really you know they they love getting leads
for their clients but they struggle to get leads

00:20:55.520 –> 00:21:02.320
into the the software side right so um anyway long
story short we did a brilliant job on linkedin

00:21:02.320 –> 00:21:06.320
but the way that we funded that was through
the commission income that we were getting

00:21:06.320 –> 00:21:13.040
we didn’t have to tap in so yes it’s great for
sales but it’s also good really good cash flow

00:21:13.040 –> 00:21:17.520
to invest in the business and ultimately
you know i think every business out there is

00:21:17.520 –> 00:21:22.640
helping someone so yes commissions can be a
bit of a dirty word but ultimately if you’re

00:21:22.640 –> 00:21:27.120
providing a better solution and the end customer
gets a better result well to me you know that’s

00:21:27.120 –> 00:21:32.320
that’s the good story then at the end you know
speaking of our coca-cola backgrounds you know

00:21:32.320 –> 00:21:35.680
i mean commission isn’t a dirty word because
everything else in the universe there’s going

00:21:35.680 –> 00:21:40.320
to be margin as it goes down the value chain
because the commission is about managing the

00:21:40.320 –> 00:21:45.120
cost and opportunity and the relationship between
each link in the chain right that’s what it’s for

00:21:45.120 –> 00:21:49.440
so if you’re going to spend time with copper
or panadoc or amazon link or google or whatever

00:21:49.440 –> 00:21:54.000
that commission covers you i mean paying
attention to them and you need you have

00:21:54.000 –> 00:21:58.320
to earn it otherwise you’re never going
to be able to build a valuable business

00:21:59.840 –> 00:22:04.640
in a relationship with them right and and
the idea of not taking it and also if you

00:22:04.640 –> 00:22:11.760
feel dirty to your clients why like you just
tell them like i i support you i work with them

00:22:11.760 –> 00:22:15.760
they pay me to cover my time invested back and
dealing with them on your behalf that’s how

00:22:15.760 –> 00:22:20.240
this works right it’s not just you i have many
clients so they pay me instead of me building

00:22:20.240 –> 00:22:24.320
any given client this week for whatever problem
they’re creating for me right it’s the only thing

00:22:24.960 –> 00:22:29.040
and sometimes we sweep like sometimes we didn’t
take it all ourselves we shared a bit with the

00:22:29.600 –> 00:22:33.760
the agency as well so you know there’s different
ways you can can do it but i think it’s it’s

00:22:33.760 –> 00:22:39.120
really important and and i think you know so often
we get busy right so we get busy just running

00:22:39.120 –> 00:22:44.880
whatever business model that’s standard so we just
do you know project base we just do you know per

00:22:44.880 –> 00:22:49.760
hour you know here’s all my team and this is the
prices they are and i’ll build by the hour etc

00:22:50.320 –> 00:22:54.160
and you know that’s where i think you know step
back and look at your business model and go okay

00:22:54.160 –> 00:22:58.400
well if i want to sell this business you know what
business model do i actually need to get to that

00:22:58.400 –> 00:23:03.600
end point and then you start to implement that and
i was like you know like i said the code company

00:23:03.600 –> 00:23:08.480
had a brilliant business model it’s 150 years old
so they’ve you know obviously done something right

00:23:08.480 –> 00:23:14.480
so i just took that and applied it to the set
assess world now you’re you’re coaching agencies

00:23:14.480 –> 00:23:18.880
again they must be resisting because most every
agency i talk to just starts on the treadmill

00:23:18.880 –> 00:23:24.400
of selling labor for money and therefore having
to sell more money labor to so get more money

00:23:24.400 –> 00:23:28.560
and you’re trying to get them to switch so
what are they coming back to you but with

00:23:28.560 –> 00:23:32.560
that you have to overcome i’m just so curious
where people are i think i think the biggest

00:23:32.560 –> 00:23:35.840
thing is you know you just get comfortable
right we’re all humans we like comfort

00:23:36.400 –> 00:23:40.160
we don’t don’t like to be challenged so it’s
like well i’ve just always done it this way

00:23:40.880 –> 00:23:45.040
so you know i think that’s probably the biggest
thing it’s more of a mindset like if you do the

00:23:45.040 –> 00:23:50.000
model and you do the numbers you know that doesn’t
lie that like it’s like okay it’s clearly better

00:23:50.000 –> 00:23:53.840
to move to a model like this but it’s like
well i’ve just always done it that way or

00:23:53.840 –> 00:23:58.240
or um i i just don’t think it’s going to work in
the market and what i say to people is just well

00:23:58.240 –> 00:24:03.760
let’s just try what’s what’s the downside of the
next client you come bring in actually do it to

00:24:03.760 –> 00:24:09.760
the the new model right at worst you’re going
to lose one client opportunity that’s it but at

00:24:09.760 –> 00:24:15.600
best if you run those that new model across all
your potential clients it could be worth millions

00:24:15.600 –> 00:24:22.160
of dollars to you so um you know that that’s
probably the biggest of objections i think the

00:24:22.160 –> 00:24:26.800
the math speaks for itself i wish it did i
actually interviewed earlier in the season

00:24:26.800 –> 00:24:33.040
another like one of the platinum diamond
whatever ginormous thing at hubspot is like

00:24:33.840 –> 00:24:37.440
yes they they’ve added more tiers and so
i don’t know what they’re called anymore

00:24:37.440 –> 00:24:44.000
um yeah i think it’s something diamond but yeah
yeah yeah i think i think it was a diamond partner

00:24:44.000 –> 00:24:50.080
anyway they they during the pre-interview and the
interview of course commissions don’t matter we

00:24:50.080 –> 00:24:53.200
don’t even care we don’t look at it and then
the app post interview where all the real

00:24:53.200 –> 00:24:59.840
information comes out not unrecorded oh yeah it’s
all commissions for us you know 30 of our revenue

00:25:00.560 –> 00:25:03.280
well you could have said that because it would
be a little bit more honest but they didn’t

00:25:03.920 –> 00:25:07.120
they couldn’t admit it to themselves you
know it was only in when i was like really

00:25:07.840 –> 00:25:12.560
i’m stirring the tea leaves i i don’t mean they’re
lying i don’t mean they’re they’re being naive or

00:25:12.560 –> 00:25:17.040
anything but it’s like one of those things that as
an agency we care about our clients obviously the

00:25:17.040 –> 00:25:23.280
most and the idea they like the word commission
alone already feels like i sold my client out

00:25:23.280 –> 00:25:28.400
really i it to me they’re better words like
margin would be better i mean every business

00:25:28.400 –> 00:25:32.800
needs margins i mean that’s basically what it
is i mean everything like but you know i mean

00:25:32.800 –> 00:25:38.480
i worked in retail i grew up with retail when
i was like six years old so like i know for

00:25:38.480 –> 00:25:44.320
for me it like it blows my mind to to do this
but i think agencies are so client-oriented

00:25:45.120 –> 00:25:50.000
that they want to provide the white
blood service i guess yeah but

00:25:51.440 –> 00:25:55.520
it’s like you know what’s that ongoing like
you know great examples hubspot they’ve got a

00:25:55.520 –> 00:26:00.320
fantastic facebook community you know supporting
each other technically right and i’m like saying

00:26:00.320 –> 00:26:05.520
my hubspot partners well that’s great now you’ve
set up something that’s a bit more customized

00:26:05.520 –> 00:26:09.200
right for your clients like you don’t
think they’re going to have ongoing needs

00:26:09.760 –> 00:26:14.480
for you because like at coke where
lucky when you implemented a sales crm

00:26:14.480 –> 00:26:18.160
we had system administrators right and
there was a you know a team of people

00:26:18.160 –> 00:26:23.520
responsible for making sure the data was accurate
that you know everything was going how it’s meant

00:26:23.520 –> 00:26:28.480
to be and we’d always get little notes out saying
you know you know you you know this data field’s

00:26:28.480 –> 00:26:33.040
not correct or whatever so there’s a team of
people managing that data because we knew how

00:26:34.080 –> 00:26:38.960
important that data was right because we direct
store delivered to everybody so we knew every

00:26:38.960 –> 00:26:44.880
bottle everywhere and and you know we were doing
i suppose business intelligence before it really

00:26:44.880 –> 00:26:53.440
became the buzzword but you know in agent you know
in the agency’s clients they set up the system

00:26:53.440 –> 00:26:59.760
fantastic and then everyone uses it differently
and within three months everyone goes well hang on

00:26:59.760 –> 00:27:03.280
that didn’t work it must be the
software must be a hubspot so that’s

00:27:03.280 –> 00:27:08.800
nothing to do with hubspot but just don’t leave
them right you know help them get that benefit

00:27:08.800 –> 00:27:12.720
and and that’s why if you do a business
case going in you do a return on investment

00:27:13.360 –> 00:27:20.080
you and the um the person that’s implementing it
has actually got a game plan it’s a business plan

00:27:20.080 –> 00:27:24.880
to say this is what we’re going to do and that
completely changes the mindset to oh no i’m just

00:27:24.880 –> 00:27:29.520
going in to sell you this software i’m going to
charge you exactly my labor rate by how many hours

00:27:29.520 –> 00:27:35.280
it takes to do it and i’ll see you later well
this is what i liked about your story which week

00:27:35.280 –> 00:27:39.520
earlier about how you used to give your your
when you were doing distribution you gave all the

00:27:39.520 –> 00:27:45.120
little businesses your cell phone number to get
an answer very quickly on text message right and

00:27:46.160 –> 00:27:51.520
people like that that stuck with me because what
in the chain and the value chain just especially

00:27:52.080 –> 00:27:56.320
in the cut through the industry of soda pop
right uh i’m sure there’s documentary about

00:27:56.320 –> 00:28:00.880
it but it’s cut it’s cut through you need to get
there faster than than like pepsi you just need to

00:28:00.880 –> 00:28:04.560
get there right otherwise they’ll you know you
know free delay and pepsi is gonna fill up the

00:28:04.560 –> 00:28:09.440
shelves and you’ll be out right and then you’re
done uh and so it’s just about customer service

00:28:09.440 –> 00:28:12.800
and it’s like oh yeah i’ll have customer service
but no this is you have to understand like this is

00:28:12.800 –> 00:28:17.520
what these all these little companies in the chain
are all about and the reason why you’re called

00:28:17.520 –> 00:28:20.720
you know sometimes i started i started this shtick
i don’t know if it’s playing out yet but the

00:28:20.720 –> 00:28:24.720
reason why you’re called an agency i don’t know
if people think about this agency means you take

00:28:24.720 –> 00:28:30.080
action that’s what agency means yes you’re you’re
the actor you know i know if you know your latin

00:28:30.080 –> 00:28:34.000
that’s what it means you’re the one who’s supposed
to be taking action and the customer is called a

00:28:34.000 –> 00:28:38.960
customer because you need to customize things for
the customer right that is the whole point of that

00:28:38.960 –> 00:28:45.600
word those words and so uh when we are talking
about software implementation you’re right people

00:28:45.600 –> 00:28:49.440
brought bring these software in i think people
have met have taken in the marketing kool-aid

00:28:49.440 –> 00:28:53.520
from the software companies it’s like an inferior
position it’s like they’re like they’re they’re

00:28:54.080 –> 00:28:59.200
they’ve submitted to themselves all the software
companies we’ll just put this in we have nothing

00:28:59.760 –> 00:29:03.600
i don’t nothing to do here they’ll just
take it all over from us like well no

00:29:03.600 –> 00:29:09.120
no client really wants that i mean not very many
clients they want the answer to be solved if they

00:29:09.120 –> 00:29:15.200
want they want the problem to go away and they
want you to take action that’s why you are an

00:29:15.920 –> 00:29:19.920
agency you know and so when you’re talking
about the full life cycle cradle the grave

00:29:20.560 –> 00:29:24.720
let’s just recap i just like recapping it so you
did of course you found you didn’t you found the

00:29:24.720 –> 00:29:29.760
licenses you did implementations you did training
you did ongoing support which would go on month

00:29:29.760 –> 00:29:33.520
after month after month after month after month
after month after month and that’s very high

00:29:33.520 –> 00:29:37.360
margin i’d imagine right because they’re just
paying you in case something went wrong right

00:29:38.320 –> 00:29:42.800
right and then you have the community and that’s
also very high margin if you set it up if you had

00:29:42.800 –> 00:29:46.400
set it up because the people would train each
other and you’re just paying you for access to

00:29:46.400 –> 00:29:51.600
their network right and the commissions and did
you and uh do you have any other models in there

00:29:51.600 –> 00:29:59.680
as well look we did some consoling as well so you
know sometimes you know they needed it sometimes

00:29:59.680 –> 00:30:04.160
you know we go we can put the system in right
but to be honest you don’t have a sales process

00:30:04.160 –> 00:30:11.360
right so therefore we need to do that etc so often
we did the consulting side of it as well um so you

00:30:11.360 –> 00:30:16.560
know it was like a if you think of it a friend
of mine talks about a lot of the chocolate wheels

00:30:16.560 –> 00:30:20.560
so you’ve got the client in the middle and it’s
like okay what are all these things that i can do

00:30:20.560 –> 00:30:25.200
for the client so it becomes very client centric
and you know ultimately that’s what uh coke did

00:30:25.200 –> 00:30:31.840
i’ll give you a very quick story a very large
customer um the biggest customer that sells

00:30:32.720 –> 00:30:38.960
fast food in the world versus the second i’ll
call it that and one of them the smaller one saw

00:30:38.960 –> 00:30:43.520
the invoice that what the bigger one was paying
and said i want that price and you know you could

00:30:43.520 –> 00:30:49.760
like if we said yes to that that would be you know
catastrophic to our profit so i basically said

00:30:49.760 –> 00:30:53.120
what what do you want to make and they said
what do you mean i said well what do you

00:30:53.120 –> 00:30:58.800
want to make in profit for your total business
if i go and find that for you right will you

00:30:59.600 –> 00:31:03.680
actually you know this whole pricing
thing let’s let’s forget about it

00:31:03.680 –> 00:31:06.960
because that’s not the end game here the
end game here is to make you more money

00:31:07.680 –> 00:31:12.160
right and the guy ended up long story short what
we did was used all of their data so we collected

00:31:12.160 –> 00:31:17.360
all the transactional data and we mined it and we
just found opportunities not coke opportunities

00:31:17.360 –> 00:31:22.720
but total business opportunities for the guy we
had someone full time just doing that and they

00:31:22.720 –> 00:31:28.960
made so much more money than what the price would
have been just a simple price swap based on volume

00:31:28.960 –> 00:31:33.200
because they didn’t sell as much so we weren’t
going to give the same price but i think that’s a

00:31:33.200 –> 00:31:38.480
that’s an example where the co company were very
sophisticated around what’s the category how do we

00:31:38.480 –> 00:31:45.200
grow the total business whereas i still think the
the what i’ve witnessed from the sas platform is

00:31:45.200 –> 00:31:50.960
still a bit of we sell licenses and then you guys
go and implement it it’s like no actually there’s

00:31:50.960 –> 00:31:56.480
a lot more value on the table that can be gained
and i think that’s why i love helping people set

00:31:56.480 –> 00:32:01.280
up that that model god damn it now you explain to
me why i end up starting my own company which is

00:32:01.280 –> 00:32:05.920
painful no one should ever do that it’s like when
i was at freshbooks so we had this attitude as

00:32:05.920 –> 00:32:11.840
well that we would go like yeah we sold invoicing
software right like yay it’s like very exciting

00:32:11.840 –> 00:32:16.240
like no one got excited about that i mean some
people did but what really we got excited about

00:32:16.240 –> 00:32:20.480
because by the way one thing about sas is that
if you’re used to normal businesses where you

00:32:20.480 –> 00:32:26.400
actually see your customers face to face right and
then you go into this little glass prison that is

00:32:26.400 –> 00:32:30.800
behind your computer screen and you never see
your customers especially before video calls right

00:32:30.800 –> 00:32:35.040
you know like you you start losing touch with
people and we hated that right and so we have

00:32:35.040 –> 00:32:38.880
you know freshbooks was famous in 2007 they had
a phone like a 1 800 number we would pick up the

00:32:38.880 –> 00:32:42.720
phone in two rings people would get in trouble
if you didn’t answer the phone like that would

00:32:42.720 –> 00:32:48.320
be a big deal like a big problem four rings is a
problem at that company right we were very serious

00:32:48.320 –> 00:32:52.480
and we we loved it so we did that and we would
actually go and solve other problems with the

00:32:52.480 –> 00:32:56.960
client right for the customers beyond invoicing
like it’s not interesting they’re agencies we want

00:32:56.960 –> 00:33:01.600
to help them be successful what whatever and even
from my partners we would you know yeah they’re

00:33:01.600 –> 00:33:06.240
integrating with freshbooks but you know i wanted
more freshbooks licenses to be sold for the demand

00:33:06.240 –> 00:33:11.360
gen partners right but they were not going to do
that for me because i asked them to and i think

00:33:11.360 –> 00:33:17.200
a lot of sas companies they’re just like i have
a quota to hit so what are you doing for me like

00:33:17.200 –> 00:33:22.320
nothing because i hate you i have other people
who i care about or not you uh but what we did

00:33:22.320 –> 00:33:27.600
and i had this kpi at freshbooks for my partner
team which i got in trouble with but i don’t care

00:33:27.600 –> 00:33:31.920
i do whatever i want my title is chief handshaker
i’ll do whatever hell i want so our kpi was was an

00:33:31.920 –> 00:33:36.720
emoji heart like it was a hearts it meant hearts
one it’s like how does this a business metric no

00:33:36.720 –> 00:33:40.720
it’s a business metric because it comes i mean
it comes from you know crossing the chasm that

00:33:40.720 –> 00:33:46.400
comes from my this bookshelf over here from my
master’s degree about how humans actually function

00:33:46.400 –> 00:33:52.720
in a market it’s like what is hearts one well
it’s like dating so if you want that customer

00:33:52.720 –> 00:33:56.720
to stick with you want that partner to care about
you want to keep going with them your coca-cola

00:33:56.720 –> 00:34:00.880
you want that small business that corner store to
keep buying from coca-cola not switch for pepsi

00:34:00.880 –> 00:34:06.320
you go above and beyond right you do you you court
them you you do you do a favor you do a favor and

00:34:06.320 –> 00:34:10.800
eventually what you’ll find is without you even
asking them or picking up the phone or giving

00:34:10.800 –> 00:34:16.080
them a campaign they’ll call you and say hey i was
thinking about you here’s an opportunity for you

00:34:16.080 –> 00:34:19.440
right that’s when you won their heart when they
give you something because you’re thinking they’re

00:34:19.440 –> 00:34:24.480
thinking about you right and they you’re in
their heart and you’re the first person they

00:34:24.480 –> 00:34:28.480
think about and like i need to give this to
them because i value that relationship so much

00:34:28.480 –> 00:34:34.480
and the more hearts you win in the market right
right the more difficult it is remove you from

00:34:34.480 –> 00:34:39.040
that mark and the more the market will drag itself
to you i mean i love coca-cola so much i mean i

00:34:39.040 –> 00:34:41.920
have my little robot here i would be hugging
this the whole thing except it’ll make noise

00:34:43.600 –> 00:34:49.440
you know but like it’s like you know people love
coca-cola because it is i mean it’s more than

00:34:49.440 –> 00:34:53.760
soda pop you know i mean i don’t even explain
it to you it’s and all for all those businesses

00:34:53.760 –> 00:34:58.880
around the world right it made so many corner
stores work this is very hard my heart margin

00:35:00.160 –> 00:35:03.760
product right and it’s like it’s
the basis of convenience stores and

00:35:04.400 –> 00:35:10.320
restaurants yeah and and the great thing with
the sas model is one key thing one key difference

00:35:10.320 –> 00:35:16.240
between the the coke model and the sass model and
that’s capital right so yes there’s capital ip etc

00:35:16.240 –> 00:35:20.240
that the sas company has to go and do all the
research et cetera but for you as an agency you

00:35:20.240 –> 00:35:26.160
don’t actually have to set up any capital to do it
the co company when we were bottlers we had to set

00:35:26.160 –> 00:35:32.480
up the manufacturing assets the trucks everything
right so it’s hugely capital intensive whereas

00:35:33.040 –> 00:35:37.360
selling software isn’t so that’s the other
thing that attracted me to it so the model is

00:35:37.360 –> 00:35:41.920
very similar but it’s actually better because
the return on capital is much better we used

00:35:41.920 –> 00:35:46.720
to have a you know thing called roshi return on
capital employed and it’s much better in the in

00:35:46.720 –> 00:35:52.400
the sas world and that’s why now apple is worth
you know a lot more than the coca-cola company

00:35:52.400 –> 00:35:56.560
you know if you look at the brands and the share
changes it’s because of that right it’s not as

00:35:56.560 –> 00:36:03.120
capital intensive for the people that are helping
to sell it but for me it’s like okay if it’s not

00:36:03.120 –> 00:36:08.880
as capital intensive that’s good but let’s
let’s actually you know if i’m a sas company

00:36:08.880 –> 00:36:12.720
like you said it’s more than licenses it’s like
how do i actually help you be a better business

00:36:13.520 –> 00:36:18.000
and if i help you to be a better business
then effectively you’ll sell more so

00:36:18.000 –> 00:36:24.240
my example before of that you know second biggest
brand in the world of uh fast food i help them to

00:36:24.240 –> 00:36:30.000
be a better business right now i got the tailwinds
of that but i was actually helping them as a total

00:36:30.560 –> 00:36:36.080
so in a way what we’re saying is how do the sas
platforms better skill up the partners and then

00:36:36.080 –> 00:36:41.840
how do the partners look at the customer from a
total profitability point of view rather than just

00:36:42.480 –> 00:36:48.560
them selling a simple software and i think
that evolution i think to me it’s definitely

00:36:48.560 –> 00:36:54.720
getting there but i still think it’s a little bit
behind what i saw in the sophomore soft drink game

00:36:54.720 –> 00:36:59.600
because the match let’s talk about this talk about
this this was last season’s whole topic but i

00:36:59.600 –> 00:37:03.120
would like to talk because you have better really
good experience so you have so we named some of

00:37:03.120 –> 00:37:06.880
the partners you have and they’re some of your
better ones i mean you sold i don’t know how many

00:37:06.880 –> 00:37:12.240
gobs of copper seats and panda dive but there’s
some soft most sas companies as i discovered

00:37:13.040 –> 00:37:18.080
they just sell risk to the agencies and partners
and they’re basically pushing risk they’re

00:37:18.080 –> 00:37:21.680
not building them at building businesses not
creating opportunities you know you should be

00:37:21.680 –> 00:37:25.520
selling opportunities at risk and it’s crazy to me
because then your channel will collapse if you’re

00:37:25.520 –> 00:37:29.040
all you’re giving pushing out in the world is
risk you’re gonna no one’s gonna want to partner

00:37:29.040 –> 00:37:33.040
with you i mean you’re you’re you’re abusive
boyfriend you know abusive girlfriend that’s

00:37:33.040 –> 00:37:38.080
basically what you’re coming off as you know just
constantly needy right you need to care about the

00:37:38.080 –> 00:37:41.760
other people some companies are much better
but everything’s dating to me in partnerships

00:37:42.880 –> 00:37:48.080
some some companies are better than worse so like
who is the best partner you’ve had especially

00:37:48.080 –> 00:37:52.960
given what we talked about will be a good example
that we can look up to uh at sas companies and

00:37:52.960 –> 00:37:58.320
learn from yeah look for me the one that we
spent the most time in was copper right and

00:37:58.880 –> 00:38:04.000
we really enjoyed that because they did support
us me setting up a community where we all sort of

00:38:04.000 –> 00:38:09.920
worked together so when they had major strategic
decisions that sort of come to us as a group it

00:38:09.920 –> 00:38:15.920
was like having um i don’t know if you know much
about the subway business globally but effectively

00:38:15.920 –> 00:38:22.880
all the franchisees have boards that then you
know effectively work with the franchise orb

00:38:22.880 –> 00:38:27.680
and the subway company right so we took a
similar model into copper and said you know

00:38:28.640 –> 00:38:33.760
why don’t i go and get the opinions of everyone
we’ll all get alignment and then we’ll talk to you

00:38:33.760 –> 00:38:38.880
so it’s effectively you know it’d be like the
ceo talking the ceo much better and copper were

00:38:39.440 –> 00:38:45.280
very good around that and also i think that you
know listening to because a lot of us have got

00:38:45.280 –> 00:38:49.280
different experience right so for me i had
a lot of corporate experience i did a lot of

00:38:49.280 –> 00:38:56.320
you know billion dollar acquisitions of companies
i you know i was involved in um you know global

00:38:56.320 –> 00:39:02.320
strategy plans i’m sort of like well don’t miss
out on those opportunities within partners right

00:39:02.320 –> 00:39:07.920
because we have got something to add so you know
i think copper were good at listening to that and

00:39:07.920 –> 00:39:14.800
and you know i was talking to senior management at
copper to sort of um you know to talk about well

00:39:14.800 –> 00:39:21.200
what’s the view from our our perspective right
what what what’s important to us and how can you

00:39:21.200 –> 00:39:26.240
fit that into your plans because before that it
was sort of like well partners were just you know

00:39:26.240 –> 00:39:30.640
well they’re separate you know we’ll just worry
about the product we’ll worry about the marketing

00:39:30.640 –> 00:39:34.800
but the partners they can look after themselves
so copper is probably the best example of that

00:39:35.520 –> 00:39:39.200
you know i know if you know alex bass you must
know alex bass if you know him but they actually

00:39:39.200 –> 00:39:43.600
let him be and have it like he’s one of the copper
resellers and he ended up they gave him an office

00:39:43.600 –> 00:39:47.840
space in the office so they can talk to them
like you know that’s like extreme programming

00:39:47.840 –> 00:39:52.720
idea have a customer on the team put the partner
in your building and you have someone you can

00:39:52.720 –> 00:39:58.560
go like that’s the only company i’ve ever
seen do that such well actually that too and

00:39:58.560 –> 00:40:04.480
well well back in you know like there was some
and there’s always bad blood between some of

00:40:04.480 –> 00:40:10.480
the partners and some of the the people the owner
right so so we had some guys at at uh on our side

00:40:10.480 –> 00:40:15.680
of the fence been the bottler side we just you
know really had a dislike and and i’m like well

00:40:15.680 –> 00:40:19.920
your view was 10 years ago right i said
this but but i said why don’t we set up

00:40:20.480 –> 00:40:25.520
where we go and work in their side of the business
for a week and they go working hours right so we

00:40:25.520 –> 00:40:33.040
basically a day a week in the life of and it was
monumental change because they saw it from their

00:40:33.040 –> 00:40:39.680
side everyone always talks about swapping spouses
yeah it was like and it was it was amazing because

00:40:39.680 –> 00:40:46.240
they off they now saw okay well i know that’s
what’s driving that so i think that’s you know for

00:40:47.040 –> 00:40:52.560
some of the partners i i don’t know but i haven’t
heard many doing that and in a way what i’m trying

00:40:52.560 –> 00:40:57.920
to do with the cloud consultants collective is do
the work for the partners you know for the sorry

00:40:57.920 –> 00:41:02.960
the vendors i’m saying look you don’t have to do
as much of this because what we’re going to do

00:41:02.960 –> 00:41:07.120
is come together as a group and sort of you know
help each other run our businesses better it’s not

00:41:07.120 –> 00:41:12.000
the technical community there’s plenty of options
that you guys have already got that is the sas

00:41:12.000 –> 00:41:15.920
platform you’ve already got that nailed
but it’s like how do we get you to run

00:41:15.920 –> 00:41:22.000
a better agency or a better business that’s sort
of the community that we’re creating and it’s free

00:41:22.000 –> 00:41:28.080
and it’s on slack and i think some of the partners
are saying that’s great and then look at maybe

00:41:28.080 –> 00:41:32.160
going in and helping some of the partners as well
because if i’m doing all the research and i’m

00:41:32.160 –> 00:41:37.440
hearing what the partners have got to say i think
there’ll be a benefit to go back to the to the

00:41:37.440 –> 00:41:41.120
you know assess company themselves and say well
actually this is what all your partners are saying

00:41:41.120 –> 00:41:45.440
if you did this this would make a significant
difference so try to play that bridge between

00:41:45.440 –> 00:41:49.200
the two what a concept communication
between adults to solve problems never

00:41:50.960 –> 00:41:54.880
no everything is dating too simple yeah i know

00:41:58.160 –> 00:42:02.720
the uh surprising so it’s the whole thing
i talk about it’s partnership poker because

00:42:02.720 –> 00:42:06.960
everyone’s so anxious they end up like like
getting all for clamped and they can’t talk

00:42:06.960 –> 00:42:10.640
to the other partner because they’re afraid of a
meltdown on their sides like they’re just adults

00:42:10.640 –> 00:42:13.920
they’re just like you they go home they
have kids they have soccer games like

00:42:13.920 –> 00:42:17.920
football games uh actually football
in australia is a different thing

00:42:17.920 –> 00:42:21.440
what do you what do you call soccer in
australia i don’t even know we call it soccer

00:42:22.000 –> 00:42:27.600
okay good yeah okay good um but so who’s your
worst partner you must have dealt with tons of

00:42:27.600 –> 00:42:31.280
like bad partners i mean obviously we talked about
podio i don’t know if they were a bad partner they

00:42:31.280 –> 00:42:35.680
got destroyed like they were a good partner citrix
like give up with them but what’s an ex give them

00:42:35.680 –> 00:42:41.520
an example of enough to name names but of like a
typical sas like approach that you’re just like

00:42:42.720 –> 00:42:47.200
i don’t know man yeah look we’ve dotted through
and you sort of mentioned it before where it’s

00:42:47.200 –> 00:42:50.800
just you know all about the numbers so they
call and then they try to deep dive into your

00:42:50.800 –> 00:42:56.320
your pipeline to try to push clients forward
and i’m like well hang on this is what we know

00:42:56.320 –> 00:43:00.960
their objective is their objective is based
on these facts and this is the timing so

00:43:00.960 –> 00:43:05.360
there’s a disconnect here because i know that
you want it for your kpis and i completely

00:43:05.360 –> 00:43:10.320
understand that because you’re getting heat
from your boss but this is why they’re doing it

00:43:10.960 –> 00:43:15.920
and they’re not buying it exactly in your
time frame and you know i think the the you

00:43:15.920 –> 00:43:21.040
know what what’s the um saying it used to be
take someone from a transactional relationship

00:43:21.040 –> 00:43:25.680
to a customer-centric relationship i think it’s
sort of the similar thing here that some of the

00:43:25.680 –> 00:43:30.640
sas companies are still on transactional right all
it is is just selling ironic right because they’re

00:43:30.640 –> 00:43:35.280
supposed to be subscriptions that’s the whole
point of them and they’re so bad at it and they’re

00:43:35.280 –> 00:43:38.880
almost and unfortunately some of their incentives
are based that way and some of them like the

00:43:38.880 –> 00:43:44.400
report quarterly to the market i get it like
you know the code company were you know really

00:43:44.400 –> 00:43:48.560
tough on hitting their numbers because they didn’t
want to go to the market every quarter and and say

00:43:48.560 –> 00:43:53.200
sorry we’ve missed a number no it’s 100 anxiety
it’s about hitting targets and that’s what comes

00:43:53.200 –> 00:43:57.840
down and anxiety rolls downhill and these people
who are doing it a lot of them are self-aware like

00:43:57.840 –> 00:44:02.240
but they have no like what are you gonna do
the numbers still gotta have to get hit right

00:44:02.240 –> 00:44:07.040
and so with like there’s there’s a great
thing in parenting can’t versus won’t like

00:44:07.040 –> 00:44:10.640
it’s not that they it’s not that they won’t do
it just that they can’t do it like they don’t

00:44:10.640 –> 00:44:15.120
know how or they’re constrained by other
things like a lot of a lot of people know

00:44:15.120 –> 00:44:20.080
that you know this is obviously what to do and
this is why we’re doing these podcasts is not

00:44:20.080 –> 00:44:24.560
i tease them but like really what we’re trying
to do is like is there a is there an equally easy

00:44:24.560 –> 00:44:29.920
way to get to a better result and it’s actually
that’s the last thing i should ask you uh before

00:44:29.920 –> 00:44:34.160
you sign off like is there any advice you give
to a sas company who trying to figure it out that

00:44:34.160 –> 00:44:39.600
you know there’s a there’s just an easy way easier
way of engaging with agencies what would you say

00:44:39.600 –> 00:44:43.760
to them that’s spending a day in their life or
the week in their life or whatever so i think

00:44:43.760 –> 00:44:47.440
really understanding it from a partner’s point
of view i think that that definitely helps

00:44:47.440 –> 00:44:50.800
some do it better than others i think hubspot
are doing a good job of that at the moment

00:44:50.800 –> 00:44:56.320
so i think that helps and then the other one is
that um you know the the alignment of kpis right

00:44:56.320 –> 00:45:01.200
so in the co company they used to want to sell
leaders and we used to want to make profit right

00:45:01.200 –> 00:45:08.640
so leaders is licenses now so how can you change
the kpis for your internal people to actually

00:45:08.640 –> 00:45:13.920
um better value the relationship of a partner
and what value they bring to the overall value

00:45:13.920 –> 00:45:20.160
chunk yeah so smart i think you’re on the most
like 360 people i met in this whole space um

00:45:20.160 –> 00:45:25.680
and i loved your coca-cola experience for so many
reasons but it’s like if you live in the outside

00:45:25.680 –> 00:45:30.480
sass you know how actual valley chains work and
like it’s part of it i just feel we’re just like

00:45:31.200 –> 00:45:34.880
bashing your head against i mean because it’s been
20 years the industry has been disconnected from

00:45:34.880 –> 00:45:38.720
the license software industry they just don’t know
what it used to be like license software is all

00:45:38.720 –> 00:45:42.880
like the same it’s exactly microsoft and coca-cola
they learn from each other you know they really

00:45:42.880 –> 00:45:47.840
did like they’re almost like they have the same
they’re like they just go in and out those two who

00:45:47.840 –> 00:45:55.200
who is um uh buffett’s best friend bill gates yeah
buffalo 10 percent of coke right so so we look at

00:45:55.200 –> 00:46:01.120
it like if you look at those conversations when
you know you know bill and warren and um steve

00:46:01.120 –> 00:46:06.240
jobs used to get together right they all spoke
about business models and how they worked etc and

00:46:06.240 –> 00:46:11.200
yeah exactly the biggest surprise to me was just
i’d love someone to do a calculation of what

00:46:11.200 –> 00:46:16.480
warren buffett would be worth now if you had have
actually backed tech earlier but he didn’t want to

00:46:16.480 –> 00:46:22.240
because he was so crazy and so i think there’s
something right about that assessment like tech

00:46:22.240 –> 00:46:26.880
is like well he just never wanted to how are
you guys doing anything yeah he said he never

00:46:26.880 –> 00:46:31.920
wanted to be in something that um he didn’t fully
understand but and he didn’t the more important

00:46:31.920 –> 00:46:36.800
thing is he said i didn’t want i want to invest
for a lifetime and he said some of the models i

00:46:36.800 –> 00:46:42.320
just don’t think they’ve been around long enough
to prove so i think in 2016 he invested in apple

00:46:42.320 –> 00:46:49.360
so actually the company’s made the most money out
of is apple uh in his total portfolio but he took

00:46:49.360 –> 00:46:54.320
10 well yeah it took nearly 10 years for
him to look at the apple model before he

00:46:54.320 –> 00:46:58.560
bought him or even apple’s model is relatively
simple because they’re basically coca-cola because

00:46:58.560 –> 00:47:04.880
they’re selling handsets right devices computers
hardware um the cloud stuff for apple they’re

00:47:04.880 –> 00:47:10.480
recurring services i think they’re just whipped
cream and cherries on top of the coke yeah correct

00:47:10.480 –> 00:47:15.040
but but they’ve got that recurring right like
every time someone subscribes to some of their

00:47:15.040 –> 00:47:20.800
music and all of that right that that is which is
the spotify model that is the recurring revenue

00:47:20.800 –> 00:47:25.920
piece and i think that’s like you said there’s
still an opportunity for that um all right awesome

00:47:26.480 –> 00:47:30.800
so how do people find you before we go
yeah so paul higginsmentoring.com and if

00:47:30.800 –> 00:47:34.720
you want to find out more about the cloud
consultants collective it’s a free slack

00:47:34.720 –> 00:47:41.120
group as i said you just go to paul dot com
forward slash ccc but it’s also in the home

00:47:41.760 –> 00:47:47.520
bar of the website as well a vendor is welcome too
or are you going to kick them out uh no vendors

00:47:48.080 –> 00:47:53.760
perfect agency as it should be correct correct
well we’ll talk to vendors and we’ll help vendors

00:47:53.760 –> 00:47:58.880
but uh no we want to have no agencies because you
said you’re you’re representing their voice and

00:47:58.880 –> 00:48:05.040
so the sas vendors need to get out of there so you
can actually coordinate okay which is good it’s a

00:48:05.040 –> 00:48:09.760
good thing thank you so much this is amazing thank
you so much for the greatness yeah thanks sunit

00:48:16.400 –> 00:48:18.080
for more great insights on partnerships and

00:48:18.080 –> 00:48:22.720
software like and subscribe and
we’ll see you in the next video

higher margin retainer agency

Want a FREE ebook?

How to build higher-margin retainers

Our goal is to make running your agency easier, better, faster, and cheaper.

And one of the ways you can do that is through building in higher-margin retainers
for your services.

Here’s a free ebook on us to help you scale!


You might also like

  • Agency Connect Podcast

    Alex Vasquez from Digisavvy Shares Insights into Marketing Agencies on Agency Connect https://youtu.be/IPKoQxvUT20 More info: Alex from DigiSavvy joined us at the Agency Connect podcast. Thank you Alex from DigiSavvy for your candid and honest story at another Agency Connect podcast. Learn More About Managing Subscriptions Get your digital subscriptions and services under [...]

    Posted on
     January 11, 2023 
    Connor Clayton
  • Agency Connect Podcast

    Stefano Mini from Active Powered Shares Insights into Marketing Agencies on Agency Connect https://www.youtube.com/watch?v=zJiWLPqJGz4 More info: Stefano from Active Powered joined us at the Agency Connect podcast. Thank you Stefano from Active Powered for your candid and honest story at another Agency Connect podcast. Learn More About Managing Subscriptions Get your digital subscriptions [...]

    Posted on
     January 5, 2023 
    Connor Clayton
See all posts

Get new posts to your inbox

Growing successful service revenue in a subscription economy.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.