How to Increase Profitability By Charging What You're Worth

Do you know the value you provide to your agency clients? Is your agency getting paid what you're worth? Do you always ask for the budget before presenting a proposal? Stephen Brown used to think that just doing good work would get clients to pay the right value, but his position at Cookerly PR, a public relations agency based in Atlanta, helped him understand a lot about charging what you're worth and how to ask the hard questions to determine if you are budgeting the right way. Today he sat down with Jason to discuss how to charge what you're worth by understanding the value your agency provides, how to get your first big clients, how being rich in process will help you keep your deliverables consistent, and much more. 3 Golden Nuggets Charging what you're worth. Stephen used to think that just doing good work will get clients to pay what he’s worth, but eventually he learned that he needed to have a sense of that worth first. You should always have a pulse on your industry and an estimate of what others in your sector are charging. Also, one of the most important things he learned with experience is that you should always ask for a budget or at least a minimum amount of what the client is expecting to spend. In Jason’s experience, less than half of agency owners do this. Getting the bigger clients. A lot of small agency owners want to know how they can get their first big client. It depends. Some of our guests did so through connections in the business, others target a couple until they get a big brand. Stephen believes that doing great and consistent work will lead you to the bigger brands you want to be working with. “Start small,” he advises,  “and it will start laddering up”. Start with something you can handle. People will start seeing what you did for a smaller brand and start and ask if you could you pilot that for our bigger brand. Keeping deliverables consistent. According to Stephen, his agency is very rich in processes, which is a big part of how they can keep their deliverables consistent. Things don’t change depending on who is in charge of a certain department. Instead, everyone is kept accountable and communicates new developments in their weekly meetings. Also, at the end of the month they send each client an account summary that contains details about each campaign being put together so that no client will ever have to ask what is their agency doing for them.      Sponsors and Resources E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Are You Charging What You're Worth? {These transcripts have been auto-generated. While largely accurate, they may contain some errors.} Jason: [00:00:00] All right. What's up, agency owners? Jason Swenk here and I have another amazing show for you and an amazing guest where we're going to talk about how do you know what to charge? And charging what you're worth and budgeting and making sure that you're extremely profitable. I have a great person on that's going to get into this so let's jump into the show. Hey, welcome to the show. Stephen: [00:00:27] Jason, it’s a pleasure. Wonderful to see you. Jason: [00:00:30] Yeah. Awesome to have you on. So tell us who you are and what do you do? Stephen: [00:00:34] Absolutely. So I'm Stephen Brown and I am the President of Cookerly PR. We're based in Atlanta, so we're a one-city agency that represents national campaign. So we do a lot of national and global work, but we are strictly based in one city and have our staff of about 22 here that do crisis work and creative work, depending on which client you've got. Jason: [00:00:57] Awesome. Well, let's get into it because, you know, we were talking kind in the pre-show, you know, a lot of my mastermind members when they come in or a lot of agencies when I chat with them I find out they're not charging enough. They're really bad at budgeting and really they're not profitable. And you guys are extremely profitable, which congrats on that. So what are some things that you've learned over the years in order to do that right? Stephen: [00:01:21] Sure. Well, the naive me, the one that worked at a bunch of multinationals over the years was always like, oh, just do good work. Do good work and the money will follow. And I learned my lessons over the years and under the tutelage of Carol Cookerly at our firm, learned a lot about charging what you're worth and actually stepping back and asking all the hard questions to determine if you are budgeting the right way for a project. For instance, we do some work that is project-based fixed fee base that is very predictable. Um, it can be a media relations or social media campaign where you know you're doing it for a certain amount of time. Then we have those other things that just come out of nowhere. Yeah, the oil spill, the having to, um, help a company out of a crisis, and those are drop everything and charge crisis rates type of opportunities. And so we really have to look at the project at hand and determine with the staff that we have the people that we have, is that something that we can fit into our portfolio or is it something that we need to be charging extra, even have extra people for, um, to be able to handle it? So it's been very important for us to get our financial house in order on any type of initiative that we do. Jason: [00:02:32] How do I figure out what I'm worth and when I should actually be charging? How do you guys do it? Stephen: [00:02:37] Sure. Well, there's some sense of benchmarking. Um, you know, we have our ways of finding out what others in the industry are spending. Um, as I was telling you, at one point we, we know a young lady in our, in our own city, that's charging way too little. And I think to a certain extent, you don't want to bring down the whole vibe of your industry, the entire collective bargaining power of your industry by charging too little. Um, you definitely want to have a very good hourly rate that you could actually make a good profit margin off of. And you want to have a variety of people at different spectrum. So you may have the senior, most person, the senior council all the way down to some more junior folks that might do some of the monitoring, might do some of the research, some of the early forms of writing. So you have to make sure you've got a spectrum of that in an agency, I guess, we’d be considered a mid-sized agency. And in that you have to have all those different areas represented with a price of fixed age. Jason: [00:03:29] What are some things that you guys picked up along the years about budgeting? I remember, I've chatted with people and I remember how we did budgeting before we were got a little bit smarter. I would just look at the bank account. Stephen: [00:03:44] Absolutely. I think we've found that we don't want to be the kind of agency that's the training wheels for somebody. We're better off when someone has worked with agencies before, maybe didn't get everything they wanted to, but they got the very notion that working with an agency was going to be able to help them. It was just the wrong agency. So with us, you know, we usually say like, you know, do we have a minimum amount? Because, uh, to a certain extent you're going to work just as hard for that one that is coming in under your minimum, um, as the ones that are actually paying you what it really takes to, um, to put a team together. Um, we're usually telling our clients that, you know, hey, to, to be able to do reserve a team here that's going to work all the time on your behalf, um, it's really going to be a certain amount. And that's going to be able to get you those two to three people that are going to be consistently reachable that are going to be very knowledgeable about your business, um, and an ongoing basis. You know, whereas something else that's just sort of coming in over the transom, as they say, that is something that we've not known the person before and are just starting to sort of suss out what it might be that they want to do. They might come in and say, well, we only have this much to spend. And then sometimes during, uh, you know, low economic times, you might be willing to take something like that in. But I would say before, you're willing to do that, think twice about like, you know, is it worthy of your firm's portfolio and is willing to spend what it takes to really get the job done? Jason: [00:05:14] Are you looking for a reliable partner to increase your agency's bandwidth so you can take on more projects? You know, our partner at E2M wants to help you grow your revenue, your profit margins without increasing your overhead costs. Now they are white label, web design and development agency that's been providing white label services for the past 10 years to agencies all over the world. Their team is over 120 experienced, skilled digital experts that's highly motivated to help you get more done in less time. Now they can help you in all kinds of digital areas, including web design development, e-commerce, SEO, copywriting, content marketing, and a lot more. If you're not sure whether E2M is the right fit for your agency, I want you to check out their flexible and transparent pricing model. Go to e2msolutions.com/smartagency. For a limited time, they're offering my smart agency listeners 10% off for the first three months of service. That's e2msolutions.com/smartagency. Yeah, one of the things I always train my salespeople on, I had always say, hey, you got to ask the budget. Before the pandemic, I was in New York speaking in front of like 800 agency owners. And I asked them, I said, how many people ask for the budget, you know, in the first meeting? It was about 50% of the room. I said, how many actually get it? And about another half of that, so a quarter actually would get it. So that means 75% never actually knew the budget. And I would just be like, you got to ask the budget and then come up with a way in order to be like, what are you trying to stay around? And I always would do it like, are you trying to say around a billion dollars, a million dollars, a hundred thousand? And it just worked my way down in order to figure it out. And usually 99% of the time it would work and then I chatted with Berkshire Hathaway, I think they're still in Atlanta, but many years ago, maybe like 20 years ago, they called us up for a website and I'd never asked the budget up to that point. And I pitched them a website for like 20 grand and they laughed me out of the office cause they were expecting 300 K. So then every time after that I was like, what's your budget? Stephen: [00:07:32] Yeah, there's nothing worse than finding out that you've really undersold a project. We found that out one time where we put together what we were defining as branding versus what someone else was referring to as branding and ours was sort of a early messaging, early branding, sort of several workshops. And we were competing against two others that had extended it into a six-month-long process with more focus groups than you could ever imagine. And that prospect wanted to hear that. They wanted it to take a long time and involve a lots and lots and lots of arduous activity. So we're used to a lot of public relations clients want to move fast and we want to fast-track the research to get enough to be dangerous, in some cases. And, um, but it is interesting. You know, one of the first questions we do have to ask in a prospecting call is that, do you have a range in mind? Um, do you have a budget in mind? Most of us were applauded or got into this public relations field, because we were great communicators or brainstormers are very verbal or great writers. Um, it isn't the cause necessarily we were good at calling the question for money. So that is one of the things that Carol Cookerly has taught us all that we really have to really know how the business mechanics work for a company and in doing so you really have to know who's paying for this. And how much is it worth to preserve the wealth of your company to have a public relations firm build your brand, handle your brand well? Um, it's one thing to just say, hey, let's contact the Wall Street Journal for you. It's another one to say, hey, let's contact the Wall Street Journal with these precautions and knowing that we're contacting them for a story and it could go south, you know, we're going to actually work with you to find the seven reasons why that story could be great and help you make sure that those three reasons why that story could go south don't happen. And so we're definitely having to mitigate risk and determined that we want to take an endeavor forward based on our knowledge and based on research. So that definitely takes a lot longer than somebody else who's just like, oh yeah, I'm going to just call the person I know and try it out. So it's a whole different approach to PR for sure. Jason: [00:09:38] Kind of switching topics just a little bit outside of budgeting, but you guys have worked with a lot of big, big companies and a lot of people want to know, you know, how did you start getting the bigger company? With me, it was, we targeted one or we targeted like five. We got one and then use that to get another one. What worked for you guys in order to get some of the big brands? Stephen: [00:10:05] Sure. I think part of it is just doing consistent great work. It starts leading to the things that you really love. I've always wanted to work on campaigns, companies that were launching something and you start launching a few things that maybe aren't that renowned, aren't that big of a deal. And then all of a sudden you're finding yourself launching in the big leagues. So launching Mercedes cars, you know, launching new products for some of our clients, the Georgia Pacifics or the Novellas of the world where there's a lot bigger stakes and a lot bigger environment to do so. Where you're actually gonna be, hey, could we launch this new car in Las Vegas? Could we launch this, a new aluminum recycling program at the Kentucky Derby? And all of a sudden you're kind of taking it up a few notches. So I think you do have to start off by going a little small, making sure that you can get that right with that, you know, that local restaurant before you are doing something chain-wide for a chain that has hundreds and hundreds of locations. So I'm, I think, you know, you just start with your passion, start small and it will start laddering up. People will start seeing what you did for a smaller brand and start saying, hey, could you pilot that for our bigger brand? That works well, hey, could you do that for our whole chain? And so that's the way we've seen a lot of our areas grow and people coming back to us for more. Um, we had a really great, um, event last night where we launched our Novellas client, did an event to be the official recycling partner for state farm arena here in Atlanta, uh, with the Atlanta Hawks. And, um, you know, it was one of those things where one of our clients was like, wow, this is the first time I was in sports illustrated. He'd been an athlete growing up and he's like, I'm in there for an aluminum, you know, cup, that's going to be at arenas. But the notion that that's just a Monday night for us to be able to have a great announcement like that for, um, a great company like that is very exciting. And we have some folks off this week at an electric vehicle show to be able to just show off some fantastic new innovations. And it becomes really nice when all of a sudden you've got people in multiple cities. One's launching the global water center in Nashville while the other folks were in Los Angeles and while we're doing some events in Atlanta. So it becomes very exciting to be in multiple places, um, launching, um, major activities. Jason: [00:12:25] Last question I have for you is as you're working with these big brands and you're building the team, how do you guys make sure that your deliverables are consistent? Stephen: [00:12:37] Our company is rich in process. So I think unlike a lot of places where I've been before, where it's sort of, depending on who's in charge, it could be a lot of different ways. We have a very rigorous process here. We have what's called our scheduling update and every Monday morning we get together at 10:15 precisely. And we go through everything that's in the shop. Every activity has initials by it. So everybody is very accountable to what's being done. Then at the end of the month for all of our clients we send them something called an account summary. And that's got every item, every reporter we're contacting every store that's in the works, every campaign that's being put together in extreme detail so that no one ever has to ask, hey, what is that agency getting us? So for us, we have a very, very rigorous process, um, along the way, uh, the status calls where we're pretty rigorous about our agenda. And so that helps us be able to make sure that we're always moving our clients forward and it's working well for us. Sometimes you're in the brainstorm mode where it's blue skies and any ideas is great. But when we're in that scheduling update or we're in that account summary world, we were very linear, very, very process-oriented. Jason: [00:13:47] Very cool. Awesome. Well, this has all been great, Stephen. Is there anything I didn't ask you that you think would benefit the audience? Stephen: [00:13:54] I would just say that those of us in PR at agencies, marketing firms, we're all looking for those folks that have great writing skills. We're looking for those folks to have great media relations, social media, marketing, research, content analytics. And I would just say that, um, you want to look for people in your firm that, uh, possess a lot of different side passions as well. So as we been looking for people lately, it's been folks who have all the aforementioned skills or some of those in great abundance. But there's also folks who have just a lot of interest in life. And we've got folks here who are sports experts, movie aficionados and a voracious readers, voracious athletes. And that's just very important to be able to pull off what we do for companies, um, day in, day out. And so I think that's the greatest thing is like recruiting this next generation is going to require people who have the direct skills, but also have a lot of, um, a lot of side passions to bring to those great brainstorms and those great campaigns. Jason: [00:14:52] Awesome. What's agency website people go in the checkout the agency? Stephen: [00:14:57] Sure. So you can find Cookerly PR at cookerly.com. So it's C O O K E R L y.com. Carol Cookerly is our founder. So that's where the name came from. And, um, we're 30 something years in business and look forward to working with a lot of new folks. Jason: [00:15:12] awesome. Well, thanks so much for coming on the show and if you guys enjoyed this episode and you would not want to miss out on any other ones, make sure you guys subscribe. So you hear the amazing guests that we have. And if you want to be around amazing agency owners, I mean, literally the best of the best, where they're constantly sharing, what's working and what's not working and being able to see the things you cannot see, make sure you go to digitalagencyelite.com. This is our agency mastermind that might just be able to help you out and might be getting you to the next mountain summit that you need. So go there now. And until next time have a Swenk day.