In this episode, Chip and Gini address a listener’s question about the opportunities for growing an agency through outbound sales. They discuss the challenges of outbound sales, particularly in a small agency environment, and highlight the importance of building relationships and a strong brand.

Both suggest that agency owners focus on networking and proactive relationship-building rather than traditional cold calling. They emphasize a multi-faceted approach to business development that includes content marketing, warm introductions, and maintaining an active online presence.

Ultimately, they advocate for a shift in mindset from outbound sales to relationship cultivation to achieve sustainable agency growth.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, today we have a question from a listener that we thought we would answer.

Gini Dietrich: Woohoo listener questions. I love it.

Chip Griffin: We like it when people listen to us and we like it when people ask us questions, so

Gini Dietrich: that is true.

Chip Griffin: We’ll cater to that today.

Gini Dietrich: Shall I read said question?

Chip Griffin: You shall read, said question.

Gini Dietrich: Maybe I’ve just missed it when you’re covering this in your podcast, but what opportunity do you see for growing an agency through outbound sales? When I’ve listened to your podcast, I get the impression that you’re more in line of thinking that in the agency world, it’s more about becoming known and then they will contact you when they have a need.

It’s super good question.

Chip Griffin: First of all, I appreciate the very dramatic reading of that question. Welcome that you just gave us.

Gini Dietrich: You’re welcome. Thank you. I practiced.

Chip Griffin: You practiced.

Gini Dietrich: Practiced. I did.

Chip Griffin: In your head, because we just saw that question a short time ago.

Gini Dietrich: I read it out loud once before this.

Chip Griffin: You did, you read it out loud one time and I said that sounds like a good question to address and so we shall. So outbound sales, what do we think about that, Gini?

Gini Dietrich: Well, I will say. In my experience, it is challenging to do that. I’ve hired, and maybe, maybe we should separate this into two pieces, which is hiring people to do outbound sales for your agency versus you. And then whether or not it works. But I’ll say it, it is challenging and I have found that it’s…

That you have to be top of mind and you have to build a brand, and you have to build relationships, and you have to network so that when there is a need, they come to you first, right? Because not everybody’s going to have a need. All the time, every month or every week to hire an agency. So I have found that inbound marketing and you know, all of the things that you’re doing to build your brand and network and, and be top of mind are the things that work the best.

That’s not to say outbound sales doesn’t help with that, but it is more challenging I think for what we do for a living than just, you know, other businesses that can hire sales teams that just make cold calls.

Chip Griffin: Yeah, and I, I think that that part of this, as you suggest, does come down to, to how we’re defining what outbound sales is, because there’s what outbound sales is, there’s who is doing it.

I, I think the, the either outsourced outbound sales or the hired outbound salesperson. I, I really haven’t ever seen that work in a small agency environment. It’s sort of the dream that you can just go hire somebody and they’ll, you know, they’ll, they’ll bring people in and you’ll just, as the owner, you’ll close them.

But I, I, I cannot think of a single situation that I’ve seen that work in for a small agency. I’m sure it has. So, I’m, I’m, and I’m sure that, that some listener is gonna say, well, it worked for me. Great. It, there are certainly those cases, but it is, it is uncommon that you can have someone else who’s doing your sales and it is all outbound and it actually has results.

So let’s, let’s dismiss that piece of it. But you as the owner, I think there is a role for outbound sales, depending on how you describe it.

Gini Dietrich: Right.

Chip Griffin: And, and to me it’s less about outbound sales and it’s more about outbound building of new relationships. Mm-hmm. And I think that there is absolutely a case to be made for you to be proactively trying to generate relationships.

With new people as opposed to just waiting for them to come to you based off of the content that you’re putting out on social or your blog or your email or that kind of thing. But to me it’s, it’s not, I don’t think of that necessarily as sales in the purest sense, because to me, I think when you talk about outbound sales, that really is trying to go to someone and try to, to generate the need for a conversation around sales. And that shouldn’t be what it is because that is rarely to your point, the case because timing isn’t right many of the times.

Gini Dietrich: Right. Yeah, I think, I think you’re right. I think it depends. Like if you told me I had to sit down and make cold calls to our target audience, it, it would just never happen.

I would never do that. That’s considered outbound sales. Like I have a niece. Sure. That’s what she does. She works for an agency. A large, large agency and they have in-house sales reps that call. Constantly. That’s what they do. That’s what she does, and she’s fairly successful at it. But that is not, never, never anything that I would do myself, right?

Just because I’m not comfortable with it and it’s never the structure that I would place inside my agency. So that is what I would consider outbound sales. I don’t consider networking and building relationships and ensuring that we are top of mind when they’re ready to make a decision or when they’re ready to hire outbound sales, even though, I guess technically it is. I would consider that more networking and relationship building, right?

So I think you’re right that you have to define what that means, but all of those things have to happen. And when you run a small agency, you are the salesperson. Yes. Whether or not you have somebody helping you, you are, you are the salesperson, and my CFO says this to me all the time. He’s like, your job, you have two things to do.

Build the brand. Direct the revenue. Build the brand, direct the revenue, build the brand, direct the revenue. And I’m always like, so anytime I go to do something, he’s like, is that building the brand or directing revenue? And if it’s neither of those two things, I have to delegate it.

Chip Griffin: Yeah. And I mean that’s a, that is a reasonable viewpoint to have.

Mm-hmm. And I think that… I mean, look, I think cold calling is for, even for large agencies, I wouldn’t generally encourage it, but I suppose at some point you’re large enough that you can just throw dollars at it and it doesn’t even matter. Right. And you know, you’ve got enough of a brand reputation to begin with that, you know, perhaps that will shake some things loose. But you know, anytime you’re doing outbound, I would always prefer it to be more targeted than traditional cold calling.

You know, not just getting a list out of some list broker and just working from top to bottom. Instead, you, you wanna reach out with personalized outreach to folks and, and leverage that. And I think if you’re doing that kind of outbound and it’s, and it’s designed to build new relationships either for people who can refer a business to you or who might become a client at some point.

I think that’s a, a useful portion of your business development mix. I don’t think it should simply be throw content out there and wait for the phone to ring, because that can work. But, you know, doing more to fuel it yourself is beneficial. I, it, to me, that’s just not, that is not classic outbound sales in the way that most people would think of it.

And if you went and hired someone to do outbound sales for you, they would likely be thinking of it.

Gini Dietrich: Yeah, that’s absolutely right. Yeah, I think it’s, if you can be thinking about how do I build relationships. How do I get introductions, warm introductions to people that I want to meet? How do I nurture those leads through content and through speaking engagements and webinars and things like that?

And how do I stay top of mind? That’s from an agency perspective, I think those are the right things to focus on.

Chip Griffin: Yeah, and to the extent you’re doing any kind of outbound, whether it’s outbound sales, outbound networking, whatever you wanna call it, it is helpful to have a visible online footprint to refer back to.

Gini Dietrich: Yes it is mm-hmm.

Chip Griffin: So that when someone googles you to look you up or clicks a link, they, they not only see who you are and understand a bit about your background, but they also understand your perspectives. And I think far too often we, we don’t do enough as agency leaders, generally speaking, to share our viewpoints using the various platforms that we have.

That’s a huge missed opportunity because that is how you set yourself apart from others. That is how you demonstrate your expertise before you even have the first meaningful conversation with a prospect and, and they start to get to know you that way.

Gini Dietrich: Yeah, absolutely. I think, yes. I mean, it is wonderful when somebody calls and says. We, you know, we’ve been reading your blog or we’ve, we found your article, or we follow your LinkedIn newsletter, or whatever it happens to be. It’s wonderful when those things happen, but you can’t predict it. And I think that’s the hardest thing about growing an agency is that you can’t predict growth if you’re solely reliant on referrals.

So you have to be more proactive about it so that you can say, okay, like we, we set very aggressive goals every year and usually it’s a revenue number, but it’s also a number of new clients. And then we kind of, we break that down, right? So I know exactly who I need to be talking to, who I need warm introductions to, what kinds of meetings I need to be having, what kinds of content I should be sending or creating to stay top of mind with those people.

And that’s how you begin to predict your growth a little bit versus just waiting for the phone to ring, which I’ll admit was the way I grew my agency in the beginning. Right? And it was very slow growth. Like that’s, we would wait and sometimes some years were great because the phone rang many times and some years were terrible because the phone didn’t ring at all.

And that’s a really hard way to grow an agency. So you have to be proactive in reaching out and getting in front of your target audiences.

Chip Griffin: Yeah. And, and even with those things, it is often very difficult to predict your growth as a small agency, right? Yeah. Yes, yes. I mean, because as a small agency, you know, a deal here, a deal there makes a giant difference in what your year looks like.

Yep. And so, and, and you just simply, you’re not doing enough volume that you can absorb that, you know, one or two deal difference. That’s, that’s even if you’re run, executing everything absolutely properly and, and doing all the outreach and tracking your pipeline and staying in touch with people and all of that.

So the more that you do, the more likely you are to be able to obtain those goals that you’re trying to, to achieve. And so you need to be thinking about. What is the mix of things that will help get you there? And I think that’s, that’s ultimately the message. The takeaway that I would encourage people to have is don’t rely on any one tactic.

Don’t rely just on outbound. Don’t rely just on content. Don’t rely just on referrals. It’s having that mix of things that will tend to stabilize those peaks and valleys that we’re all so familiar with in the small agency world.

Gini Dietrich: Yeah. And I think you also need to include things. I’ve, I’ve mentioned this a couple of times, but warm introductions.

Mm-hmm. So look at people that you want to meet and then who you know in common, and I mean, my team and I do this every week. We go through and we say, okay, who do we know in common? And then we split it up just to ask them for introductions. Sometimes it works, sometimes people are like, ah, I didn’t really, I don’t really know that person.

I’m just connected with them on LinkedIn, which is fine, right? But if you, if they know them well enough. And you have a good enough relationship with the person you’re asking, they’re almost always going to make a warm introduction for you. And it’s just, you know, having a 15 minute conversation just to understand what their pain points are, if they have an agency, whether or not they’re happy, like those kinds of things will help you determine how you’re going to nurture those leads until they’re ready to make a decision.

And those are the kinds of things you should be focusing on. And I guess that could be considered outbound sales.

Chip Griffin: Sure, but I, but I think that, that taking away the pressure of trying to make the sale in that conversation or, or even

Gini Dietrich: Yeah, yeah.

Chip Griffin: You know, open the deal conversation, if you will. I, I think taking that pressure away helps you, it helps them and, and if you’re going about things saying, Hey, this is just someone I want to get to know.

It might turn into business directly or indirectly. But either way, it’s someone that I’m, I’m interested in getting to know more, getting their perspective. It can be good market intelligence, just having these conversations. Yep. And so if, if you go into it that way, you’re more likely to meet success than if you’re sitting there saying, oh, this was a failure.

Because they’re not looking for an agency right now. They’re happy with their current agency or they just don’t use agencies or whatever. That’s, you know, you still can get a lot of value out of that discussion, short of them immediately going into your proper pipeline.

Gini Dietrich: Yeah. And I would, when you have those quick introductory meetings, listen for things that you can use later. So I had a call last week that I’m really excited about. It’s probably not gonna come to fruition until quarter two of next year. But during that conversation, she told me three or four things, pain points that they have, where I’m like, okay, that’s good to know.

So now I have that in my CRM and every few weeks she’s gonna get an article from me, a book from me, a podcast to listen to, you know, things like that. Just, you know, hey, thinking about you, I know this was a, this was a challenge for you. Here’s how somebody solved it. Like that kind of stuff. It works incredibly well.

Chip Griffin: Yeah. And, and I think you hit the nail on the head there by, you know, talking about getting information, asking questions. We say this all the time, but don’t go into these trying to sell yourself. No, don’t go into it trying to talk as much about all the great stuff you do and all the great ideas you have.

You want to go into these conversations, particularly with someone who doesn’t know you particularly well and, and they haven’t even come to you looking for your service. Ask them questions. You can show that you’re smart by asking questions. You don’t have to do it by talking every about what your actual expertise is.

Yes, and the more that you ask questions and the more information that you gather, the more likely you are to be able to walk away from that with value, regardless of whether or not they turn into a potential deal.

Gini Dietrich: I always laugh when I go to a meeting like that and all I do is ask questions, and at the end or later they say, gosh, that meeting was so good.

It was so productive. You’re so smart. And I, and I laugh because literally all I did was ask questions. That’s all I did. But when you ask questions, you get them thinking about things they may not have been thinking about or different solutions that they may not have considered, and now they think you’re really smart. Because you’ve brought that to the forefront of their minds.

So you should absolutely spend the time in those introductory meetings just asking questions because they will think you’re far smarter that way than if you pontificate or talk about all the great things that you’re doing and bore the crap out of them.

Chip Griffin: Yeah. And, and, I mean, I, what I love hearing is, you know, I, I had never really thought of it that way before.

Let me think before I give you an answer. Yep, yep. Right. Because, because that, that truly does mean that you’ve caused them to think about things in a different way. And, and that is the strongest way to make an impression on somebody. Because if, if you go in and you ask the same seven questions that every other agency asks, every other sales person asks, that doesn’t really, you know, the silly questions like, well, what, how much would it be worth to you if I was able to improve your email open rate by 10%?

Who cares?

Gini Dietrich: Not worth anything!

Chip Griffin: Who cares?

Gini Dietrich: Right.

Chip Griffin: I mean, I just, that, that kind of, those kinds of questions just drive me bonkers. And so if it’s a, if it’s a question that comes from your actual curiosity,

Gini Dietrich: yes.

Chip Griffin: Those are good ones. Yes. If it’s a question that comes from some list that you got from chat GPT or some sales advisor or anything like that, chuck it.

Get rid of it. Yes, yes. Use your own curiosity. Yes. Leverage what you want to know, because that makes for a more natural conversation, but it also tends to show the expertise that you actually have.

Gini Dietrich: Yeah, and one of the things I like to do is, you know. They’ll say something like, oh gosh. One of the, one of the challenges we have is that, lemme think of something real quick.

Um, I’m on the comms team and our marketing team handles shared and paid. And so I really believe in the PESO model, but I don’t have, I only control earned and owned. And. So I’ll ask a bunch of questions that lead them to the idea that they could actually work with their marketing brethren then not work in their silos, right?

But they come to that conclusion on their own, right? And then I’ll say, you know, when we, when we worked with a client on that kind of problem, here’s some things that we considered. And then they go, oh, and they start to see themselves working with you in just by the way you’ve presented that. Yes. So it’s a different way of approaching it, but it works incredibly well.

Chip Griffin: Yeah, I mean if you, if you treat people like you would treat a client. And generally speaking, for the most part, I don’t think most of us are just sitting there yapping at our clients, you know, for the full 30 minutes that we’re meeting with them, just telling them how great we are and, and you know, what they need to do and all that.

We have much more of a back and forth. And so I think if we think of whatever kind of outbound communications that we’re doing, whether you wanna call it sales or networking or whatever, the more that you treat it like you’re having an actual client conversation, the more useful and productive they will be.

In helping you to get to your eventual goal. But you have to set aside this idea that this is all about immediate revenue. And, and unfortunately when we hear about outbound sales, it’s, you know, we’re always thinking about, well, how can we, how can we shake that money tree and, and get some deals going?

And, and we often think about doing these things when we’re most desperate. Right. When we’re looking and, and we see, okay, we had a big client go away. We need to, we need to replace them. And we’ve talked about the fallacy of, of that idea that you can just replace a big client when they go away.

But you need to be thinking about these things in a, in a much longer time horizon. More of a relationship building mindset. And if you do that, inbound works, outbound works, a hybrid works, they all can be part of the puzzle solving device.

Gini Dietrich: Yeah, absolutely. And I think. It if you think about it a little bit differently and shift your mindset around it a little bit.

So instead of it being about outbound sales, which I think is scary to a lot of us, it’s scary to me. You think about it as networking and building relationships and being top of mind, being there when they’re ready to make a decision. It’s less scary, I think, because that’s what we do, right? We are relationship builders.

So think about it from that perspective. It’s just a different audience. And if you can do that, if you can shift your mindset around that, I find, I think you’ll find much more success than if you’re thinking about it from an outbound sales perspective.

Chip Griffin: Absolutely. So on that note, I would, I would like to thank our listener for making an outbound inquiry of us for our perspectives on this.

That was a little tortured, but what, what’s new? I was trying to think of some way to, to circle it back. But anyway.

Gini Dietrich: Thank you. And we always appreciate listener questions.

Chip Griffin: Always appreciate listener questions because it, it helps us to really speak to the things that that matter most to you.

And hopefully that’s what we’re doing here as much as possible. Giving you practical advice and, and our thoughts and, you know, take it for what it’s worth. Sometimes it’s useful, sometimes, eh. But all the perspective helps you. That’s the same thing with the outbound conversations you’re having. Have as many as you can, get those different perspectives and then figure out what works for you.

So on that note, I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich

Chip Griffin: and it depends.

In this episode, Chip and Gini discuss the impact of AI on small agencies, focusing on the high expectations and possible disappointments it poses. They reference a recent article from The Atlantic, which highlights a study showing that AI can sometimes decrease efficiency.

They caution against overhauling business models based solely on AI’s current capabilities, stressing that while AI can assist with tasks and improve efficiency, it cannot fully replace human judgment and creativity.

The conversation extends to the challenges of integrating AI without sacrificing the development of new talent and ensuring that the evolving role of AI adds value rather than causing disruption.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I am Gini Dietrich.

Chip Griffin: And Gini, I think, you know, I think AI is gonna solve all of my problems. We’ve said this before, but I, I really, I’m gonna change my whole business model around it.

Gini Dietrich: I think you should fire everybody.

You could fire me as your co-host. AI can just do it for you.

Chip Griffin: You know, I mean, I wonder if the AI would talk back less.

Gini Dietrich: Probably, although if I program it, I’ll program it for you so that it, it talks back a sufficient amount.

Chip Griffin: Excellent, excellent. Just, just what I need.

Gini Dietrich: You’re welcome.

Chip Griffin: Oh, at least, you know, maybe, maybe the AI wouldn’t yawn at me like you did just before we started recording, so

Gini Dietrich: I shouldn’t even be tired either.

I got nine hours of sleep last night. I don’t know what my problem is,

Chip Griffin: I assume you were expressing your boredom with me.

Gini Dietrich: No. Prior to the start of the show. No.

Chip Griffin: I mean, usually it takes a couple minutes for most of our listeners to get that bored with me. So

Gini Dietrich: no, I’m not bored with you.

Chip Griffin: Okay.

Gini Dietrich: Just sleepy.

Chip Griffin: Just sleepy. Well, I’m with you on that. Alright. But we are gonna talk about AI and in particular, there was a good article in the Atlantic recently, that is consistent with some of the things that I’ve been saying and talking with clients and, and I think it’s, it’s helpful to think about. And that is whether or not there is an AI bubble and what it means.

And it’s not, in my view, it’s not so much about a macro AI bubble, sort of like we think about, you know, the, the internet bubble in the early 2000s and, and I think there is certainly some of that, but that’s really more about investing in some of the businesses and infrastructure and that kind of thing.

But I think for small agencies, there is the potential for an AI bubble that comes about because we all get too focused on either what kind of threat AI is or what kind of opportunity AI is. And we’ve said before on this, we’ve talked about AI a lot, so I, I was a little reluctant to come back to it, but I think that thinking about it in in these terms may be helpful.

Because it’s not, it’s not about AI being either the panacea or evil, it’s that we may be adjusting our models too much too quickly because some of these things may not quite be there. And in particular, the Atlantic had a great example and it was from a study that was done with some software developers. And the software developers were given AI to help them do their jobs. And the purpose of the study was to try to figure out was it a 20% efficiency improvement, 40%, 60%, what was it? And ultimately what they discovered was it was actually, it decreased their efficiency.

Gini Dietrich: Mm-hmm. Mm-hmm.

Chip Griffin: Because part of the challenge with AI, and I, I’m sure many of us have seen this, is when it works well, God, it works great.

It just, and, and we’re impressed and we’re, we sit there and say, that’s amazing. But we, we don’t factor in the times it doesn’t work and the times we have to argue with it and fight. Right? And so if, if we’re go, and I, I mean I do this a lot with, I mean, maybe it shows something about me that I argue with the computer.

I was trying out Gamma recently, which is a, a service that lets you build PowerPoint decks effectively. And I threw something in, just kind of randomly grabbed an outline, threw it in, and it actually did a really nice job of creating the first thing that I sent to it. And I’m like, that’s great. I’m like, okay, well can you make these modifications to it?

And it just wouldn’t do it. It just, it, it kept, you know, I, I said, can we put, you know, my logo at the bottom of the slide, you know, in the footer. And so it puts it in, it’s like a quarter of the screen. I’m like, no, no. I said, can you make it smaller,

Gini Dietrich: same size, just move it.

Chip Griffin: And it’s like, great, that’s a great idea.

Let’s make it smaller. And it gives it to me the exact same size. Oh. And it makes it completely unusable because obviously you don’t really want your company logo to take up a quarter of the slide. That’s just dumb. So I, I think we need to, to think about all of the effort that we’re putting into AI and factor that in when we’re thinking about our own efficiencies, because I’m afraid that some people may be changing their models too much, changing their pricing too much. Because they’re looking at the successful implementation of AI and not factoring in all of the challenges along the way. At least as it exists in September of 2025.

Gini Dietrich: Gartner has their hype cycle, right? And so it looks at things from that perspective. And, you know, we get really excited. We’re human beings. We get really excited. There’s something. Coming. There’s like all this like, oh, that’s scary. We’re not gonna do anything. Then we get really excited about it. Then it dips down and then it comes back up before it’s like scalable and, and something that we use.

The internet was one, email was one, social media was another, those kinds of things. Right. Well, in the hype cycle, AI is now in the trough of disappointment. So it’s in that section of the cycle where it’s like, oh. Maybe this isn’t gonna work so well. And you have companies like Salesforce who just laid off 30,000 people.

Because they think AI is going to replace those human beings. And what they’re going to find in the trough of disappointment is that that’s not the case. And I think that we have to think about that. As you know, we’re certainly, I’m not laying off 30,000 people. You’re not laying off 30,000 people. I would imagine most of our listeners are not laying off 30,000 people.

But you have to think about it from that kind of perspective of AI is great for some things. It cannot replace human beings yet. So when you think about how you’re using it, those are the kinds of things you have to consider. One of the things I say to my team all the time, I, I’ll get something from a team member and I’ll be like, did you use AI for this?

And my favorite is when they’re like, oh, just to outline. I’m like, really? ’cause on the third page, the sixth bullet point, it’s definitely AI. And I know that because you didn’t, it’s, it’s talking to you, right? And you didn’t edit it. So it can’t replace people yet. And I think though, that’s what I continue to tell my team is you can absolutely use it, but you have to use your brain and you have to edit the work that you’re getting because as a first draft, it’s crap.

It’s not good. So we have to like take all of this with a grain of salt and make sure that we’re using it effectively.

Chip Griffin: Yeah. And, and I think that, you know, part of the challenge is if, if we say, okay, well because of this we can now, you know, churn out social or blog posts or graphics or whatever that much faster and all that and, we’re building our models, we’re building our staffing models around it. We’re building our pricing models around it. It becomes a problem. Yeah. Yep. When we realize that it’s not quite as efficient, it’s still good. It’s still helpful. We still ought to be using it and some of this stuff will continue to get better.

Most of it will continue to get better, and so at some point it will get there. It’s sort of like during that, that first wave of the internet bubble in the early 2000s, there were plenty of businesses that came out, got a lot of attention, and then failed miserably only to see 10 or 15 years later an almost identical business come up and blossom because now it was time for it.

The technology was there, the market was there, and so, so some of these things, it’s not that they’re not a good idea, it’s just that they’re not quite fully baked yet. And as, as particularly as small businesses, we need to be careful about how heavily we lean into some of these things without understanding what the risk of that is and, and understanding whether it is truly everything that we believe it is in our, in our happiest moment.

And, and, you know, with the troughs of disappointment and the, the peak, I forget what the, what the peak is called, but you know, the ups and downs, we’re all gonna feel those. But, but when we’re building business models and strategies for our agencies, we need to think about that in a little bit more of a level line as opposed to to riding the waves or the dips too much because that’s where we start to make bad decisions.

Gini Dietrich: Yeah, and I think we, you see this on the, on the web all the time, right? You have people who jump onto the next wave, hoping that they’re gonna get that upswing of popularity, success, whatever it happens to be before it goes down.

And then you have, you see ’em jump on the next one and the next one and the next one. First of all, that’s a crappy way to live. Like, ugh. The constant like yin and yang and ups and downs and no agency owner should live like that. But secondly, you have to really think about what are we strategically trying to do?

And I will tell you, I, I mean, I’m sure it’s clear, but I love AI. I love it. I think it has made me more efficient, it’s made me more productive. You know what it’s done more than anything? It’s allowed me to stop procrastinating. Because when I have something really challenging, I tend, in the past, I tend to procrastinate it, put it off.

It’s a big project. It’s, I know it’s gonna take me time to get started, and so I, I put it off. I put it off. I put it off. I’m also highly deadline driven, so if you tell me it’s due in 12 hours, it’ll get done. If you tell me it’s due in four weeks. I’ll do it the last 12 hours. Right. So that’s just how I, my personality.

So what it has done is it has allowed me to say, okay, this is a huge project. I’m, I’m gonna take 15 minutes just to outline the steps so that I can get it done more effectively. I don’t procrastinate anymore because that allows me to at least get it into my workflow and get things accomplished. That’s where it’s made me most, most efficient.

So I think we have to think about those kinds of things, like how are we bringing it into our workflow to make us more productive and make us more efficient, but not replace the thinking or the creativity.

Chip Griffin: Right. And I think the other thing that we need to keep in mind is that in uses like that, where it’s acting as our assistant, I think has a lot more utility, a lot more staying power. Mm-hmm. And will just continue to improve as, as we learn how to use the technology more effectively. And as the technology continues to evolve, I think the bigger challenge comes for agencies when they see this as something that can help them do things at scale.

Yes. Right. So it’s not, it’s not assisting an individual, making them more effective, efficient, et cetera. But instead it is using it, as some companies are, to replace large numbers of human beings.

Gini Dietrich: Yep.

Chip Griffin: And I think that’s, it’s a risk for multiple reasons. One is the, you know, whether or not it is truly as good as you think it is and, and can do things without that level of supervision, intervention, et cetera, that we’re doing when we’re using it as an assistant.

But we also need to keep in mind that as we all get sucked into this, it is incredibly likely, if not certain, that all of the providers of AI are going to start ratcheting up the prices. Sure. And so what looks today like a huge cost savings likely may not be. In just a few short years. And we’ve seen this before, we saw this in the early days of internet ads, for example, search ads.

It used to be that you could, you could buy ads on, on Google search super cheap. Now, not so much. And it didn’t take all that long before it got to a place where it was so costly that it was starting to, to become much more similar to other advertising media. Right.

And so you, you need to keep in mind that it may not ever get fully to the price of, you know, the, the same productivity of a full-time equivalent, cost the same in the end, but it’s gonna be a lot more than it is today. So if, if you see it today as an 80% savings, it may only be a 40% savings when all is said and done. And is that still okay?

Would you still have uprooted your whole business model for that or not? And I can’t answer that for you, right? But I think you need to think those things through, before you invest too heavily. What’s that?

Gini Dietrich: It depends.

Chip Griffin: It depends. Everything depends.

Gini Dietrich: Yeah. I think you’re absolutely right.

Like it’s just, you know what, there’s been a conversation both in a private Facebook group I’m in and in the Spin Sucks community of late, of how people are not hiring new college graduates anymore because it kind of does replace them. Like it does replace the research, the media list development, the initial pitches, things like that that you would have, you know, an intern or a young prof, a brand spanking new young professional do.

So how do we, how do we continue that? But then how do we hire young professionals? ’cause we can’t not hire a brand new college graduate. Right. How do we bring them into the workforce and what are we, how are we teaching them? Are we teaching them to become AI prompt engineers? Are we teaching them to become better editors?

Like what are we teaching them to do? Because AI can do a lot of that really basic stuff that an intern would would normally do.

Chip Griffin: Absolutely. And, and I think that that, that becomes then a, an even bigger challenge for small agencies because small agencies have always struggled with the idea, do we hire seasoned professionals who are more expensive? Or do we hire more junior people who we can use more cost effectively?

And this does tend to skew it more in, in terms of let’s, you know, let’s hire those more seasoned, more expensive people and we’ll rely on the AI for all the lower level stuff. But that may be a challenging business model to truly make work, in part because now you’ve got senior people who then have to, to manage in a much more hands-on way with the AI.

A lot of that more basic stuff. And I would argue that it might be more worth looking at can you use the AI to improve the, the quality and output of more junior people, right? If, if you’re, if they’ve, if the junior people have an assistant, could they accelerate their own growth more quickly? And I don’t have the answer to whether that’s true or not, but it’s something that I would be interested in looking at if I were trying to scale up a small business as opposed to saying, okay, all the grunt work will be done by AI and we’ll hire just senior people, because that’s a very difficult business model to price correctly.

Gini Dietrich: I also think it’s dangerous. I think it’s dangerous to hire as, as a senior professional, I think it’s dangerous to hire only, you know, seasoned professionals because you now you’re losing out on, you know, creativity, youth, you know, like all of the, the sort of like rosy colored glasses kinds of things that help a business grow.

I think that’s, I think that’s really dangerous as well. You need, you need a balance.

Chip Griffin: Yeah. And you wanna develop future leaders for your own. Yep. Business. You know, obviously it, you know, I don’t necessarily buy into the notion that we need to do it for the good of the PR and marketing community and, you know, we gotta give them opportunities because otherwise we won’t have them in the future.

It, it really does need to be more selfish for your own business. But you can develop them within your own business so that you know, over the next, you know, four to six years, they become that seasoned professional who learns your way of doing things as an agency and can contribute in a more meaningful way to your own business.

Gini Dietrich: I think it’s, I, like I said, I think it’s dangerous to, to rely on that. And to come full circle, it’s dangerous to rely on AI to replace human beings because that’s just, while it’s tempting, it’s just not where we are yet.

Chip Griffin: No, I mean, look, I think there are, there are certain things that can be replaced by AI. So I’m not, I’m not sticking my head in the sand and saying, don’t, you know, don’t reduce any headcount. I, I think for most small agencies, probably AI is not gonna enable you to reduce headcount. It’s, it’s difficult for me to, you know, all the agencies that I’ve advised and looked at over the years, it’s hard to think of very many who could actually save even one FTE on the backs of what AI can do for them today.

Yep, yep. It certainly, it certainly can make them more efficient. It certainly can open additional doors, could free up some time. But I, I have a very difficult time seeing any where it’s a one for one replacement. But there are certainly other industries, other kinds of business where it absolutely can help to reduce the headcount, but maybe not completely replace all of the headcount in a particular function area.

Gini Dietrich: Well, to come back to the Atlantic article that you mentioned at the start, you know, it showed that it wasn’t, and you would think, you would think that AI would be really good at a developer’s job. At creating, you know, being able to do that because it’s not, there’s no creativity to it, right? And so you would think it would be really great at that.

And it found that it wasn’t. It found that they were actually spending more time directing the AI and getting the information, getting the right kinds of things out of the AI that they needed than to just do it themselves. So you, we have to be really careful here and, and like I said, I’m a huge, huge fan.

I love it. But it’s also not replacing any humans from my perspective.

Chip Griffin: And look, I mean it ultimately, even though the, the models are very good at doing the coding for programmers, it’s also, it’s a double-edged sword because for an op-ed or something, 80% is probably good enough. For code? 80% isn’t good enough.

You gotta get to a hundred percent because any bugs in there are gonna be a problem.

Gini Dietrich: Yes, you do.

Chip Griffin: And, and as someone who has written computer code before, I can tell you that, you know, even 98% ain’t all that good because you still need that other 2% and you’ll be chasing that, you know forever if you can’t figure out exactly where it is.

So. You know, there are, there is a difference in the kinds of work that it’s doing. So in some ways it was a good test of it because it’s an area where it’s strong. On the other hand, I would also argue it may not be the best because there is very little margin for error in coding because you still have to get to a, a fixed result at the end, from the logic that you’ve put into place.

Whereas in a written piece or a graphics piece, that’s good enough. Yeah. You’re, that crosses the threshold.

Gini Dietrich: Yeah. 80% is good enough. That’s exactly right.

Chip Griffin: And look, I, I mean, I think if we get to 80% good enough on this show, that’s probably, that’s probably sufficient. I mean,

Gini Dietrich: I need to buy one of those sound machines so I can do like clapping and things for you.

Yeah, I need that.

Chip Griffin: There you go. So, I mean, let’s face it, some weeks for us, 50% is probably good enough. So, yep. Before, before we drop down below that 50% mark, though, I think we’ll, we’ll draw this episode to a conclusion. This has been the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

In this episode, Chip and Gini discuss how to handle situations when the problems affecting an agency’s client relationship stem from external contacts like procurement, IT, or the sales team.

They emphasize treating client contacts as allies and not enemies, and provide strategies to navigate bureaucratic hurdles and internal politics. The discussion covers creative problem-solving techniques such as using MSAs, having biweekly calls with VPs of Sales, and understanding cultural differences. The importance of having a collaborative approach and pre-building relationships to effectively manage challenges is also highlighted.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, I’ve got this, this invisible guy over here, and he’s telling me what we need to do for this show today. And, and we have to follow it to the letter if we wanna record.

Gini Dietrich: Oh, who is it?

Chip Griffin: I dunno, but if someone, someone is telling me that we need to, to record an episode about what to do when your problem isn’t the client contact for your agency, but it’s someone else, someone off screen who’s telling them what they have to do and it’s causing problems for your relationship.

Gini Dietrich: Oh, someone like procurement or IT?

Chip Griffin: Someone like procurement. Mm-hmm. IT, the sales team.

Gini Dietrich: Mm-hmm.

Chip Griffin: The CEO.

Gini Dietrich: Mm-hmm.

Chip Griffin: All sorts of people who may not be involved in any of the day-to-day work that our client contacts are doing, but they are just involved enough that they can cause trouble.

Gini Dietrich: Mm-hmm. Kind of like me having to tell a client’s VP of sales the other day that we’re not their local Kinkos.

Chip Griffin: Yes.

Gini Dietrich: Yeah. I actually used those words.

Chip Griffin: I mean, to be fair, FedEx Kinko’s now, so you’re, you’re dating yourself, but

Gini Dietrich: I, fair, yes, you’re right. But also it got the point across.

Chip Griffin: Yes, it got the point across, but, but did it resolve the situation or did they just say

Gini Dietrich: It did resolve the situation. Okay, good. Good. I think it made him mad, but he understood that we’re not here to just print the brochures for him.

Chip Griffin: Yeah. No, that is, that is not the role of an agency. But no, a lot of times we do have these, these pressures or our, or really it’s our client contacts who feel the immediate pressure, right? They get, they get told by procurement that they have to, to find a way to cut the budget with their agency. They get told by IT that, you know, you can’t do this with email or that with your website or those kinds of things, or there are all these extra hoops to jump through and there’s no budget to pay for all those extra hoops or, I mean, just any number of different things that, that we see as agencies that we have to find some way to deal with.

And it’s tough because when it’s our client contact, we can at least have a direct conversation. But when it’s someone who is, who is literally off screen, for most of us, since we’re doing these conversations typically by Zoom these days. Someone offscreen meddling is a lot harder to deal with. So, so what is your advice to an agency owner who says, look, I’ve, I’ve got these challenges and, and my client contact agrees with me, but, but how can I help them to get this across the goal line the way we need to?

Gini Dietrich: Yeah, it depends on what it is for sure. I mean, we’ve had the situation where procurement, of course, has wanted us to reduce fees. So then it’s a conversation with the client contact to say, Hey, listen, this is what they’re asking us for. That means we’re gonna have to take this, this, and this out of this scope of work.

Typically the client contact can influence that and go down and talk to procurement or send an email or do a support ticket or whatever it happens to be, to be able to influence that. And sometimes they can even elevate it or escalate it above to their supervisor or their supervisor’s supervisor. It just depends.

But that’s usually where, usually where we start is saying If we do this, this is what it, this is how it will affect the work that we’re going to do together. And this is what you can expect. And typically they’ll, they’ll go to bat for you. So I would start there for sure.

Chip Griffin: Right. I mean, I think that that fundamentally what you’re describing is, is treating your client contact as an ally, not the enemy.

Gini Dietrich: Yep.

Chip Griffin: And, and it is tough because sometimes when we, when we hear these things, it’s, it’s often, you know, we often put ourselves in the position of wanting to shoot the messenger because that’s who we’re, we’re talking to our client contact on a daily basis. And when they tell us, you know, these are the rules or these are the things we need to do, you know, we, we can get frustrated with them, but we need to remember.

Most of the time or many of the times, it’s not them. They, they have the same view we do. And so we need to try to figure out how we can work together to overcome their internal obstacle. And it, and it does mean that, you know, we may need to make some compromises ourself. We may need to, to invest a little bit more time and energy into helping things done.

And some of that may be uncompensated time. If needed in order to, to try to, to clear these hurdles. But they are necessary hurdles to clear. Otherwise we may not be able to achieve the results or we may have to, to eliminate some of our profit margin or any number of different problems that we may run into if we’re not willing to invest in the short term in overcoming those difficulties.

Gini Dietrich: Yeah. And I would say most of the time people are pretty reasonable. You can, you can say, and usually your client contact is gonna be like, Ugh, this is so frustrating. I can’t have you reduce the scope, right? Because we need to do these things and I’m held accountable to those results. And so, you know, so it, so the…It, it rolls downhill for sure. So usually they will go to bat for you and we’ve had a couple of examples where they’ve had to go to their supervisor and say, Hey, I need you to help me push this through. But for the most part, I think you’re right. If you can use your client contact as the ally, you can usually get things done the way you need it to, to be done.

Chip Griffin: And I think the other thing we need to do is, is remind ourselves that, that these unseen actors are by and large, not bad people either. They’re just, they’re, they’re doing their job in the way that they think is best. So, so even procurement, and we all love to dump on procurement. Fairly in my view, because a lot of them are looking just at the numbers and not really,

Gini Dietrich: it’s a little challenging.

Yeah, yeah.

Chip Griffin: So, but, but we need to remember that, that they are people. And so, you know, our first instinct as, as we usually advise on this show, is to treat other people like humans. And, and if you can, try to relate to them. If you can try to, I mean, one of the things I always advise is try to get them in the conversation.

Don’t, don’t play a game of telephone because a game of telephone is hard to win. You, you can’t because you know, now you’re just trying to coach up your client contact on, on what they need to say. But you’re not part of the conversation. You’re not, you’re not sure if, if something is getting lost in translation in either direction, frankly.

Right, right. And so you really want to try to get to a place where you can get in the same room with whoever, whatever that external force is that’s causing difficulty for your relationship.

Gini Dietrich: Yeah, for sure. And I, I think that’s really good advice. I think it’s sometimes I have the tendency to wanna go directly to the source, and you also have to be careful that, that may, from a political standpoint, may not be the right thing.

So again, start with your client contact. Say, Hey, I’m happy to help you with this. Or, you know, wanna schedule a Teams call for all three of us, whatever happens to be, but… I’ve also gotten in trouble for going straight directly to the source to say, Hey, like how can we do this? So I would say, bring your client contact in as much as you can until they say, I’m happy for you to take this on, or let me schedule a call, or whatever happens to be.

Chip Griffin: Right. Or, or, I mean, I would say just the, the flip side to that is if you get all of you in a room, and I agree, that’s where you should start. If you read that room and there’s some friction between your internal contact and whoever you’re really trying to deal with, then I would try to extract your client contact sooner rather than later.

Yes, absolutely. Yes, because sometimes there’s internal politics going on or just personality differences or whatever, and so sometimes you can actually accomplish more if you, if you politely move on from having your client contact in those. It, you really have to, it’s a case by case situation.

Sometimes it’s better to have them there so they can see what’s happening and they can either intervene or translate or at least you know, know what’s going on so that they can’t say, well, I don’t understand why you’re not doing this well, ’cause, you know, so and so in procurement told us we couldn’t, or so and so in sales is pushing in this direction.

You know, you, you want to try to, to figure out what works in that particular situation. But certainly sometimes taking someone out the room who is part of the, the challenge can be helpful.

Gini Dietrich: Yeah. And you said the word translation. I think it, we have several clients who, procurement is done in another country, and so English is not their first language, and so we find that some of the, the barriers to success are because of that and not because of the other things that we assume it is. So we always try to bring in somebody who can translate between us and them. Even if they speak English, you know, English not being their first language, and certainly not the u US culture that we have. You, it’s always good to have somebody in the room or on the, on the teams call that can help kind of finagle those things for you, especially if you don’t speak, you know, the language.

And many of, many of the languages aren’t, that we face are not even like Spanish, French. They’re like Arabic, right. Or Chinese. And really, I dunno.

Chip Griffin: Well, and, and sometimes it’s not just the language, it’s the culture as well. That Right. That can impact. Right, because there are, yep. There are certain cultures where it, it may be that, that, you know, they will always demand more than what they actually expect.

’cause they’re expecting to, to have pushback and negotiation. There are others where people will just say this, this is what we need. Let’s figure out how to get there. And, and having someone internally who can help you to understand, you know, what are they really asking for? What, what, you know, is this, is this a take it or leave it kind of thing?

Or is there room to negotiate, either on, on price or activity or whatever to, to get to a, a happy place. And, and without that knowledge, that can be shared oftentimes by your client contact, it’s not just that you know, that you’re literally speaking different languages. It might be that, that there’s a lot in the, the culture that is different as well, that you need to, to grasp in order to get success.

Gini Dietrich: You raised such a good point because there are some cultures who expect negotiation, like that’s just part of their culture. So having that understanding I think is really smart. Because that will help you too, because if they’re expecting you to negotiate, don’t be scared of that. Like go into it to negotiate.

It’s kind of fun.

Chip Griffin: Right, right. And, and there are, I mean, there are, there are opportunities to negotiate. There are, you know, knowing the motivations of the people. Sometimes you’re dealing with a department that are, you know, absolute rule followers, right. You know, if you, if you, if you talk with most IT professionals for example, they’re like, well, our policy says this and, and there’s no real easy wiggle room there.

But sometimes you can have a rational conversation with them if you try to find alternatives. And instead of saying, well, we have to do that. Well, well, what if we tried this instead? Is there some other… Is there some other path that that might get us? Mm-hmm. To the same result? Mm-hmm. Or try to help them to understand why this really isn’t the risk that you think it is. I mean, I’ve, I’ve done in the past a lot of negotiations with defense contractors and those sorts of things, and they often have a whole litany of security procedures that you need to, to follow and that kind of stuff, and, and then, you know, you sometimes sit with them and say, well, look here, we’re not dealing with any sensitive information here.

Right. This is all. This is all public media information. There’s nothing here that, that needs that level of protection. So is there, perhaps, you know, can we perhaps reach some accommodation? Or sometimes procurement will say, you need to carry an insurance policy for, you know, vehicular accidents. And I’m like, well, why?

Like, I’m, I’m never gonna be driving for this contract. So that doesn’t really make any sense. And, and oftentimes that’s like construction firms, right? Where, you know, most of their vendors have some sort of a, a physical presence or something like that. And so you need to, to be able to have those rational conversations and say, okay, I understand this is your policy, but, but let’s talk through how might this actually apply to us and our situation.

Gini Dietrich: Yeah, I think that’s really smart. And one of the things that we’ve started doing is, especially with the, the big, big companies is becoming part of their network. So anything that we do, any information that we share goes through their network. We all have email addresses that are our client, that have our, that end in our client’s, URL.

We have access to their teams environment, you know, so we, we, for all intents and purposes, are part of their organization just for distributing information and nothing can come to our side, because they’re worried about IT and security. Right? And another thing is, is that we’ve, we always ask what the threshold is for financial amounts because there’s usually an amount of money that your client contact can approve without it going to procurement or to their boss or whatever happens to be.

So we always find out what that is and see if we can work within those constraints. And sometimes we split up scope of work so that it falls underneath that threshold so that our client contact is the one who gets to approve it and it doesn’t have to go through all these other hoops and and hurdles.

Chip Griffin: Right. And a lot of time it is also yet another argument for what we generally advocate for here, which is having a master services agreement plus individual statements of work. Yep, yep. So a lot of these things get dealt with just once when you do that master services agreement. That’s right.

And now you’ve got a lot more potential wiggle room to deal with issues later on. Because you’re not having to, to introduce as many people for renewals and all of that kind of stuff. And, and it’s, it’s why I’m such a big supporter of the evergreen MSA with, and just hang off individual SOWs as needed.

Gini Dietrich: Yes. Yes. I totally agree with that. We have one master of services agreement and we alphabetize our SOWs and I think we’re on AO right now for the year. So yeah, that, you know, that just tells you like how we’re able to do that without having to go through that whole rigamarole every single time. I mean, if we had to do that for all of those… I wouldn’t be able to get my day job done.

Chip Griffin: Right. Well, and and your your point about, you know, understanding, you know, what are some of the thresholds internally for things, it’s really helpful for you to, to do some of that creative problem solving with your client contact. And when you run up against an obstacle, or something like that, you know, trying to figure out is there a creative way that we can get from here to there?

Yep. Yep. And that might be by becoming part of their email system. It might be by have coming under a financial threshold. It might be by doing something through some affiliated organization. You know, maybe, maybe you become a subcontractor to someone else who’s already dealt with a lot of that kind of stuff.

And you know, there’s a lot of different options that that can help you. To solve these issues. It won’t solve every one of them. Sometimes you have to deal with them head on, but if you can find ways to creatively get around those obstacles, that can be really helpful.

Gini Dietrich: Yeah, I know that a lot of the big companies have usually an agency of record and will the, the AOR can bring in smaller agencies under their umbrella so that you don’t have to deal with those kinds of things.

So if that, you know, I would ask that question. Does it make more sense for us to come under the AOR? And in most cases, the agency of record is set up to, to handle that so that. You know, it makes, it makes it easier for the client to hire the teams that they want without the teams having to do all the insurance and all of the vehicular accident insurance and things that you really don’t need, but it prevents you from having to do that kind of stuff.

So that’s another question you could ask is, is there an AOR that we could umbrella underneath.

Chip Griffin: Right. So we, we’ve talked mostly about policy driven or financially driven obstacles from outside, but there are other, there are more strategic obstacles that can arise as well, or even tactical ones. And that typically comes from other business units.

Particularly sales teams or senior executives who are not necessarily directly involved in your day-to-day work. And, and those can be sometimes a little bit trickier to deal with because you’re not dealing, I mean, there, there’s some benefit to dealing with black and white policy, right? Because now you can figure out, okay, how do we, how do we deal with these?

Mm-hmm. When you’ve got a sales team saying, well, you’re not, this is not accomplishing enough, or this is not generating the right kinds of leads, or whatever it may be. That can sometimes be a little bit more challenging argument because it does, it often becomes a little bit more subjective. It often becomes a little bit more, you know, based on opinion as to, to what the best path forward is.

And so that can be a challenging one to deal with because, you know, now you’re, you’re dealing with things that are not as, as clear cut and you can just reach a simple resolution.

Gini Dietrich: Yeah, I mean, I am a big believer in the account lead, having a relationship with the sales lead. In some cases that might be the agency owner.

You know, I have a really good relationship with at least three VP of sales for our clients, and I have biweekly calls with those guys to make sure that we’re on the same page, we’re doing the right things. I also have a relationship with one where I can tell ’em we’re not their Kinkos and we’re not here to print brochures. But I, I’m a strong believer in that. And I know we also talked last week about my process of doing quarterly assessments, and I think both of those things help in those kinds of relationships because now you have that ongoing relationship with sales. Who can, who you can say, let’s test this, or let’s test that.

Or you know, you were in our quarterly assessment and we agreed to these things. Do you wanna keep going or do you wanna move to focus on that? And I will say that in some cases, especially, you know, if you’re working with a mid-sized company, the sales leader is constantly being, you know pressured to do more sales. And sometimes they’ll come and say, I just got my sales number increased by 20% and I need your help to do that.

And I understand that it wasn’t part of our quarterly assessment. What can you do to help? So, you know, having those relationships and those on ongoing conversations I think helps a ton.

Chip Griffin: And I, I think a lot of the same advice that we offered earlier in this conversation applies. Treat them as human.

Don’t view them as the enemy, and instead say, okay, you know, I, I understand your challenge. How do we get there? And too often I see in organizations it’s, I think it’s fairly common for marketing to blame sales. Sales to blame marketing and sales and marketing both blame product or client service or whomever.

Sure. May be in that particular organization and, and none of that is helpful because you are all on the same team ultimately. And so you need to try to find ways to work together and figure out, okay, how can we get the best possible outcome? Yes. And if it’s simply marketing saying, well, sales isn’t doing a good job of closing. Or sales saying, you’re not giving me enough good quality leads, that’s not helpful.

Have a conversation, figure out, you know, why is it not achieving the results that, that you want or that executives want? Are, are those results even possible? If so, how do we get there? Is it changing our ideal client profile? Is it changing some of our tactics? Is it investing differently?

There’s a lot of ways that you can get there, but it needs to be done collaboratively. And so in those cases, I strongly encourage you to work with your client contact to bring those other parties into the room and have a candid conversation. Yeah, yeah. And talk through what’s possible and honestly what isn’t. I mean, sometimes there are unrealistic views of what can be done.

You know? Oh, let’s, you know, let’s double our leads next month. Okay. Well. How are we gonna do that? Mm-hmm. You know, you don’t just wave a magic wand say, okay, we’re gonna

Gini Dietrich: Right. Woo, double your leads. Woo.

Chip Griffin: We’re gonna, we’re gonna send you twice as many SQLs next month as last month. Or all of a sudden we’re gonna get, you know three times the earned media coverage.

So sometimes it is just you really have to educate. This is not possible to do this on this timescale and instead talk about what is possible on that short timescale and what it would take to get to some of those more ambitious numbers. But you can only do that if you are having a real conversation in the room or if you’re talking with your client contact and saying, what do you need from us?

How can we help you to have this conversation? Because sometimes they, they can’t or won’t bring the agency directly into the conversation. That’s your ideal. But you may just need to try to coach up, educate and provide resources to your client contact so that they can carry the water forward.

Gini Dietrich: Yeah. You know what, last week we talked about. Not doing proposals for free and not giving away all your ideas and, and creating a sort of discovery phase in your process so that you’re getting paid for your ideas. And I think that’s part of this is part of that, which is as you’re doing your discovery and having conversations.

It’s not just with the CEO and the CFO and the CO, like bring in the sales team, bring in the IT team, bring in members from those other customer service, the other teams that are gonna help you do your job. And not only that, but understand the culture and the organization better. Start to build those relationships in the beginning so that when these things happen, and they inevitably do happen, that you have those relationships already built and can have those really have really good, robust collaborative conversations.

Chip Griffin: Right. I mean, that, that’s a, that’s a great point is to, to make sure that those relationships are not the kind of thing that you only think about when you’ve got these challenges arising. Yeah. They, they need to be pre stocked, if you will.

I, I will say that, that I had a mild moment of panic when you said last week we talked about, and I’m like…

I can’t remember what we talked about last week. Thank you. So thank you for elaborating on that. So I was not

Gini Dietrich: So you may remember. You’re welcome.

Chip Griffin: And I, and I realized that last week in our universe for this is only like four days ago,

Gini Dietrich: Two days ago. Yes.

Chip Griffin: Because of some scheduling anomalies. But yeah, my, my elderly brain was not able to remember that.

Gini Dietrich: I think it’s ’cause you’re overly tired.

Chip Griffin: Uh, that’s possible. It happens. Yeah. Plus I’m old, so there’s that too. On that note, I think, before I forget what we’re actually talking about here today, we’ll just draw this episode to a close. I think we’ve offered some useful tips that hopefully will help you to navigate some of these difficult challenges.

And, and meanwhile, I’m gonna go talk to the invisible man and see if I did a good enough job that, that we can continue this show moving forward.

Gini Dietrich: Maybe we’ll get a raise. Ask for a raise too, please.

Chip Griffin: I mean, I just, I just, I don’t, I don’t want him to cancel the show, that’s all because I, I do enjoy recording this, even if I can’t remember what we talked about.

So on that note, I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich,

Chip Griffin: and it depends.

In this episode, Chip and Gini discuss the common practice of providing free proposals and baseline ideas to clients. They argue that professional service providers should charge for these services as doing so adds value and ensures a thorough diagnosis before providing solutions.

They share personal experiences and compare the situation to doctors who would never prescribe treatment without proper tests. They emphasize the importance of understanding a client’s business through a paid discovery phase and making adjustments along the way to deliver effective results.

Additionally, they discuss the risks of providing overly detailed plans in early stages, the benefits of quarterly assessments, and the importance of maintaining clear communication and trust with clients.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: Gini, you got me all wound up for today’s topic. And so I’m sort of frothing at the mouth here. And, I’m gonna try to control myself, but I, I’m not trying to do a funny opening ’cause I just got too amped up in the leadup.

Gini Dietrich: Oh, okay, well good.

Chip Griffin: And I was afraid, I was afraid of what I might say.

Gini Dietrich: I like amped up Chip. That’s good. That’s good. Yeah.

Chip Griffin: I’m trying, I’m trying to dial it down to keep it at a level where we don’t get kicked off of any of the platforms we’re on and my hate mail is limited to a minimum and all of that kind of stuff.

Gini Dietrich: That doesn’t happen.

Chip Griffin: No, that’s true. I don’t, I don’t get that. No. But

Gini Dietrich: yeah,

Chip Griffin: I’m surprised. I mean, I, I would think with some of the things that you and I say on this show, we would get some people who are like, I cannot believe you said that.

Gini Dietrich: Maybe we do, and they just don’t report it to us. To the podcast platform.

Chip Griffin: That’s true. Or maybe they include it one of the inane podcast pitches that we get that I just hit delete without actually reading.

Gini Dietrich: Jeez Louise. It’s so bad. My favorite is when they pitch the FIR network and Shel Holtz forwards emails to the two of us and he is like, oh, here’s another prize.

Chip Griffin: Yep. I mean, I can tell, I can tell most of them when they’re, when they’re really poorly targeted, because those usually come into my iCloud email address.

Gini Dietrich: Oh, interesting.

Chip Griffin: Which is what I’ve registered the podcast with for Apple Podcasts.

Gini Dietrich: Got it.

Chip Griffin: And, but it’s literally the only email I ever get on that account, so. Huh. So I know as soon as it comes in that they have not done any research because that email address is not published anywhere.

I don’t use it for anything.

Gini Dietrich: So how would they get it? Through one of the systems or through one of the platforms?

Chip Griffin: I think so. It’s probably in the metadata somewhere. Yeah. Who knows? But

Gini Dietrich: fascinating.

Chip Griffin: Yeah. Yeah. Not, not a lot of smart podcast pitchers out there, unfortunately.

Gini Dietrich: Well, unfortunately there’s not a lot of smart pitchers generally just based on my inbox and based on some of the private communities I’m in.

Chip Griffin: Well, I mean, yes, and, and I do get, because of my various blogs and because I used to to have a political newsletter, I get an an insane number of actual pitches for people who think that I am proper media.

Gini Dietrich: Right.

Chip Griffin: But, but they are wildly, poorly targeted.

Gini Dietrich: Yeah. Yeah.

Chip Griffin: And I’m tempted to say, look, I, I haven’t done food and beverage reporting for 15 years now, so… I still get a lot of political pitches.

Gini Dietrich: Do you?

Chip Griffin: I have not had a political newsletter since 2015. Wow. So stop. Just stop.

Gini Dietrich: Yeah. I get a lot of Chicago area stuff, which is fine, because I’m like, oh, well that’s cool, but I’ve literally never covered Chicago.

Chip Griffin: Correct. Oh yeah. I get, I get all the New Hampshire stuff and like, oh, so and so got a grant. I don’t care. I mean, that’s Okay.

Gini Dietrich: Great. Awesome.

Chip Griffin: Thank you. Congratulations to them. But I don’t know what I’m gonna do with this information, so, right.

Maybe go get a different list. Anyway. Alright, well now that we’ve ranted about things that have nothing to do, that have nothing to do

Gini Dietrich: with, right,

Chip Griffin: with, with our actual topic, what are we going to rant about today? Gini?

Gini Dietrich: There was an interesting conversation in one of the groups I belong to, and it was essentially this.

Have you considered charging for your proposal and baseline ideas? Most professional service providers charge to assess the situation. After all these years, we still provide the outline of an actual plan and sometimes a campaign concept absolutely free of charge. Stop doing that. The discovery part of our process generally takes time.

Yes. And then the proposal is written and fine tuned, and then there’s a presentation. We do close two out of three engagements we pursue. Still, I can’t imagine a CPA or a law firm doing this kind of work. Why do we? Well, we shouldn’t. Let’s not do that.

Chip Griffin: Yeah. So it is incredibly common for agencies to try to provide fairly robust plans as part of proposals, or worse as part of RFP processes.

Gini Dietrich: Right.

Chip Griffin: There is way too much detail included in almost all of these. And I’ll be honest, my issue is not that you’re doing it for free, not that you’re not charging for it. It’s that you’re being stupid. Because you are submitting a prescription for how to solve a problem before you really have much information. We’ve said time and time again that as part of the sales process, you have maybe a couple of hours of conversation with a prospect. That is not nearly enough time to really understand what the right approach to solving that problem is.

You may know in broad brush strokes what is likely to be the case, but you don’t know enough to put together a detailed plan. So whether you’re paid for it or not, stop doing that.

Gini Dietrich: Yes, please. I 100% agree with this. We stopped doing it many years ago, but I love your analogy on this, so I’m gonna let you take it because it works perfectly here.

Chip Griffin: So this is, putting together a detailed proposal that includes the outline of a plan would be pretty much the same as if you walked into your doctor’s office and said, Hey, doc, I’m not feeling well today. And the doctor looks at you once and says, you know what? I’ve got the prescription for you. And they immediately write you a prescription or schedule a surgery or something like that.

They can’t do that because they don’t have enough information. Right. Even when, based on their experience, they have a pretty good idea what it is. They still order tests, they do blood work. They, they do other tests. They take x-rays, whatever it may be, to confirm that what they suspect is actually what they need to treat you for.

That’s right. You need to view your clients and prospects the same way. You should not be in a position of having one phone call with a client or prospect and saying, yep, know what that is. Here’s how we’ll fix that, and here’s what it costs.

Gini Dietrich: And I think saying to the prospect if they’re expecting a plan or you know, detail like that, I think it’s really important for us to say,

Like, we just don’t know yet. We need to, we need to know your business. Like we can, we can do some discovery and learn about you. What’s online for sure, but that’s not enough. We have to actually dig into your business and understand how the business is run. Do we have experience in your industry?

Of course we do. Do we know kind of the approach we might take? Of course we do, but we have to create a prescription to write exactly for you and your business so that we can have success. And we can’t do that without spending, you know, 30 or 60 days with you and, and getting to understand, getting to know and understand your business.

Chip Griffin: Right. So if we don’t think that you should be putting together these detailed plans as part of your proposals, what should you do instead?

Gini Dietrich: I mean, probably, gosh, 10 years ago we started doing sort of, we have sort of a three phased approach. And the first phase is for lack of a better term, discovery. So the client is paying us to learn their business, understand their business, talk to their stakeholders, talk to their employees, talk to people that are important to them.

Talk to customers, talk to former customers, do all of that work to really understand what the pain points are. And through that, we also do some things, which I would call quick wins or low hanging fruit, right? Because the client doesn’t always wanna pay for quote unquote strategy. So there are some things you can do immediately.

We’ll do an audit. We’ll look at, you know, because we always do the PESO model, we look to see what’s, if they’re doing a full, If they’re doing paid, earn, shared, and owned, what’s missing, what’s not if it’s fully integrated. So we can do that as, as we go along as well. And we can do some quick wins in terms of like, oh, you know, Halloween’s coming up.

Let’s do some social, some themed social media for that. You know, so give them some tangible things while we’re doing the discovery and learning the business that are easy, right? And not dependent on a strategy. Make them feel like we’re, we’re making progress, but getting the information that we need.

And then once we go from that, we craft the plan, which is the second phase. They’re paying for that, and then we start to execute. So it’s sort of that three phase. And what we have found is it’s a lot easier for a prospect to swallow a three phase plan because what they’re, in their minds, they’re thinking, okay, well if this first phase doesn’t work out, first of all, it’s not terribly expensive, and if it doesn’t work out, then we don’t have to do the second and third phases.

We can just take it and, and do it ourselves. Right? So they, whether or not they’re in love with you, they, that’s just human nature, what they’re thinking. And what we have found is that because they don’t feel like they’ve been roped into an annual contract where there may or may not get results. They’re, they’ve been roped into discovery or strategy building, or however you wanna call it, whatever you wanna call it, and they’re, they always, always spend more money.

On the execution than they would if we went right to execution in the beginning. Always. They always do. Mm-hmm. Because they see the value and they understand now how you’re, you’ve become a partner in their business versus just, this is what we do for everybody else, so we’re gonna do it for you.

Chip Griffin: Well, and, and as we’ve said before, it also gives you an opportunity to make sure that you are pricing that work correctly.

That’s because now you, it’s a good relationship. Now you have more information. Yep. Including how the client is to work with. Absolutely. And how responsive they are to your information requests or approvals or feedback or all of the things that make a big difference in your profit margins as an agency in your ability to deliver effective results for them.

I think the, the bottom line is that one way or another, it’s not so much that you need to get paid for it, but that it needs to be part of your process. Mm-hmm. That you do an actual diagnosis while engaged with the client and not prior to. Right. Because it, you simply can’t do it in the amount of time and with the amount of resources that you have available from the client before you’re actually working with them.

And whether you do that in a formally staged process or you simply sell audits or some form of paid discovery as a standalone. You know, door opener kind of activity. Or as some of my clients do, you simply say, look, for the first month of our retainer, we are going to be focused on building a plan. Sure.

And that is, that is the focus for the first 30 or 60 days. Yep. And you’re setting that expectation and it will refine the specifics as we move along. And that may require us to adjust, to come back to you and say, we need to adjust this retainer up or down based on what we find and what the, the best approach is.

And if you do this effectively, you’re not only coming up with a, a better solution for the client, but you’re building trust with them for the reasons that you outline. yes. Because they are now looking at you as the expert who is trying to spend their money more effectively.

Gini Dietrich: Yep.

Chip Griffin: The challenge, however, of course, is that most clients say they want to plan, but they don’t like the planning process.

Gini Dietrich: That is right. Yes.

Chip Griffin: And because for a few reasons, the, the top of the reason is because they, they want to see results immediately. Yes. And so I think your suggestion that you find low hanging fruit that you can deliver prior to the formulation of the proper strategy. Because there are things, there are little things that we almost certainly no going into an engagement will need to be done regardless of what the diagnosis is. And so why not throw some of those into the mix for those first 30 or 60 days in order to, to start showing some progress. But that is wildly different from starting down the path of a three month project that only at the end shows a result.

And maybe by the time you get halfway through, you realize, well, this doesn’t make any sense. This is not what they actually need. Right? We can’t actually get the results that we want from it. So you need to really be thinking about these things in, in the process of, of planning effectively.

Gini Dietrich: Yeah.

Okay. So let’s assume everybody is on board with that. Then I, I would think the next argument is, well, the way I’ve always done this, I’ve, you know, I get 70 per, I close 70% or 75% of my prospects. I don’t wanna lose that. So what’s, what’s our argument there?

Chip Griffin: So, I mean, my argument there is, is, first of all, I, I believe that it is unlikely that the reason why you are closing that percentage is because you are taking so many wild stabs in the dark, right?

Gini Dietrich: Yes.

Chip Griffin: It is entirely probable, in fact, that they would’ve gone with you whether you had that level of detail or not. Now. If you switch to our proposed approach and all of a sudden you see your close rate plummeting, okay, now you need to take a look at what you’ve changed and, and is there a different way to go about it.

However, I think it is extremely unlikely. Yeah. That you would find switching to us would have that kind of a dramatic impact on your close rate. I think the other thing to to look at is for the business that you have won, do you feel like that, that you have properly diagnosed in all of these cases in that initial plan?

Gini Dietrich: Mm-hmm.

Chip Griffin: Because if you find that, as I think is likely, there would be adjustments that you would’ve made along the way had you had more information. Mm-hmm. That may have also helped you adapt your pricing so that you’re more profitable.

Gini Dietrich: Mm-hmm.

Chip Griffin: Well, those are all arguments that even if you won the business, it was not the right way to win it.

Right. And so you would’ve been better off winning it in a different way, at a different price with a different scope or what have you. So you need to look at the big picture. And finally, you also need to look at what are the costs of the ones that you create. Right? And don’t go anywhere. Yeah. Because we all, I mean, particularly when I, when I talk to people about RFPs, people, they, they talk about the, the one big RFP that they want and they say, well, I can’t give up RFPs ’cause we got this one back in, you know, 2017.

And it, you know, it, it’s really, it’s been the, the driver for our business for the last eight years and blah, blah, blah. Okay, cool. But how many RFPs did you lose along the way? Right? And once you factor in the cost of responding to all of those, did it still make sense? And so you need to be looking at that and not just the two out of three that you’ve won.

Honestly, if you’re winning two out of three, I would probably, you know, look at whether you’re talking to enough people, because you could probably grow even faster if you had a slightly lower

Gini Dietrich: right. Yes.

Chip Griffin: Close rate. Oh, it, it does depend a little bit on when you’re creating these, because, you know, we, I would say the vast majority of agencies create proposals way too early.

And so, you know, they’re, they’re not taking it as far along in the process, but if you’re at least holding back until it’s almost a done deal, well then two outta three is probably a reasonable close rate. But if it’s these are all of your serious conversations, you’re not having enough.

Gini Dietrich: I totally agree with that.

And I was gonna say, I would 100% agree with you and would venture to guess that if you have more conversations, you will get a higher close rate. Using our process. Because there’s no risk to the client. I mean, they might be out a little a, a few bucks, you know, but they were gonna spend the money anyway.

And you both learn if it’s a great relationship for you. So I actually think your close rate would be higher if you use this process and talk to more prospects.

Chip Griffin: It, it certainly ought to be. Yeah. You know, obviously there’s, there’s nuances to every agency’s target audience and, and their appetite for, you know, for doing things and whether they want to be more reckless or not.

You know, if you’re dealing with startups, they’re probably less inclined to, you know, to pay for some kind of planning process. Right. Because startups are notorious for wanting to just roll the dice and see what happens, right?

Gini Dietrich: Right.

Chip Griffin: It’s not necessarily the right approach, but it is the mentality that a lot of tech startups historically have had.

And so you need to, you know, to be conscious of that. But I would say the vast majority of prospects that, that listeners are going after, will be open to this, particularly if you’re positioning it in a way that explains to ’em that you’re trying to make sure that you’re not wasting their time and money.

Gini Dietrich: Mm-hmm. Mm-hmm.

Chip Griffin: Because at the end of the day, the reason why people tend to be leery of hiring agencies is because they’re worried about throwing money away. Because maybe they had bad experiences with past agencies that they feel like we paid them a lot of money and we didn’t see any results. And part of that may be because that agency gave them a proposal and a solution without information. And so, and then, then of course, you know, as, as we are, you know, we have a contract in place, we have a plan, we feel obligated to march forward on the path that we’ve given the client. Right? And so that’s the other thing I would say is even if you go through this and you do a 30 day plan or something like that, with the planning process rather with the client.

Don’t feel like six months later you can’t go back and say, Hey, look, we have even more information now. We need to course correct. We need to pivot. Yes. It creates a risk because now you’re talking with the client and admitting that your diagnosis may have been either off base or not as full as it should have been or whatever, but you’re putting yourself in a position where you can actually get the results that the client is looking for.

Right. And so to me, it’s worth the risk of pivoting even somewhere down the road in the relationship.

Gini Dietrich: Yeah, and I know we’ve talked about this before, but one of the things that we implemented during the pandemic was quarterly assessments. So that we’re looking at the plan every quarter to to understand, okay, what worked, what didn’t work?

What do we need to tweak? You know, we’re constantly doing that. And yeah, of, of course it’s risky because you are admitting that some things didn’t work. But what it does is creates even more trust because the client looks at you and goes, oh, well, they’re not just feeding me full of baloney. They’re actually being honest about what worked and what didn’t, and they’re willing to pivot and make change so that the things that aren’t working, either we’re getting rid of and not doing, or we’re tweaking it to make it more effective.

So I think you build even more trust when you create that kind of cadence that allows the client to be involved in the planning decisions and planning discussions and measurement too, to understand what’s working and what’s not.

Chip Griffin: Yeah, and, and you know, this is, people know that I, I like weird analogies.

I think if they’ve listened to this show at all. And, and you know, if you, if you think about it, you know, if you’re in an Uber and you’re, you know that you’re going on the shortest route to the location you’re trying to get to, and it’s the, the route that you, you have endorsed and say, yeah, that’s, that’s the way we should go.

We should go the West Side Highway or whatever. If the road is flooded in front of you,

Gini Dietrich: right.

Chip Griffin: You don’t want your Uber driver just to keep driving straight into the flood? Nope. You want them to go off and go around it? Yeah. Even though that technically takes longer because you know what? You’re not gonna drown in the flood.

You should be the same way with your clients and say, Hey, look, I, I see we’ve got bad weather ahead.

Gini Dietrich: I love that.

Let’s, or traffic, let’s go around it. We have bad traffic ahead.

Chip Griffin: Traffic, anything, right? Yes. You’ve got to, you’ve got to use judgment here. Yes. Love that. You are being paid as an expert to use your judgment at all steps of the process.

And if you ever feel that you are in a position where your expertise is either not valued or you don’t feel comfortable delivering it, then you are in the wrong relationship and need to look elsewhere.

Gini Dietrich: Absolutely. Yes. And that is a different discussion for a different time, but

Chip Griffin: it is,

Gini Dietrich: we ha I have a client right now who’s, I’m like, red flags.

Let’s, let’s address the red flags.

Chip Griffin: Ah, red flags. Well, maybe we’ll talk about red flags again sometime soon because I think it’s been a while since we’ve ranted about red flags. But I think we’ll draw this rant to a close before we go too far off the rails, but I think I, I think I controlled myself pretty well I think.

 Gini Dietrich: You did. You did.

Chip Griffin: I think I got, I think I got most of the bad energy out before we hit record.

Gini Dietrich: I didn’t even think it was bad energy.

Chip Griffin: So that I could have a more modest rant.

Gini Dietrich: You did. You did very well. Thank you. You did very well. You’re welcome.

Chip Griffin: Thank you. I’ll pat myself on the head there for that.

So on that note, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich

Chip Griffin: and it depends.

In this episode, Chip and Gini discuss how agency owners should handle employees with physical and mental health concerns.

They cover the increased openness around mental health and self-care, sharing personal experiences and business challenges. They highlight the importance of individualized management approaches, legal considerations, and quick professional advice.

The hosts also emphasize compassionate handling of employee health issues, the need for flexible scheduling, and the impact on small businesses. Gini shares insights on providing support for team members and owners, such as disability insurance, to cover long-term absences.

They conclude by underlining the importance of empathetic leadership and offering flexibility.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, I, I, I think I might have broken my foot. I we’re not gonna be able to record today. I gotta go see the doctor and find out

Gini Dietrich: because you broke your foot.

Chip Griffin: Yeah. And I just, I got frustrated, you know, you know, in our past conversation that we were having, and I just kicked something and I, I think that it’s maybe broken.

So I’m, I’m in remarkably little pain though, apparently, because I’m still smiling.

Gini Dietrich: It’s like two, three weeks later. Yeah. And you’re,

Chip Griffin: yeah.

Gini Dietrich: And you’re, yeah. Here, right.

Chip Griffin: But no, in, in all seriousness, , we are going to talk today about how agency owners should handle it when they have employees who have physical health concerns, mental health concerns.

They might be one-offs, they might be ongoing. And this is something that a, a lot of the, the owners that I’ve been talking with this year seem to have… At least they feel like they have more instances of this that they have to deal with. I suspect that’s not the case. It’s just recency bias, on things.

But I can certainly tell you that over the years I’ve had a lot of these issues, to deal with, with team members. And it’s run the whole spectrum. It’s been everything from, you know, extreme mental health issues to extreme health issues, and you know, you gotta try to figure out how to navigate those and, and as an owner.

Particularly in a small business of any kind, that can be a real difficulty.

Gini Dietrich: Yeah, I, and I would say, I mean, I feel like it’s more prevalent now as well, and come, some of that could be recency bias, but I also think we’re much more open, especially on the mental health side of things about that and about self-care and ensuring that you’re going to a therapist and things like that.

And the first time this actually hit my business was about five years ago when our younger employees would say things like, oh, I can’t make that meeting. I’m, I have a, an appointment with my therapist. And I’d be like…. During the day? Okay. And I remember at the time, and it was during the pandemic, so everything was kind of a shit show, but I remember at the time thinking, really, you’re making appointments with your therapist during the day?

And now I’m to a point where I’m like, okay, if that’s what you need to do. And that’s when they, you can get in and go. But, I do think that some of it is because we, especially the younger generations, do a really nice job of being really open about these are the things that I’m dealing with. These are the things that I’m working on, and here’s how you as my employer can help.

Chip Griffin: Yeah, I think that’s a, that’s a great point. And, and it’s also, I think there’s a broader awareness of these yes issues, particularly on the mental health side, but I think on both the mental and physical health side, people are much more open about these things than they were when we were coming up.

In the workforce.

Gini Dietrich: Absolutely. Yeah. Yeah, yeah, yeah.

Chip Griffin: You know, when, when I was first starting out, you know, you, most people, if they were seeing a therapist would never admit to it. Most wouldn’t even indicate, they might say they were going to the doctor, but usually that meant job interview. Right. And if they were actually going to the doctor, they probably didn’t even mention it.

And, and instead they found some other way to work it into the schedule. So, yes. So I think part of it is that, that, you know, particularly for agency owners who are, you know, more of our generation. It’s just that people never talked about this before. So you hear people talking about it.

That didn’t mean that those challenges didn’t exist before, but you weren’t certain about it. You, you’d be sitting there kind of guessing. And I certainly had a number of those 20 years ago where I’d have an employee was clearly having something going on, but it wasn’t really clear what. You know, I, I think it is helpful now because with employees being more open, at least you know what you’re dealing with.

Gini Dietrich: Yes.

Chip Griffin: And you’re not guessing wrong where someone’s just kind of, you know, disappearing for stretches of time and, and you’re not sure why. I had one who I thought had a, a very serious health issue of some kind, and it turned out to be a, a personal relationship issue, that was being dealt with. Wildly different things.

Right. And, and causes me to, to have wildly different concerns. Correct. But back then you didn’t talk about them.

Gini Dietrich: Not at all. Yeah. You didn’t talk about it at all. And I think you’re right that you sort of had to guess. And I’ll say that, you know, in the last five years I’ve done a lot of work myself as a business owner to understand how to support different types of both mental and physical health challenges so that I can be, be a better employer. But it’s been a learning curve. And it’s been a lot of coaching that I’ve had to get on my own to understand like, if you have a person who’s dealing with this, this is the, and you know, I think the big ones are ADHD, right?

How, how do you deal with somebody in the workforce who has ADHD or ADD? How do you deal with somebody who is on the spectrum? You know, how do you, how do you handle other types of, of mental health issues like, bipolar or things like that. So I’ve spent a lot of time as an, as an employer understanding how to manage and lead those types of the, the people who have those types of things.

Chip Griffin: Yeah. And I would throw anxiety into the mix is a, is a big one. Yep. Depression, that, that rears its head in the professional world.

Gini Dietrich: Yep.

Chip Griffin: And, and so I, I think a lot of this goes back to things we’ve talked about in the past. You know, where you have to, to learn how to manage each employee individually.

Mm-hmm. ’cause they not every there’s no one size fits all management technique. Certainly there are some general principles that you can follow, but you really do have to customize the plan to the individual and what they respond to. Because some of them, if you, if you raise any kind of constructive feedback, they may freak out, right?

Yep. And just be like, oh, I, I can’t, I can’t handle that. And so you may have to, to find ways to, to gently tread into that territory. And I’ve had owners say, well, I don’t want to, I just need to be able to tell them what I need. Okay. That’s what you need. And, and if, if that works for you, that’s great, but if it doesn’t…

If it doesn’t get what you want from that team member, who cares whether it’s the way that you want to do it or not, right? You get to pick, you can either keep working with that individual and, and work with them in the way that suits them best, or you can do it your way and, and either lose the employee or lose their productivity.

Gini Dietrich: Yeah, I think one of the things that we’ve always done really well is, you know, personality tests, especially when somebody starts, give them a personality test so you understand sort of where they fit in the bigger scheme. And I think adding in this other piece of it is really important now so that you understand not just the personality, but how, how they deal with things.

And if there’s anything that’s gonna cause them to, you know, we, we had, I had an employee for a while who, if you gave her direct feedback, she would spiral. And, and even if it was like, We just, I want you to be thinking about this or want you, like it wasn’t cons, it wasn’t criticism, it was just feedback.

She would completely spiral and she couldn’t function, so I had to find different ways to provide feedback that she was able to accept it and not spiral into this mound of depression where she couldn’t function.

Chip Griffin: Yeah. And, and, and I, I think that, you know, we all need to, to remember that there are, there are different layers to this as well that we need to be thinking about.

Yes. Because certainly there’s, there’s the practical of, you know, how do you get the most from your team members and, and get the results that you need for your clients and for your business. But there’s also legal and regulatory issues that often crop into this. That we need to be aware of and sensitive to.

So, yep. You know, one of the things that I always say is, you know, particularly if, if you’re having a really difficult time with someone and there is some health component of some sort, whether it’s physical or mental, or otherwise. It behooves you to get some professional advice from an HR consultant.

Yes. An employment lawyer. Yes. Someone who can help you navigate those things because things that, that you think might be obvious and reasonable and common sense just might not be.

Gini Dietrich: Yes.

Chip Griffin: And, those are the kinds of things that can get you into a lot of trouble. Mm-hmm. Particularly in 2025. Mm-hmm. So really pay attention to that sort of thing.

Gini Dietrich: Yes, indeed. Yeah, I mean I think that’s really sound advice is to really understand and you know, you have Patrick on every once in a while and he’s great for just bouncing those kinds of ideas off of, to be able to understand like. What should we be thinking about? How should we handle this? Help me create some structure around this.

Create a policy around it. And then it’s something that if you have a team, if you have people who are leading or managing other people, they have to understand that too. So it’s not just the training that sort of the states require, like, you know, the state of Illinois requires sexual harassment training and mental health training, and there’s one other.

I can’t remember what it’s called, but it, the state of Illinois requires that of everybody who’s working in Illinois. So it’s on top of those things too that you need to talk to an HR professional about what kinds of things that you, that you and your leaders need to go through so that they’re cognizant of what, what things they’re doing that might affect the people that they’re leading.

Chip Griffin: Right. And, and there’s a difference between long-term health issues and short-term health issues and Right. And how you handle ’em. And a lot of it frankly, starts with my first advice always when, when dealing with employees with challenges is say, look, start by being human. Right. So, so accept that particularly, particularly for short-term acute things.

Give people space. Give people time.

Gini Dietrich: Yep.

Chip Griffin: And, and it is if, if there are going to be prolonged repeated absences, that’s something that you need to deal with differently than someone has, has either themselves had a health crisis or in some cases it might be a family member has had or is having a health crisis.

If it’s short term, just do your best to roll with it because that’s the human compassionate thing to do and that will come back and benefit you over time. If it’s going to be months or years long that, that this is gonna go on for, now you need to try to figure out how to find some common ground with that team member that is, you know, certainly within the law and the rules that you have to follow, but also that makes sense for the business. And these are not always easy, particularly for small businesses, because for us, if we have someone who is, you know, either out completely or you know, partially absent for a few weeks, that’s a much bigger deal than it is for a thousand person business.

Gini Dietrich: Right, right.

Chip Griffin: And, and I’ve certainly, I think I’ve shared on, on the show before how in the past I’ve had numerous occasions where I’ve had people, particularly, who had to take extended maternity leaves for various reasons. That can be really difficult because certainly as an, as an employer, I wanted to bring the person back.

Legally, I have to be able to, in most cases, bring that person back. But somehow I need to get that work covered. Right. And it’s not the same as having someone gone for a week or two. We can just ask everybody else to step up and put in some overtime. Right. Right. And yet, small businesses generally are not able to, to bring in temporary help in the same way that a larger employer might say, Hey, bring you in. You’ll work three or four months on this, and then you know, we’ll find another account for you to work on, or something like that, right?

So it is much more challenging, but you’ve gotta try to find the best way forward that that really serves your interest as a business, while also respecting the individual and their needs.

Gini Dietrich: I think that also brings up a good point about the agency owner themselves, because in the last couple of years I’ve had four, four friends diagnosed with breast cancer, four, and they all run businesses. And when I went through it with my first girlfriend, you know, we kind of set the structure of here’s how you’ll manage it inside the agency. Here’s what you’ll ask your team to do. She actually brought in a consultant to run the agency for her for about nine months while she was going through treatment. And then here’s how you communicate it to clients. And she, and she didn’t lose any clients because of the way she handled it and ensured that everything was covered.

And so I went through that with her, and then I had my next girlfriend call and say. I’ve just been diagnosed with breast cancer and I said, I have the template. So I’ve been able to help all four go through the process of understanding that you probably are going to have to hire somebody to help you run the agency, or maybe you have somebody internally that can step up to that, right?

But there is going to be somebody that needs to take your, fill your, your shoes, so to speak. There’s a way that you communicate that to your employees. There’s a way that you can consistently communicate with your employees so they always know what’s going on. ’cause it’s scary for employees. They think they’re gonna lose their job.

At the same time that they’re scared for you. Right. And then how do you communicate that with clients? For the most part, most clients are pretty cool about it. They don’t, they, their only concern is, is the work going to continue to be done and done well? And you know, and if you’ve set up your agency the way that Chip and I have talked about over the years, which is where it’s not solely the reliant on you, then it’s not, it’s less scary for the, for the clients. But again, consistently communicating, helping them understand what the process is, and then just keeping them updated because they’re gonna wanna know.

Chip Griffin: Yeah. And, and I mean we always say this, but it’s, it’s true that, that most clients are far more understanding of challenges that arise, whether it’s our own health issues and employees health issues. Right. Employee turnover, mistakes. What employee clients are generally far more understanding and accepting than we give them credit for.

Absolutely. And that’s because there are, there are the select few who are not, and, and those are the ones that tend to stick in our memories, Uhhuh. And so we, we, we tend to, to overthink that and, and believe that, that more clients are like that. And the reality is that the vast majority are not.

The vast majority are human beings who understand that stuff happens.

Gini Dietrich: Yeah. Yeah. And in fact in all those four relationships, there was only one client out of all four that was a jerk about it. And I gently suggested that maybe they shouldn’t be a client. Yeah. And I don’t think they are today.

Chip Griffin: Yeah. And, and I mean, I, I think that, that as an owner, if you go through these sorts of things, that also helps you have a better template in your own mind for how to work with team members.

Who have issues. even if it’s not a one-to-one, you know, may, maybe you’ve been through, you know, a heart issue or a health, a cancer issue, or a mental health issue, that whatever it is, those all help you in dealing with it. Doesn’t, doesn’t mean you can’t, if you’ve been perfectly pristine, healthy for your entire life.

It doesn’t mean you can’t deal with those things, but those are, you should take lessons from your own experiences and try to think through, you know, what challenges did you have? Yep. And, and how would you have wanted to be treated? Yeah. Because that will often serve as a good roadmap for you in how to work with your team and to, to show that understanding while still realizing that, that there is still a job that needs to be done in some fashion.

And, and so I think a lot of it is to the extent that you can. Get an understanding from the employee what, what it means professionally. You don’t, you don’t want to, and you probably shouldn’t ask a lot of questions about whatever the actual underlying issue or issues might be. All you need to know is what does it mean for me as the employer?

What does it mean for your availability? How can we help you to make sure that we’re covering things, that we’re planning appropriately? Maybe we can shift your schedule in some fashion, and we do have to accept that, you know, you to the point that you made earlier on in this episode about, you know, someone going off to see a therapist during the workday.

The reality is, and my wife and I were talking about this recently, there are a lot of professionals out there who don’t maintain schedules that are particularly friendly.

Gini Dietrich: Right.

Chip Griffin: To the workforce.

Gini Dietrich: That is true. Yes.

Chip Griffin: And, and we were talking about the specific example of like dentists, right? How many dentists are open on weekends?

Gini Dietrich: None.

Chip Griffin: Very, very few. Yes. If I was ever a dentist, I’d be open on the weekends. Right? Because guess what? That’s more convenient mm-hmm. For a lot of people.

Gini Dietrich: And evenings, yes.

Chip Griffin: Yeah. And evenings. Mm-hmm. And it’s sort of like, you know, you, you drive people, people complain about, you know how Main Street America, the shops are disappearing.

Well, part of that is because if you go to a lot of Main Streets in America on a Saturday or Sunday, they’re all closed. And I get that, that owners want to have normal weekends.

Gini Dietrich: Yes, yes.

Chip Griffin: But guess what? That’s, that’s when your customers typically can come.

Gini Dietrich: Correct.

Chip Griffin: Depending on, you know, who your target audience is, right?

It’s the same thing, you know, we were, people I think know that I have a side business of, of doing photography. And we’re working on, you know, this is the peak season right now for senior portraits and that sort of thing, and we had a parent who said to, to Jen, who does the bookings for it. She said she offered up some weekend dates.

Oh, Chip does these on the weekends? Well, yeah. But there are a lot of photographers who don’t, who won’t? They wanna work Monday through Friday.

Gini Dietrich: Well, then they need a different job.

Chip Griffin: I get that impulse. But you know what, that’s a much more difficult time to get, you know, students and families or whomever together. And there are, there are genres of photography that, that don’t require that, right?

If you wanna do professional headshots and those kinds of things, those are much easier to do during the week. You’re not gonna get someone, you know, who wants their headshot typically on the weekend. Happens occasionally, but it’s, it’s much more common to do that during the work week.

But when you’re talking about more personal ones. You’ve got to set up your business around when your customers want you. With employees, you need to start thinking about, you know, how can, can you accommodate the fact that most of the, the business world apparently doesn’t think the same way that you or I might. Yeah. And so if the only time that there’s availability to go to the doctor is during the week, you need to make that available to your team members and not make them feel guilty about having to take some time off during the week to do those things.

No, that’s, that’s just because we’re all working much more flexible schedules today, whether, whether we as employers like it or not.

Gini Dietrich: Right. That’s exactly right. One of the things I, you brought up maternity leave earlier. And I think that that’s a really good lesson for most business, for most agency owners, because there will be a time where you have to give parental leave.

And the first time it happened to me, I remember freaking out because we needed to hire somebody to fill that role ’cause she was going to be out for at least three months. But I also couldn’t afford to be paying for both, and so I invested in long and short-term disability for all our employees so that when things come up, they have they, and so they, they can have it on their own, of course, but we also did it through the business so that when things came up.

I had that ability to pay them while they were off on whatever leave they needed, but also have the budget to be able to hire somebody temporary to fill that role. So that was one of the big saving graces for me, is having, providing that, investing in that insurance for my team.

Chip Griffin: Yeah. And, and look, I mean, a, a lot of things have improved in, in recent years in handling these kinds of short term coverage situations because, you know, we’re, we’re not in an environment where the short term replacement has to show up in the office.

You know, 20 years ago when you were doing this, you, you wouldn’t really dream of having a replacement who worked remotely in most cases. Now, you certainly can. And there’s a lot more people who are open to taking those kinds of short term engagements than there were a couple of decades ago. So you, you certainly do have a lot more flexibility to cover them.

You do have the cost issue, right, because you, you know, you can’t double pay. And obviously a lot of small businesses simply don’t pay for parental leave. Which, look, if you, if you’re not in a position to be able to do that, I, I’m not gonna fault you for that. Right. If you’re able to, to put together something where you can offer disability insurance, that would cover during parental leave situations, that’s fantastic and you should certainly be looking into that.

But either way, you have a lot more options today to fill those gaps, and you shouldn’t hesitate to do that when you know it’s going to be a fairly well-defined prolonged absence. Absolutely. Because that, that makes things easier on everybody, on your team.

And, and I can tell you from experience asking everybody to step up for months on end, that’s just, that’s not sustainable.

It’s not sustainable.

Even if they say, of course I’m willing to help out, you know, Sally or Joe or whoever it is. Yeah. They, they’re gonna end up resenting them to some degree, you know, by, by week 11 or 12.

Gini Dietrich: Oh yeah, for sure. And you will too, because everybody’s gonna be burned out and exhausted. Absolutely. Right.

Chip Griffin: Right. And, and we have to, I mean, we have to keep that in mind too, that, you know, there are, that, that people are feeling more burned out at times, and we need to understand why that is. And I, I think in some cases it, it may be, this won’t be popular, but I, I, I think that some people have been coddled, in their lives.

And so they’re not used to having to, to work hard for a full 40, right? That does happen not nearly as often as most owners think, though. Most often when you have an employee who is feeling burned out, it’s ’cause you’re asking them to work way more than 40 hours a week. Yes. On a regular basis.

Gini Dietrich: Yes. Yes.

Chip Griffin: And so you need to understand the difference. Because look, if, if someone is saying they’re burned out and they’re only working, you know, 20, 25 hours a week and they’re, you know, kind of coasting the rest of the way and that’s the actual fact, not just what you think in your head, but what they’re reporting on time sheets.

Because you are doing time tracking. Right. Right. If that’s the case, that the solution there is very different because you need to understand where that feeling of burnout is coming from. Whereas if they’re working 50 to 60 hours a week on a regular basis. You darn well know where that feeling of burnout is coming from.

Gini Dietrich: Right, right. Yeah, yeah, yeah. You just have to pay attention. I think you’re right. You raised the point earlier that you can’t really ask, but if they’re sharing information about their physical or mental health, you can definitely use that to help you understand how to better lead and to give them this, the resources they need to be successful.

And just be an empathetic human being because we all go through things, we all have personal things we have to deal with. We all have to go to the doctor’s office, all of us. So just be empathetic to the things that you, we all have to do. And I think you’re right too, that if you provide the flexibility to be able to do that, you create much better loyalty than you would if you said, Nope, you have to do it after 6:00 PM.

Chip Griffin: Absolutely. Well, hopefully we’ve made owners feel a little bit better about these kinds of situations and understand they’re not alone and there are options and there is a path forward when you have to deal with these things for a team member. I, I know that it’s, it’s already made my foot feel better, so I don’t think I need to go to the doctor after all.

I think, I think maybe it’s not broken. Maybe that was just in my head.

Gini Dietrich: Nice full circle there.

Chip Griffin: See, sometimes I even remember what my opening was so I don’t have to wait for the transcript to find out.

Gini Dietrich: Oh, love it.

Chip Griffin: On that note, we will draw this episode to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

In this episode, Chip and Gini discuss how to manage situations where clients want to terminate contracts early. Gini emphasizes the importance of having a strong contract with clear termination clauses, which can serve as leverage in negotiations.

They share experiences and strategies for recovering outstanding invoices, including offering concessions and being flexible with payment arrangements. The duo also cautions against aggressive tactics like public shaming for non-payment and stresses the importance of maintaining professionalism to avoid burning bridges. They conclude with practical advice on managing accounts receivable and resolving disputes amicably.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, we have one of your favorite topics today, but it’s one that, that we haven’t visited in a while, so it’s, it’s probably worth revisiting. Okay. And, and, and that is, how do you handle it when you have a client who wants to end their contract early?

Gini Dietrich: Well. As we all know, I am a stickler for the details when it comes to this, and we have very specific language in our contracts. Our attorney helped me create something beautiful that is a 90 day termination clause. Almost never does somebody sign 90 days. They use, it’s usually a negotiation point, right?

It’s, we get it to 30 or 60, whatever. I use it for negotiation. Sometimes the client signs the full 90 day contract. I have had a situation where a client called me at the end of the month and said, we are terminating the contract as of today. And I said, great. There are two outstanding invoices, and by the way, you have a 90 day termination clause.

And they came back and said, and I said, but if you’ll pay the the outstanding invoices by the 15th of the month, then I will happily waive the 90 day termination clause because I know you’re, it’s cashflow and I know you’re having a tough time right now. They came back and said, no, that I’m not being a good partner.

Chip Griffin: So to clarify, they don’t want to pay for services already rendered?

Gini Dietrich: Correct.

Chip Griffin: That seems unreasonable under any circumstances.

Gini Dietrich: I agree.

Chip Griffin: So I think that from my observations of having had these conversations with you now for what, seven or eight years now on this show, you’re being particularly reasonable.

 Especially for me.

Yes. That’s what I’m saying. You, you personally are being particularly reasonable Uhhuh, because usually you are much more hardcore than I am

Gini Dietrich: Yes.

Chip Griffin: On these things. Yes. I think that’s fair to say it is. But what you’ve described is. Is something that I would typically offer to a client. Settle your debts and we can just part ways amicably.

Gini Dietrich: Yes.

Chip Griffin: And you are also, I think, the only agency owner I know of who has ever sued a client. I’m sure there are others out there, but I don’t know them personally.

Gini Dietrich: It’s the principal.

Chip Griffin: Yeah. Yes. We, we know that you, that you thrive on making the point.

Gini Dietrich: I do.

Chip Griffin: So, so it’s

Gini Dietrich: Fair is fair.

Chip Griffin: So you’re clearly. Going soft.

Gini Dietrich: I’m, I’ve, I’m getting older.

I’m, I’m getting older, and I understand that this is not worth pursuing. I would like our past due invoices to be paid, and I will happily waive the 90 day clause. If, however, you don’t pay us by the middle of the month, then I’m not waiving the clause on the contract you signed.

Chip Griffin: Right. So let’s, I mean, let’s extrapolate or not extrapolate, let’s, let’s step back and look at this at a higher level rather than your particular individual case.

We can use that as an example. Sure. But I think that, that there are a few key points that come out of this that could help other owners. And, and I think the first one is the way that you are using the contract as a tool to get leverage to get a solution that you’re happy with, right? It’s not that you’re abiding by the contract.

Right down to the last crossed T and the last dotted I, you are willing to make concessions, right? But by having a strong contract, it gives you the leverage in that negotiation to be able to trade something, the unpaid invoices for the lengthy notification period. Or not lengthy, but the the 90 day notification period.

Gini Dietrich: Right, right. Yeah. I think that’s right. And I think having that leverage helps And you, you have, you have to find ways to be able to have that leverage. Like, you know, web forms won’t deliver a website until you’ve paid their last invoice. Same thing. Like what do some things, if a client’s not gonna give you any notice and they did not give us any notice, they called us on the last day of the month.

If they’re not going to give you any notice, then what is your leverage to be able to get the invoices paid, in a timely manner? And you know, if they’re saying, well, we can’t pay for 60 or 90 days, or they’re saying We’re not gonna pay it all. There’s things that you need to have. So I think your point about having a contract that has that language in it that they have signed and agreed to, gives you some of that leverage.

Withholding work product gives you some leverage. So there are some things that you can do, but you have to have that all set up. You know, you always talk about sort of the prenup. What happens if you get divorced from a client, right? What are the things that are gonna protect you in that, that situation?

Chip Griffin: Yeah. And, and I think if you, if you look at a contract as a tool rather than a rigid roadmap, I, I think that’s, that’s the most helpful way to think of, of legal agreements, at least in the agency client context. There are obviously other places where it is that rigid roadmap and Sure. And you’re not gonna do anything about it.

I mean, you try having a negotiation with, I don’t know, your car lender, you know, it’s probably not gonna happen. They’re probably just gonna sit there and say, you know, you signed the 27 page agreement.

Gini Dietrich: Right.

Chip Griffin: Pay up.

Gini Dietrich: Yes.

Chip Griffin: So, so you know, but in, in an agency client relationship, the, the contract is that tool to help resolve the challenge in some sort of a reasonable way.

And I, and I do think that it is particularly unreasonable when clients call at the end of, of a time period and say, we’re ending immediately. I mean, that’s just – Regardless of what your contract says, that’s just it. It’s bad behavior. Yep. And, and I don’t appreciate seeing it. And it tells me a lot about either the individual or the organization or sometimes both.

Yep. And, and so certainly not something you ever wanna see. Having a contract can help you find a resolution to that. Although, I will say at the same time, when you have people who engage in that kind of behavior, it sometimes ends up being a lost cause candidly. Because if, if someone is willing to do that, then they may have no issue at all just leaving invoices unpaid, and then your only recourse is to sue, which you can do.

Sure. You’ve proved that. Yes. And, and yet most of the time it will cost you more time and money than you actually recover.

Gini Dietrich: Yeah, for sure. Yes, I have. I have learned, I have grown. I have, and sometimes there are situations where I’m okay spending the money to prove my point.

Chip Griffin: Well, and, and sometimes, and there are other options. You can sometimes turn, turn these over to collections groups who will take a percentage of whatever they are able to recover, you know, that. And they, they just turn into the obnoxious collections agent and just Yep, keep calling. You know, that’s not something I’ve ever pursued, but I know some, some owners who have gone down that route, with mixed success.

So. You know that there are things that you can do, but generally speaking, your best bet in my experience is to try to work something out in as

Gini Dietrich: Yeah.

Chip Griffin: As friendly a way as possible. Yeah.

Gini Dietrich: Yeah.

Chip Griffin: But it’s, it’s also a good reminder to, to stay on top of your accounts receivable. In your case, two months is, is not terrible.

There are plenty of cases where I’ve worked with agencies who have much larger debts owed to them by clients. Yes. And, and what I always tell folks is, you know, whatever you have for outstanding invoices, you have to assume you’ll never get paid. Because there’s just, you know, particularly once they cancel, now you’ve got no leverage left, right?

Because what are you gonna, the only thing you have at that point is a lawsuit.

Gini Dietrich: Yep.

Chip Griffin: That’s not particularly helpful

Gini Dietrich: right

Chip Griffin: Now I have seen a lot of suggestions in places like candidly, the Spin Sucks community, where people have suggested. Some creative,

Gini Dietrich: very creative,

Chip Griffin: but I think very impudent

Gini Dietrich: correct

Chip Griffin: ideas.

Gini Dietrich: Yes.

Chip Griffin: For how you deal with deadbeat clients.

Gini Dietrich: Yes, yes.

Chip Griffin: For example, I think one suggestion I saw, I forget whether this was Spin Sucks or somewhere else, was basically taking out a billboard in a community attacking a company for not paying.

Others have suggested putting them on blast and just posting all over social media like you see people do when they’re upset about some treatment by the airline or something like that.

Gini Dietrich: Yes, yes.

Chip Griffin: These are bad ideas folks.

Gini Dietrich: They’re bad ideas. Actually, I just saw somebody put a company on, on blast on social media because they weren’t paying their bills, and I was like, well, that’s one approach.

Chip Griffin: I, I mean, the thing is you have to look at this through the lens of the recipient. I mean, you’re, you’re escalating dramatically with them once you go public, right? With something like that. And so now you know, you think you’re putting pressure on them, but the exact opposite may be true.

You may be stiffening their spine to say, You know, I didn’t like working with these people anyway, and if they’re gonna behave like this, right? Because keep in mind we sit there and, and, and we look at a client who is canceling with little or no notice, not paying bills. We look at them as the bad guy. But oftentimes if you talk to them, that’s not how they see it.

Sure. And, and so, and they may think in their mind, well, geez, this agency didn’t live up to their promises. They didn’t do what they could, or they don’t understand and appreciate our financial troubles that, you know, and, and we just, we don’t have it. We can’t pay it. It is what it is. And, and so, so they don’t think that, and so you going on the, the attack publicly right now just makes them think.

Even better of themselves and worse of you and, and takes you further away from resolution rather than closer. I mean, certainly in some cases it might work, but I, but I would argue more often than not, it’s probably not going to. But the other thing you have to think of is how are other people perceiving this?

Right. Prospective clients. Yeah. Who might be inclined to work with you. Yeah. If they’re looking at this, they’re saying, geez, you know, if it doesn’t go right with them, this is how they treat their clients? Yeah. I don’t, I don’t know that I wanna work with them. Yeah. So, so you gotta be really careful with these kinds of, of tactics because scorched earth usually burns both sides.

Gini Dietrich: Absolutely. And I, I mean, there’s something to be said for not burning a bridge, you know, and sure, certainly there, there may be instances here and there over the years that you, it’s okay to burn the bridge, but overall you don’t wanna burn the bridge. And, you know, I, I think that that’s the case. As I’ve grown and matured, that’s one of the things that I’ve learned is, yeah, could I prove, could I sue them and prove my point?

Sure, absolutely. Is it worth it? Probably not.

Chip Griffin: No. And, and so, so what you really have to do is figure out, you know, how, how can you get the best possible outcome at this point? And so, you know, in your case, trying to trade the outstanding invoices, you know, for waiving the notice period is, you know, probably the, the first and most obvious thing that you can do.

But I would also say in these cases, try to collect as much as you can, however you can. Yeah. So, so sometimes what you might do is you might say, well if, if you can pay one of the invoices by this date and the other by a later date, you know, that will then, so ’cause that sometimes can encourage that first payment to come in or break it up.

Mm-hmm. You know, break it up into four monthly installments even though it’s two months worth of there. There’s a lot of different creative things that you can do so that you are mitigating your exposure and, and collecting at least some of it. And I think one of the mistakes that, that I’ve seen people make in circumstances like these is it becomes all or nothing.

Yeah. And so the, the focus is purely on getting the total amount owed. And, and I would strongly encourage you to try to, if, if you certainly start there, but if you can’t get that right away, then try to figure out how can you, you know, start carving out at least some of that past debt for two reasons.

One is it does reduce how much you’re out at the end of the day. But the second is it starts to, to build the expectation in the client that they will continue to pay up, right? And so, so getting that first payment across often will help you get to the later ones. Maybe not to all of them, but at least to subsequent ones.

And so, you know, you want to think creatively about this and, and not cut off your nose to spite your face because you just, you wanted it all.

Gini Dietrich: Yeah. And I, I would say to that end too, that many of us have, interest clauses in our contracts. I never hold clients to that either. Like if I, if I can split it up into four payments or, you know, five payments, whatever it happens to be and get and not charge interest for them being late, like, but I get the money eventually.

I that, I’m fine with that.

Chip Griffin: Yeah, I mean the, to me, the interest clause is, is really just another lever for you to use. I certainly know agencies who do charge the interest. In some cases I know them, that they, they’ll start it like on day one of being late. I, you know that that’s not.

My approach to it. I, I think that, that you, you can lead to clients feeling like they’re being nickled and dimed for things like that. Sure. Yeah. But the other thing frankly is that there is, a fair bit of, of research out there that suggests that things like interest in late fees and all of that actually encourages late payment. Sure. Yeah. Before the be, you know, there was a, I remember there was one particular study of a daycare. And the, the daycare was frustrated that parents kept, you know, showing up after five o’clock or whatever to pick up their kids. I remember the staff had to wait around and so they started instituting a late fee, and rather than fixing it, it actually made it worse.

Yes. Because then people started saying, well, okay, I’ll pay the extra 50 bucks. Right. You know, so that I don’t have to show up until like seven. Yes. Yes. And, and so what they, because, so sometimes those kinds of, of penalties actually serve as permission to engage in bad behavior. So, so something to, to keep in mind when you’re using things like that is that, that you may not have the expected consequence of things like that.

So you, you wanna think those things through, but I, I encourage you to have the interest fee provision in there because it is something that you can say, it does give you that leverage. You gets paid in 10 days, then we’ll waive it or something like that. Yep.

And so you, you, you always want to try to appear, even with the most difficult client, it is in your best interest, no pun intended, to, to appear to be as accommodating and as helpful as possible. Because your goal, when you think about it, is to extract yourself from this relationship with as little damage to your business as possible.

That’s right. And generally escalating, and, you know, you know, putting up your fists and sparring is not the way to get there.

Gini Dietrich: No, absolutely not. And like I said, if you, if, if you can avoid burning a bridge because you’re right. These cl, these, these are people who are going to refer business to you.

And I always say, I always say this about employees. You always remember an employee by the way they left, not with by all the great work that they did while they worked with you. Yep, sure. And if they behave, if they left badly, that’s how you remember them. And it’s the same thing with clients. If you leave the relationship poorly or you leave with a bad taste in their mouth, or you put them on blasts publicly.

They’re not going to refer business to you, and they’re going to remember that you treated them badly from their perspective when you left. So I think those are the kinds of things that we have to think about as we, as we deal with clients who don’t follow their agreement that they made with you.

Chip Griffin: Right.

And, and I, and I do think that it is important to try to, to end relationships in such a way that you leave the door open to future possibilities. Sure. At the same time as you’re seeking to resolve these kinds of issues. I wouldn’t put too much stock in that because the vast majority of clients who have ever left any of my businesses over the years, will say things like, oh, well, we’ll be back when, you know, and, and that may be time certain, it may be when their business turns around, it may be, you know, whatever.

The vast majority never come back, and I don’t believe that’s because, you know, my businesses are all lousy and they were just, you know, making stuff up to make me feel good. I, I think in the moment most people actually believe this, but… Things change for them. Life moves on. Sure. And, and yes. And so maybe it just doesn’t feel like a fit later on.

Right. And there’s nothing wrong with that. Right. And I don’t blame them for that, but I do, I do encourage owners not to say, well, they said they’ll come back in three or six months, so you know, I’m gonna cut ’em a real sweetheart deal. You wanna be careful about that. Make a decision that assumes that you would still be okay with it if they never come back.

I mean, I, I always think that most business decisions. If you, if you look at them through the, the worst case possibility, you’ll make better decisions. And that’s true of, you know, whether it’s resolving something with a client. Pitching new business to a client, selling your agency at some point down the road, always assume that you only get the bare minimum out of it.

Yeah. And ask yourself if you are okay with the bare minimum. If you’re only happy with it because there’s some icing on the cake that you think is coming later, then you probably shouldn’t go down that path.

Gini Dietrich: No, totally agree with you. It’s, you know, counting your chickens before their hatch. Don’t do that.

Don’t ever, ever do that.

Chip Griffin: Nope. Nope. Kill a chicken and eat it.

Sorry, PETA.

Gini Dietrich: On that note,

Chip Griffin: I think, I think probably on that note before we go farther off the rails, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich,

Chip Griffin: and it depends.

In this episode, Chip and Gini explore the impact of AI on client expectations. They discuss how AI is perceived to speed up work, leading clients to have unrealistic expectations regarding turnaround times and pricing.

The duo emphasizes the need for agencies to set realistic boundaries and manage expectations from the outset. They share stories about AI’s inconsistency, particularly in generating imagery and written content, and stress the importance of educating clients on the limitations and potential of AI.

Ultimately, they advocate for leveraging AI’s efficiencies while maintaining transparency and setting clear guidelines with clients to avoid morale and operational issues within your agency.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini I, I used some AI and so we’re gonna conclude this podcast in just about a minute because we’ll get to all the key points that quickly because of the technology.

Gini Dietrich: The instant output, are we getting?

Chip Griffin: An instant output.

Instant amazing, instant results. Amazing. And we can move on with our day.

Gini Dietrich: Okay. But before we get to that

Chip Griffin: mm-hmm.

Gini Dietrich: Happy belated birthday.

Chip Griffin: Thank you. I appreciate it.

Gini Dietrich: You’re welcome. I didn’t get to wish you happy birthday last week because the coffee shop and the satellite office and the wifi, blah, blah, blah.

So happy belated.

Chip Griffin: Thank you. It is, it is nice to have you back in your home office so that we don’t,

Gini Dietrich: it’s very nice to be back.

Chip Griffin: We, we don’t have to, to figure out all the technical issues every week. Yes. And, and figure out can we record, can we not record? Yes. Yes. But I think, I think we only had two weeks where we couldn’t make it work, so Yeah, you’re right.

That’s not, that’s not too bad given the challenges of recording in a coffee shop environment.

Gini Dietrich: Yeah. Summer school is over. Yay.

Chip Griffin: Well, there you go. Alright. We are gonna talk about AI and we are gonna talk about AI making us faster, but perhaps the bigger problem is clients and prospects thinking that it would make us even faster.

Than fast.

Gini Dietrich: Mm-hmm.

Chip Griffin: And so it does tend to lead to unrealistic expectations about how much you can do, how fast you can do it, and of course what that means for pricing. And so these are all challenges that agencies are facing and, and we’re all excited about the technology around us and how we can leverage it.

But, but how do we manage those expectations effectively with clients and, and how do we integrate it effectively with what we’re doing so that, that it adds to the, the results and, and doesn’t just give us a giant headache.

Gini Dietrich: Part of the reason I like this topic for today is at six o’clock this morning, I saw a client in a Google Doc, a shared Google Doc making some changes, and then at 7:30 he emailed and said, have you updated it yet?

And I was like…

Chip Griffin: yep.

Gini Dietrich: Uh,

Chip Griffin: nope.

Gini Dietrich: No. Nope. It’s not, not even 8:00 AM yet on a Monday. Let’s thanks for playing. Let’s settle down. Yep. So that’s part of the reason I like this topic is because I think that that’s exactly what’s happening, happening is everyone’s like, oh, well you can do it faster. So I expect it in minutes instead of hours or even days.

Which may be the case in some, some things, but not the case in all.

Chip Griffin: Yeah. And look, I mean, agencies are, are used to unrealistic client expectations. Fair. It’s something that that agencies have, have mm-hmm. Been dealing with for decades, certainly as long as I’ve been in the business and, and it is always something that you have to be mindful of.

But I think to your point, AI is making it so that people think that all of these things can be done even faster than they really can. Or that AI alone can solve problems and create content or edit content, and there is no need for any human touch. And so that means in their minds that this can be truly instantaneous.

But the reality is that AI still requires a level of management, a level of review.

Gini Dietrich: Yes.

Chip Griffin: And, and is, it is a tool to help us get there, but it, it’s not gonna take over and do its thing on its own. So, you know, a client can’t expect that you get things just as fast as you might from chat GPT when you ask a question.

Gini Dietrich: Yeah. It’s not, it’s not that, I mean, everybody knows this. That’s not the case at all. Christopher Barger, who’s on my team, has a really good article coming out in a couple of weeks about how he used AI for his fantasy baseball draft. And part of the reason he did that, which he explains in the article, is that he wasn’t using AI at all and I was trying to encourage him to use it and said,

Why don’t you see what it would tell you for your baseball draft? Just to like, get an idea of how to use it and what kinds of things. And one of the things he says in the article that he learned is that the, the output is only as good as what you give it. It’s only as good as what you’re training it with.

So because, and because it’s a little bit delayed, you know, he was, he was getting information from it, from players that played two years ago instead of more current players. And so I think we, for tend to forget those things that the AI has to be trained, it has to be trained over time. It still has a delay.

It still hallucinates. So no, you can’t just input a prompt and expect that you’re going to get an output and then send it over to the client. That’s just not how it works. And it’s unrealistic for them to think that.

Chip Griffin: Yes, but as, as we know, you know, clients aren’t necessarily always grounded in reality, when it comes to expectations, and so, so honestly, it, it’s our job as, as agency leaders to help educate them. And to help them to understand what the technology can and cannot do, what is or is not unreasonable to expect of us and our teams.

And so I think now more than ever, the advice that we always give that that as soon as you spot unrealistic expectations, you need to call them out and adjust them. I think that becomes even more important now.

Absolutely. Because otherwise you’ll really put yourself in a difficult position if they assume that it’s quick and easy and cheap to do all of these things that they want you to do.

Gini Dietrich: Yeah, I remember, gosh, just a year ago, maybe even shorter than that, where agency owners were freaking out because they were afraid they were going to lose retainer budgets.

Or have them shrink in size because clients are saying, well, you’re now using AI. It shouldn’t cost this much. I think that that concern has eased a little bit because clients understand that maybe they’re getting more for their retainer dollars, which is great. I think we all, all like to be able to do that for our clients.

But I do think there is this idea that now we’ve gone from Oh, well, you can use AI for your job, so we shouldn’t, you shouldn’t charge me as much to, oh, you can use AI for your job and deliver all of these extra things today in the next 30 seconds or 30 minutes versus a week from now. And you’re right, you should be setting the expectation that it still takes time.

We have other clients, even though we don’t like to let our clients know we have other clients, we do have other clients. There are fires that pop up. Clients have crises, clients have issues, like there are things you still have to deal with, with or without AI. So setting those expectations and realistic expectations is the right thing to do.

Chip Griffin: Yeah. And, and I mean certainly clients don’t like to hear that there are other clients. Right. But, but I think that makes it even more important for us to be clear from the get go that yeah, we do have other clients and, and that’s a good thing. Yeah. And, and part of the problem comes because agencies try to deceive people in the prospect process.

Not necessarily out of any malicious intent, but, but we often try to, particularly as small agencies, we try to make clients think that we are bigger than we are.

Gini Dietrich: Mm mm-hmm.

Chip Griffin: We always try to make people feel like, you know, they are the only client that matters. Mm-hmm. Which in that moment, in that phone call ought to be true.

Yes. You shouldn’t be thinking about or responding to emails to other clients while you’re dealing with, with another or a prospect. But, you can’t make them think that they are your, your only priority forever in the future. Because that’s, that’s just unrealistic. Right?

And, and so we need to work to educate clients about these things and, and not try to allow them to believe that we are bigger, that we are, that they are, you know, the A number one client always and forever that you know, we can turn things around, licketysplit. We always wanna make sure that we understand what it really takes to get the job done and share that in a transparent way with the prospect, because otherwise it becomes a real battle to try to, to walk that back six months down the line when they’re like, well, I don’t understand.

Why is it taking you so long? Taking me so long, I, I did it within like six hours. I, you know, I mean.

Gini Dietrich: Right? I stayed up till 9:30 last night working on this for you. What do you mean? Yeah. Right.

Chip Griffin: And yeah. But, but a lot of that comes because we didn’t correct the expectations soon enough. And, and as we’ve talked about before, oftentimes very early in the relationship. We will respond lickety split, and at 7:30 at night and all of that kind of stuff because, you know, we want to make a good impression. And, and the AI may in fact allow us to do that at times in a more, you know, in a faster, shorter labor timeframe.

But if we, if we do that constantly, you know, we’re gonna be constantly chasing ourselves and, and working crazy hours.

Gini Dietrich: Yeah.

Chip Griffin: And it will destroy our morale. It’ll destroy team morale. And, and it will only continue to feed itself to the point where at some point, even if you are doing all those things, you’re still not gonna meet the expectations that the client has.

Gini Dietrich: Yeah. Yeah. I think, I think this is, this goes to any sort of unrealistic expectation that the client has. And to your point earlier, most clients do have unrealistic expectations. It’s setting your boundaries and setting the expectations, and setting the realistic expectations upfront.

Because when you do that, it’s a lot less painful six months from now. It’s a lot less painful a year from now because you’re not having to have those conversations and everybody’s excited with new clients. Everybody wants to put their best foot forward, of course, but set those boundaries upfront to say, this is what you can expect.

Realistically. Sometimes you might over deliver in, in the case of getting things done sooner or things like that. But those should be like delight and surprise kinds of experiences, not an all the, all the time kind of thing.

Chip Griffin: Right. Now. At the same time, I, I think we need to be careful that we don’t, the pendulum doesn’t swing too far in the opposite direction as it sometimes does.

Yes. And we have to understand that AI and, and other related technology. absolutely will allow us to turn some things around faster and with less work. And so we, we shouldn’t pretend that it doesn’t simply to protect ourselves or to protect our profit margins. We need to, you know, we need to, we don’t need to run to the client and say, oh, by the way, you know, we can, we can now edit these pieces in, you know, a quarter of the time because, you know, the AI gets us there faster or whatever, but, you know, we, we can’t just sit there and sit on it.

For a couple of extra days just to, to, to make the client think that it’s taking longer than it is.

Gini Dietrich: Oh, no, please don’t do that. Geez.

Chip Griffin: Right. So, you know, we need to, if, if we are able to become more efficient and more productive with these things, we should figure out how to leverage that increased efficiency and productivity.

We shouldn’t just try to, to hide it and harvest it for our own benefit. Because

Gini Dietrich: That’s a really great point.

Chip Griffin: Because if we want them to believe us when we say it’s not really going to speed it up as much as you think. Then, we have to be honest when it does, because otherwise we’re not credible.

Right? Right. Because everybody knows that there are places and there are things that AI and related technology will help us do better, more efficient, cheaper, whatever. Take advantage of that. Be honest about it.

Gini Dietrich: Yeah, I, yeah, please do

Chip Griffin: Fight the battle’s worth fighting,

Gini Dietrich: please. Yes, please don’t do that.

Chip Griffin: But, but I mean, but I see it a lot and I, and I’ve seen that advice given too, right? You know, that, you know it, that, you know, we, we need to, we need to protect, our revenue. And so if it, if it’s gonna take half the time, we need to keep charging this the same amount. Well, if it’s gonna take you half the time to do it.

I, I would be looking for how I can leverage that to do something else and produce even better results.

Gini Dietrich: Yes.

Chip Griffin: For the client. I wouldn’t just be saying, no, I, I know it, it only takes half the time for me to do this work, but I’m gonna keep charging you the same. Yeah. Because that may work for you in the short term, but it does not work in the long term.

Gini Dietrich: It does not work. No, it does not. I know I’ve said this before, but we, we’ve always, since I was a young whipper snapper. I had a boss who called it the popcorn list. So it was the list of things that you wish you could get to that aren’t strategically like they don’t matter from a strategic standpoint, but they’re things that, that could be done. Maybe it’s like reoptimizing the website or changing content on certain pages or developing a new piece of lead magnet or something like things that you would like to get to but maybe haven’t been able to. Have that list so that now that you are more efficient because of AI, you can go to those things because that’s the surprise and delight thing I mentioned earlier.

The things that you can do for the client that you weren’t able to before because of time, resources, or, budget resource constraints. Now you can do it because you have, have some of that time and budget available. Absolutely. They will be so happy with you doing those kinds of things.

Chip Griffin: Absolutely. And so why, why not surprise and delight them? But there also is a piece of education here, right? Because a lot of times clients expect because they’ve seen particular examples. Either maybe someone on their team showed them something that that AI was able to do, or they’ve seen someone post about it on LinkedIn or something like that.

We need to help educate them about what the limits of AI are for the specific things that we’re doing for them. And I think one of the, the challenges that a lot of clients have is they will see something that’s just amazing that AI has done and helped produce. At the same time, my experience is a lot of the generative AI is fairly inconsistent in the quality of the output. Whether that’s written or visual or audio or whatever.

And so part of it is to help them to understand, sure. You know, we can have, for your website, we can have all of the images generated by AI. Some of them may be great, some of them may not.

Gini Dietrich: Right.

Chip Griffin: And, and there may be a lot less consistency across them than if we had a human designer doing it. Now I expect that will continue to improve over time.

But we need to help our clients understand what some of the trade offs are, if we are going to rely more on these things to turn things around more quickly. And so there may be a lack of consistency in writing style and things like that. There may be a lack of consistency in the visual imagery.

Sometimes it may not even be usable, and so it might actually take longer. Yeah, I’ve certainly seen a number of examples in working with clients where they used AI for I don’t mean to keep beating on imagery, but imagery seems to be one of the places where it is the most inconsistent. Yeah. And sometimes you’ll look at something and be like, this is fantastic.

I’m so excited about this. And then you’ll work on something similar and you’ll go through seven or eight iterations and it’s just all rubbish.

Gini Dietrich: Yeah.

Chip Griffin: And you’re like, I can’t use any of this.

Gini Dietrich: Any, yeah.

Chip Griffin: And then maybe you finally get something that’s decent, but it, it doesn’t look anything like the other one.

So now you don’t have brand consistency. Across the, the different elements that you’re using. So you really need to, to help your clients to understand where are their limits, where can it help and, and why it is that, that you’re telling them it’s not going to shave off as much time as, as they might think.

Gini Dietrich: I’m laughing as you’re talking about this because we had a client maybe three or four months ago who decided that the positioning, key messages, vision and mission work that we did along with the new, with their web development firm for their new website was not adequate because it hadn’t been run through AI.

It actually had, but okay. And so he redid it. And he sent it over and the team lead for that client called me and it was probably like seven or eight o’clock on a a weeknight. And he was so angry and he’s like, I’m gonna send this to you. I need you to look at it. And so I looked at it and the AI didn’t even spell the company name wrong.

He didn’t like check anything. It talked about a mission for some other company that wasn’t their mission. And the two of us were like, what? And so I called the CEO and I was like, dude. Really? And he goes, oh, I’m embarrassed. I didn’t even look at it. Yeah. I was like, come on. Like, geez. Yeah. So, yes, and, and in images to your point, especially if there’s text, that text is never correct.

Ever. Yeah. Ever. So please, like, you’re right, it could actually take more time in the long run.

Chip Griffin: Yeah. And I mean, and, and there are these services out there that say, oh, you know, we’ll build a PowerPoint deck with the AI. You just kind of tell it what you need. And, and I’ve tried some of them and, and some of them occasionally come up with something that’s, that’s, you know, pretty good, decent. And some of them are just awful and they look like a two year-old put them together.

Gini Dietrich: Right? Yes.

Chip Griffin: And, and so it’s, to me, one of the biggest challenges is, is that lack of consistency. Or the, the flip side is sometimes excessive consistency. Right? Particularly when it comes to text. And you know, lack of, even though you may tell the AI to, to think critically, it often doesn’t. And, and so it will end up just saying, oh, you’re so brilliant.

You’re so smart. This is, you’re right on. I’m so glad you suggested this. I’m like, well, but what, where’s the contrary point of view? And I’ve seen some people with, you know, some prompts that they claim helps the AI to, to be a little bit more constructively critical. And maybe, but, but it, it does seem to generally love its operator in most cases.

It does. Yes, it does. And so you have to be careful about mm-hmm. What that can mean, particularly if you’re using it to edit things or, or those kinds of things because it might, it might not steer you down the right path. And so again, you need to help your clients understand Absolutely. We can use AI to short circuit some of these things, but, but just know that it sometimes it’s gonna help and sometimes it’s not. So sometimes we may need a little extra time, so we’re gonna build that cushion into our schedules so that if the AI doesn’t come through, in the way that we would like it to, we still have room to clean up after it as necessary with humans.

Gini Dietrich: Yeah.

Yeah. I, I think that setting realistic expectations, setting your boundaries, and being very clear about what that all means is, is the right approach. And that doesn’t change, right? It doesn’t change. If we have AI, it doesn’t change. If we have whatever’s next is to come. We always need to set realistic expectations and then, and then hold to it.

Like if you say we don’t answer emails after 5:00 PM don’t answer emails after 5:00 PM.

Chip Griffin: Right. Yeah. And, and I think, I think that is, to me, the point I would underscore is nothing has really changed, right? With AI. Everything has changed with AI and yet nothing has changed. Yes, right. We still need to focus on education and expectations with our clients no matter what tools or technology we’re using.

And if we do that we’ll, we will be in a better position. And obviously that will be an ongoing process. It’s not like we just do that when we sell the contract, we have to continuously educate. Right. And measure expectations. Yes. And adjust expectations.

Gini Dietrich: Yes.

Chip Griffin: As circumstances warrant.

Gini Dietrich: Yes, indeed.

Chip Griffin: So with that, clearly the AI didn’t help us enough.

We didn’t finish everything here in one minute.

Gini Dietrich: Shoot. Oh, well.

Chip Griffin: But hopefully you enjoyed the journey in listening to us and we shared a few points that you might actually appreciate, might even help your business. You just never know.

Gini Dietrich: Maybe. Hopefully.

Chip Griffin: And if not, feel free to stick this into AI and see what it comes up with.

Gini Dietrich: Now I’m kind of tempted.

Chip Griffin: Yeah, there you go. So on that note, I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

In this episode, Chip and Gini focus on the issue of employees over-servicing clients. They discuss the reasons behind over-servicing, including fear of client dissatisfaction and insufficient initial project scopes.

The hosts emphasize the importance of educating employees on the long-term negative impacts, both on agency profitability and client relationships. They advocate for involving employees in strategic planning and scoping processes to ensure accurate budgeting and foster accountability.

Chip and Gini also highlight the benefits of regular communication and collaboration with team members to prevent recurring problems and enhance overall agency efficiency.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, I don’t really have a, a cute opening to this one, so I’m just gonna dive right in, which I don’t, I don’t know, I just, in, in the 10 seconds that I had waiting to, you know, to start, I come up with, come up with anything that, okay.

That was even halfway lame or useful or anything. So it is what it is. We’re gonna talk about over servicing, but not the way we’ve talked about it before. Because we’ve talked about over-servicing in terms of how big a deal it can be to the profitability of your agency. We’ve talked about how to identify over servicing.

We’ve talked about how to, how important it is to show your employees when they’re over servicing. But we’re gonna talk today about how do you solve that with employees who understand that they’re over-servicing, maybe they understand that it’s a problem, but they continue to do it anyway. And it, it’s not out of malice.

They’re not doing it because they want, you know, you to suffer from a profitability standpoint as an agency. They’re doing it because, as I think I’ve shared previously in my earliest role in an agency, I would overservice a client because I knew that they were gonna be unhappy with me if I didn’t do it.

And, and so I didn’t want to be yelled at by the client. Mm-hmm. Other people might over-service because they’re afraid that if they don’t do something today, it’s just gonna cause more work for them in the future. And so in their minds, they’re making a rational decision for their own situation. But it may not be right for the business.

So how do you handle that? I mean, other than just firing the employee who refuses to stop over-servicing? Because that’s, that’s not a great solution in most cases. No. Sometimes I, I imagine it might get there, but, but that’s what we’re gonna talk about. How do we, what strategies do we have for dealing with those employees who are over-servicing despite our best efforts?

Gini Dietrich: I’m sure I’ve shared this story before, but I’m gonna repeat it for those who have not heard it. Um, I had an employee who was doing exactly that and was over-servicing and it was a really tiny client. It wasn’t a huge client. I think she really enjoyed working with the client and wanted to do more work for her, just because she enjoyed the work.

She enjoyed the client. She didn’t want to have to tell the client no. And after, I think she was here probably six or seven years after she resigned, the client said to us, well, this person used to do this, this, this, and this. And we were like it’s not in the scope. She’s like, but she did it. And so we had to kind of back, I backpedal to say like, I understand that she did it.

She was over-servicing. We’re really sorry, but we have to get this in line with the scope. If you want to change the scope or you want to add budget, we can do that. But like we can’t continue to do $20,000 worth of work for 5,000 a month, which is essentially what it was. And the client ended up, ended up leaving because of it.

You know, to this day, I’m reminded that even though you think that your, your employees think that they’re helping a client in the long run, it’s more upsetting to them to find out that you’ve been over-servicing all this time. And they’re not, they, they’re not paying for those things. So I think it’s, it’s a double edged sword a little bit from that perspective of it’s not just that they’re you know, spending $15,000 more a month in time than the client is paying. But also on the client side, it’s really upsetting for them to discover that that’s been going on, especially when you, you have to have the conversation to scale things back.

Chip Griffin: Right. And, and I think that, that if they understand the long-term damage they might be doing to the client relationship, that might help them to better understand it.

So like a lot of things, you know, a good first step is more education and, helping the team members understand the consequences of that action beyond just it’s eating into our profitability. Right. Because I, I mean, I think that that’s the, that’s the most obvious thing that, that employees will Oh, sure.

It’s, it’s eating into our profits, but we’re still doing the right thing. We’re still right. We’re still helping them out. And, and unfortunately it, it takes away the opportunity for the agency to solve things in a different way with the client. That’s right. If the solution is simply to continue over-servicing.

And so, you know, it might be that you have to work with that team member rather than just saying, stop over-servicing. It’s, okay. Why are we over-servicing and how can we go about solving that problem. Because the over-servicing in, in many cases, particularly if it’s the, that you’re afraid the client will be unhappy.

The real problem is not the over-servicing, the real problem is meeting expectations. You know, changing the scope of work. There are a lot of things that you can do to address it apart from just saying, Hey, stop doing that.

Gini Dietrich: That’s right. That’s right. Yeah. One of the things that we started doing, I think in, during the pandemic, I think it was during 2020, is we moved from annual planning and annual contracts to quarterly. And what that’s allowed us to do is get on top of the over servicing because we, we all, I mean we certainly, you know, set goals and KPIs and all that for a year, but then we break them down by quarter and we say, okay, with the client.

These are the goals. These are the things that we’re going to do to achieve those goals. These are the kinds of results we expect. And then we get, we get to work. And in the next quarter we’re able to say, these are the things we worked on. These are the extra things that we’re doing because the teams are over servicing.

These are the results. These are the things that we didn’t, that didn’t work as well as we thought they would. So we’d like to tweak. And you have that ongoing conversation with them. So that they are part of the decision to say, oh, I see if we do this and this, we’re gonna have to either scale back on this or we’re gonna have to add budget.

And there it’s an ongoing conversation so it becomes less conflict ridden. So it doesn’t, it doesn’t feel like we’re having to go to the client and say, you know, if you add that we’re gonna have to scale back or, and, and it doesn’t make the team feel like they should just do the work because there’s this ongoing conversation where they’re part of it all of the time, and that has really helped us scale back on over servicing.

Chip Griffin: Yeah. And, and I think, you know, just as you want to avoid that, you know, creating those points of conflict with the client, I think that that owners, managers should be trying to avoid those points of conflict with the employee as well.

And so it’s not simply about saying, Hey, stop over-servicing and instead you want to make them part of the solution. And so, you know, my suggestion is, as I often suggest with these problems. Ask them what they would do about it. Love it. Ask them, how could we scope this better in the future so that we make sure that we’re incorporating all of this work that we actually need to do in order to produce the results that the client is expecting.

What could we change with our pricing? What other changes could we make internally in order to get there? Because if, if you start making them part of the solution as opposed to simply saying, stop doing that, right? You might have a better chance. Not always, but you might have a better chance of getting a successful outcome.

So, try to make it less confrontational with the team member and try to involve them in the problem solving more than you probably are.

Gini Dietrich: And I also think there’s something to be said for, you know, they probably, because they’re over-servicing, are working more hours than they should. They’re not able to get to other clients that they should be working on.

They’re at capacity. So I think that’s an education around that too, to demonstrate, you know, if, if you’re literally spending $15,000 more a month with this client, think about what that might look like if you shifted that time and that budget allocation to this client or this client. Like let’s talk about what that might look like.

So they start to understand from a business perspective what the implications are, the consequences are of them making these decisions.

Chip Griffin: Yeah. And, and I think also helping them to understand that it, you know, over-servicing is not a victimless crime. It is not, it is not merely the, the agency’s bottom line and, and some, you know, mysterious profit margin that’s, that’s being impacted.

It’s the impact on your colleagues. And, you know, you can sit there and say, okay, well, you know, I’m helping improve my own situation because I’m, I’m doing it today so that I don’t get forced to do it tomorrow on a crisis basis or something like that. But think about what that means for your coworkers, because if you’re working with multiple people on a project and they come to expect over servicing from you, they’re gonna expect it from the others on the account.

Or as, as you advance and, and maybe you become a supervisor. And, and you’ve got other people working for you now, now you’ve, you’ve burdened them with having to do this and meet those expectations of over-servicing as well. So, I think it’s really helpful in many cases to help the team members understand that it’s, it’s not just about, you know, what it means for them, it’s the impact that it can have on their coworkers as well, because that may make them more sympathetic to solving the problem because it’s no longer just, you know, that the profit margin isn’t what it should be.

Gini Dietrich: Yeah, because the profit margin, I think you’re right, is so vague and I think most people think that the profit margin means that the owner gets all that money and I don’t get anything of it. So what does it matter to me if… Right? They don’t understand that.

Chip Griffin: Right. And, and the employees always think that the, the owner is making a ton of money anyway.

Always. So, I mean, it doesn’t matter what you’re actually making, I can guarantee you they think you’re making more than you are.

Gini Dietrich: They think you’re making millions of dollars for sure. Yeah, so I think it’s, it’s the ongoing education, it’s the coaching, it’s the mentoring, it’s helping them understand, I love the putting them in the shoes of their colleagues because I think that helps give them some empathy that they may not, may not be thinking about.

Helping them understand, you know, all of these things have consequences. And so what does that look like? So it’s constantly coaching, it’s constantly educating, it’s constantly talking about talking them through, and I love the idea of bringing them into the solution. So what would you do?

Chip Griffin: Yeah. And, and I think at, at the same time, we also need to listen to them and, and accept that we might actually be wrong.

And it, it might be in our minds over-servicing ’cause we were budgeting a certain amount of time, but maybe our time budget was wrong. So yes, maybe they’re over-servicing against the budget, but not against the expectations that we set with the client when they signed on. And so it’s, it’s really important to look at that and say, okay.

Could we actually meet those expectations that we agreed to at the beginning with fewer hours? Or is it just that we thought it could be done in 10 hours a month and it really does actually take 20 to do it? In which case my view is we kind of gotta eat that as the agency.

Gini Dietrich: We gotta eat that. I totally agree with that.

Chip Griffin: If, if we estimated wrong that’s not on the client. Yep. And we can’t tell them that’s over-servicing. It’s that we just estimated wrong. We budgeted wrong. And you know, we learn and hopefully don’t do that again.

Gini Dietrich: And that my friends, is why it’s so important to track your time. Because now you know for the next time that it actually takes 20 hours and so you can budget effectively the next time.

But that’s, that’s a really great reason for tracking time right there, if for no other reason. Yeah, and to be able to budget appropriately.

Chip Griffin: Right, and consistently reviewing that so that you can learn from it, so that you can estimate better. So that you can price better. So that you can scope better. So that you can set expectations better.

And, and I, you know, one of the things that always concerns me is when I see this as an ongoing issue with an agency, right? Because that suggests that, that perhaps lessons are not being learned, or at least they’re not being addressed in the proper way. Correct. Look, I, I accept that, that there will be over-servicing on, on an account.

I just want to make sure that we’re not doing it the exact same way with the exact same kind of client and the exact same kind of project again. We need to address those kinds of things so that we’re, we’re making some kind of meaningful difference until we do get it right. So I think it’s, it is important that we’re taking lessons away from everything we do, but particularly in the area of over-servicing.

Gini Dietrich: Yeah, and I think that so many of us, and I’ve made this mistake, I’m sure you’ve made this mistake. We go to work with a new client and they say, we have $3,000 a month to spend, but we want to have, we want to do this, this, this, and this. And in order to get the business, we say, okay, when we know it’s probably gonna be double or triple what they ha, what they’ve budgeted.

And instead of saying, we can do this and this out of your priority list for that amount, we just say, okay, and then we’re stuck in this cycle of over-servicing, not being profitable, all, all the things. Right? So that’s, that’s a, it’s not directly, directly with the employees, but I think that’s part of the reason we over-service is because we tend to want to win the business and just say okay to things we shouldn’t say okay to.

Chip Griffin: That, and I think the other thing, and we’ve talked about this many times previously as well, it’s because we don’t involve our team members Yes. In that scoping and pricing process.

Gini Dietrich: Yes, yes.

Chip Griffin: And so what we end up doing is we, we hand off to them a finished product of scope and price and an estimated time that it should take to get it done.

And if they were not part of that process, then first of all, we might have overlooked things. We might have overestimated how productive someone can be. We might have underestimated the amount of time it takes someone who is not as expert as we are, not as experienced as we are to do it. But more importantly, by involving the employee in that process, it makes it harder for them to claim that you didn’t scope it correctly to begin with because they were engaged in it. And hopefully that means they’ve bought into it. And so they can’t really say, well, I, I don’t know why you would’ve told them that we can do this because it takes way more than two hours to do a press release or whatever.

Gini Dietrich: Right, right.

Chip Griffin: Because if they’re helping with it, they should have pointed it out before, and if not then, then they shoulder some of that responsibility, as well.

Gini Dietrich: And it gives them the opportunity to know the client from the beginning versus being told what to do. They’re part of the strategic process.

They’re part of the creative thinking, they’re part of the entire process, and they’re more brought in from the beginning. I mean, I made that mistake a lot when I was starting, when I started my agency, because new business is not billable, right? And it’s un billable work. And so I, I thought I was protecting them by giving them all the billable hours, all the billable time.

But in fact, what I was doing was they weren’t bought into the process. They didn’t like the ideas, they didn’t like the approach, and there was no creativity from them. And so it was just like they did, just did mediocre work.

Chip Griffin: Yeah, I mean we, look, we’ve gotta be collaborative with our employees and that doesn’t mean it’s gotta be, you know, all one of these kumbaya things. We’re all hugging and, you know, this is all great and, you know, and we can have, you know, ignorance just so we can be happy. We, we need to be collaborating in order to get better results.

We need to be collaborating so that our team does feel empowered. Because the more empowered they are, the more likely they are to produce the results that we want and our clients need. And so it needs to be approached from that standpoint as opposed to the old fashioned command and control. And, and if you are, if you are still of that management mindset that you know, was popular in the past… you need to change. You just, you can’t do that. You need to have that much more collaborative arrangement. Understanding that you still are the boss. I’m not taking that away from you. I’m not taking the final decision making authority away from you, but you still need to engage your team more in the problem solving, in the budgeting, in the estimation, in, in all of the different things that you do.

Gini Dietrich: Yeah, I mean, I’m sure I’ve told this story before too, but you know, during the great recession when I had to let everybody go because we lost all my clients. I’ll never forget this as long as I live, one of the employees came up to me later and said, you know, if you had asked us for help, we probably could have helped you find some solutions.

And I’ll never forget that because I didn’t involve them. I didn’t, I didn’t want to scare them. I didn’t want them to, you know, have several months of, like, worrying that they were gonna lose their jobs. I decided myself that it was better to just rip off the bandaid and that was not the right decision.

And I take that comment from her into all of these things where I involve everybody as much as I can. There’s, you know, there’s some things that you, you can’t talk to your employees about. Right? But as much as I can, I’m as transparent as I can be. I give as much information as I can, and I ask for their counsel and their support in making decisions for all these reasons. Because they’re, they’re more bought in. Because they don’t over service. Because they have more loyalty. Like all, all of the reasons.

Chip Griffin: So bottom line is, you know, hope is not lost. If you have team members who continue to over-service even after it’s been pointed out, you just need to make sure that you’re doing more communication, more listening, more education, and hopefully those things will, will add up over time to get you to where you want to be.

It’s not gonna be an overnight solution. You’re not gonna be able to just go in and say, Hey, stop and expect that it’s gonna happen. But you know, if you work at it, you can have success with this.

Gini Dietrich: For sure. Yes, you can.

Chip Griffin: So I think with that we will, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

In this episode, Chip and Gini discuss the importance of having a clear vision for where an agency is headed while also acknowledging the need for strong operational skills.

They explore different types of agency owners, from visionaries to those who excel in operational management, and emphasize the necessity of balancing these roles within a team. The duo highlights the importance of complementing one’s weaknesses by hiring the right people, whether it involves bringing in operational expertise or visionary ideas. They also share personal anecdotes and practical advice on maintaining this balance for the long-term success of an agency.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, I’m having a vision. I see something.

Gini Dietrich: What do you see? Dead people?

Chip Griffin: No, I’m not that harsh today. No, I, that was not the greatest introduction probably, but you know, hey, that’s par for the course.

But what we’re gonna talk about today is when you do or don’t have a vision for where your agency is headed and your vision for what you can do and all of that. And I think there are different kinds of agency owners, some who have a vision or idea, big ideas, that kind of thing. And, and others who are a little bit more, let’s say, workmanlike. And, you know, they can execute really well and, you know, they want to keep growing, but they don’t consider themselves a, a big picture, visionary type.

And, and both can be successful, but I think there are things that both kinds of owners need to be aware of and thinking about.

Gini Dietrich: Yeah, I totally agree. And you know, I think we, I think there’s so much focus just generally on you need to be visionary. You need to be strategic. You need to think about, you know, where the, the business is going.

And there’s something to be said for people who are operationally focused. I am not one of them, and that’s, it’s not my strong suit and I really wish that I had some of those skills because I think I, I would’ve grown my business a lot faster and a lot less expensively than I have if I had that skill set.

So I think there’s something to be said for people who like know how to manage their business financially, know how to manage their balance, their balance sheet, know how to like run it like a tight ship versus people like me who are like, oh, what if we tried this? And there’s no process, there’s no standard operating procedure.

I imagine I’m really hard to work for because of that.

Chip Griffin: I, I would imagine. Mm-hmm. Yeah. But, but you, you are sort of, I mean, you are a, a visionary owner almost in the extreme, right. You, you created a whole new way of doing marketing and PR that the rest of the industry is following. Yeah. So, I mean, you can’t be much more of a visionary than that.

And, but that said. Not every agency owner is that, nor do you actually need that,

Gini Dietrich: nor should they be,

Chip Griffin: in order to be successful, everybody has to kind of find their lane and figure out how to be successful. And, and to your point, you also recognize where your weaknesses are and that is on the operational side.

And so I think, you know, regardless of what kind of owner you are, you need to try to augment that. And fill in the gaps that are left by your weaknesses. So you would obviously need people on your team who are much stronger on the operational side of things. If you are an owner who is a really good manager and, and business builder and those kinds of things, you may need someone who has at least enough vision for the, the client’s needs.

Maybe not, you know, huge vision for, you know, where the industry is headed or something like that, but who can at least, you know, supplement the, you know, what you have for expertise. With a little bit more of that, you know, pushing the envelope on vision. So you’ve gotta really balance it in order to have success.

Gini Dietrich: Right. I, before we started, we hit record on this. We were talking about how like in, in your businesses, you, you had somebody who was sort of the out there talking to people, salesperson, and then you are back in behind the scenes doing the work. I think you need that give and take a little bit because.

Not, not everybody has the same, you can’t be a visionary and an operations person. It’s pretty rare, right? So how do you bring in somebody to help you where you’re, you’re, you’re weak. And I don’t necessarily know that it has to be a partner, a business partner. You know, I think I can think of lots of organizations.

MarketingProfs is one, one where Ann Handley is the, the visionary. She’s the one out there. She’s the face, she’s the one building the brand and all that. But she’s not an owner. Of MarketingProfs. So, you know, thinking about those kinds of people who can supplement where you’re weak is a real, is a really smart thing to do.

And to your point, I don’t think that you have to be a visionary as long as you have somebody who’s on your team, who’s willing to be out there, and who’s willing to be the face of the company.

Chip Griffin: Yeah, I mean, I, I would agree. It absolutely does not have to be another owner. In fact, there’s, there’s benefits to it not being someone who has an ownership stake in the business because it, it gives you a little bit more flexibility, right?

You can, yep. You can, it, it can work, work really well as it did for me with one of my businesses years ago where we did have that sort of, that balance in the partnership and, and how we approach things. But you know, I also, you know, later in my career, I sort of became the non-operational person and the, the person out there pushing the envelope. And, and I’ve had, you know, people who worked for me who were sort of, you know, in fact one of ’em described it as, as he was sort of the rubber band that kind of kept pulling me back so that I didn’t get too far, off center, if you will, with some of my ideas.

I love it.

And, and, I think that rubber band is actually a great analogy. Right.

Gini Dietrich: That’s a great analogy.

Chip Griffin: You know, you kind of, you, you wanna stretch a little bit in both directions, right? If you str- you know, stretch operationally. Then that helps you from a profitability standpoint and you know, and results standpoint because you can kind of be more repeatable in the results you’re producing.

On the other hand, you want someone who’s pushing the envelope on figuring out, you know. Where are we headed? You know? Mm-hmm. What does AI mean for us? Mm-hmm. Mm-hmm. How is the, how is the world of PR and marketing changing and, and how can we apply new ideas and fresh thinking to that? So, so having both of those, but making sure that neither one gets too far away from the other.

So that rubber band is really a great example because at some point’s that rubber band starts to pull you back in. That’s great. And if you push too hard, you snap the rubber brand and that’s not helpful.

Gini Dietrich: Yep. That’s a really great analogy and a really great way of thinking about it. This reminds me of, when I left Fleischman Hillard, after doing PR for many years, I went to an ad agency to build their PR department. And I had, it was me and one other guy, and he was my boss. So he was like the PR director and, it was our job to build the PR department for this ad agency. And he and I would sit in meetings and he would come up with all of these great ideas for the client.

He’d be like, and we can do this, and we can do this. And he would get to the point where he’d be saying great ideas. I mean, phenomenal ideas. He was a great idea person, but nothing that we could execute ’cause we didn’t have the resources, we didn’t have the capacity, we didn’t have the budgets, all that kinda stuff.

So I would literally kick him under the table to make him that I was his rubber band. I was bringing him back to make him like, oh, that’s not something we could do. It’s to, to sort of bring him back and we would position ourselves at, in a conference room table and a, at a conference room table in a client’s office so that I had the ability to kick him.

Where the client wouldn’t know that, so that I could bring him back to reality a little bit, because he would say stuff that we just couldn’t do. And then when we’d go back to the office and I’d be like, dude, we can’t do that. So, right. So I was his rubber band a little bit. So I, you know, there are, there ways that I think you can think about it to help you understand like…

you can have a great idea person, but you also have to, to fill in, like within these parameters. Don’t come up with these great ideas that are gonna cost the client $20 million when you have a budget of 500,000. Right? So it was that kind of stuff. So I love that rubber band analogy. Because you can start, start to think about, all right, let’s pull in either direction to make it work.

Chip Griffin: Yeah. See, I, I wish I had thought of the, the kicking approach with my business partner years ago because that, that would’ve been helpful. Because we had a lot of those same kinds of meetings, you know, where he would be saying all these, you know, lovely things that, that we’d be able to do. And, and I’m just looking at ’em like, are you crazy?

Why are you’re out of your mind promising these. Things, right.

Gini Dietrich: Uhhuh

Chip Griffin: And, and it got to be sort of a, a joke because he would almost kind of look at me and, and not quite wink, but there was the twinkle in his eye a after he was finished talking, that he knew what he had done. And so afterwards I’d be like, why the bleep did you promise all those things and that timeline and all that, we can’t do that.

He said, you’ll figure it out. And unfortunately, most of the time I did.

You did. Sure.

So, you know, victim of your own success sometimes uhhuh on that.

But I, I think the other, the other thing to to remember is that you, you don’t have to be in one lane for your entire career. Just as I was the more operational person at that point.

Over the years, I have become much more of the, the stretchy part of the rubber band, you know, on the visionary side. And over the course of our careers, we will evolve. And the things that we enjoy doing, I mean, I know a number of agency owners who love the, the planning and implementation and, you know, having the forecasts and, you know, pulling everything together and, and all that.

I mean, that is a very different kind of owner than someone perhaps like you who’s out there and like saying, let’s, let’s just completely rewire the whole industry. Forget it. Let’s just throw out, you know, a hundred years of thinking and we’re gonna do something totally different. And it worked for you, so you can’t question it.

But, it it is something where, you know, we will all have things that we, that are of interest to us today that maybe 20 years from now we’ll think differently.

Gini Dietrich: Absolutely. I mean, I think about it from this perspective too, like when social media became available for businesses. We all spent time on it, right?

And we were all trying to figure out like, what’s the strategy? How do we use it? How do we help it grow our businesses? How does it help us build our brands? Now you could not pay me enough money to sit on social media all day. Like that’s just, I’ve grown out of that and now I understand how to use it and right?

And I need to pay somebody to do that work. So it’s the same kind of thing. You may very well, 10 years ago have been really good at one thing and now you’ve grown into something else, and that’s totally normal, right? That’s what you should be doing. So don’t beat yourself up. And the other thing on, on the visionary standpoint is if you don’t feel like you’re, you’re a visionary person, I, I like for you to sort of look at your business and go, what do we do really well?

And what do we do that’s different? And when we’re talking to prospects, what do they say is the most annoying thing about their previous agency and how do we fix that? And when we talk to clients, what do they say that that we do really well? Or what do they compliment us on all the time? That’s not necessarily visionary from the perspective of I’m changing the entire industry, but it’s visionary from the perspective of I’m taking what we do really well and pushing our clients’ businesses forward in a way that other agencies can’t do that.

So you don’t have to be like, Oh my gosh. Let’s look at how this whole industry operates and change it. But, but really look at it from the perspective of how do we do what we do and how do we do it so that we’re helping our clients as businesses succeed? That’s, that’s visionary and I think that’s a really easy way to sort of stair step into what we’re talking about here.

Chip Griffin: Absolutely. And, I think that some agency owners worry that they don’t have enough of the the big idea vision and that they need to have that in order to win business from clients. And I, I think the reality is that most of you don’t need to be thinking that big in order to win a strong amount of business,

Gini Dietrich: right.

Chip Griffin: For your agency. And so, you know, you need to be, and, and we go to, I mean, I’m sure you’ve seen plenty of, of agency websites or marketing materials where they, they try to make it sound like they’re, they’re doing something entirely new. And in fact they’re basically doing the same thing as everybody else.

They just are trying to frame it in, you know, some magical way. And, and I don’t think you need to do that because ultimately that’s not what clients care about. Clients care about what are the, what’s the work you can do for me? What are the results it’s gonna produce and how much does it cost? Apart from that, they don’t really care that, I mean, even, I would imagine for many of your clients, they don’t care that you invented the PESO model.

They just care about what you’re proposing to do for them. And is it producing results that help grow their own businesses?

Gini Dietrich: That’s right. And the other other thing I’d add to that is whether or not you, they will enjoy coming to meetings with you because if they don’t like you and there’s no chemistry, and they stop coming to meetings, the relationship will sour.

So I would add that to it, but that’s what they care about. They care about results. They care about how much it costs, and they care about whether or not they’re going to enjoy coming to meetings with you.

Chip Griffin: Yeah, I mean that, you know, it, it, there really is something to be said for personal chemistry when it comes to the, the agency client relationship.

And most of the time when I see relationships fail, there’s probably, there’s a problem with the, the personal chemistry of the individuals on both sides of the table. When they thrive, usually there’s a good match. Doesn’t mean that you can’t have success when there is some tension. It doesn’t mean that you can’t fail when everybody’s still happy with each other and kind of seeing things the same way.

Sure. You know, I, particularly in the deciding moments, it really is about that more so than anything else. And if you, I mean, let’s think about it. We don’t wanna work with people that we don’t enjoy being with. Right. It would take you, you have to, none of us do. If you dislike the person that you’re talking with, you have to cross a much larger hurdle in order for yourself to, to say, yes, I’ll, I’ll go ahead and, and I’ll enter into this business arrangement with them.

So, you know, we should give into that, right? Mm-hmm. We, we shouldn’t try to fight that. And if we’ve got, if we don’t have the right fit, move on, go find someone else. But that we’ve now ventured into a whole nother topic that, that perhaps would be worth looking at as well. But it, but it’s a little apart from the vision except to the fact that there are some clients who do wanna, you know, talk with someone who they think is a visionary.

 But the vast majority, vast majority just care about the specifics of what you’re gonna do for them and, and they don’t really care that you can come into a meeting and, you know, sound all highfalutin with your ideas.

Gini Dietrich: Yeah. I think that, I think the clients respect somebody who can come up with new and interesting ideas that would help build the business and, and move things forward. But exactly to your point. Can they do the work? That’s what they care about. Can, can you actually execute on the work and, and deliver the results that you, you’re saying you can. That’s what they care about.

Chip Griffin: Yeah. And those ideas don’t have to be visionary. I mean, frankly, the, the work that I do with SAGA with agency owners.

99.9% of it is not visionary or original or anything like that. But I have ideas based on, you know, the things I’ve experienced, the things that I’ve observed, and so, you know, they’re, they’re relatively simple, but they’re ideas that can help individual owners in the moment with the challenges and opportunities that they have.

That is not being a visionary. That is just sharing the knowledge and expertise and wisdom that you have as someone who has been there, done that. And that’s how we are with our clients as an agency. And so that, that doesn’t require grandiose visions. It only requires that you have insights and that you can listen to what the client is telling you, and that you can feed into that with those ideas that you’ve come up with along the way and the things that you’ve seen work or not work.

Gini Dietrich: And the client may view it as visionary because it’s not something they’ve tried before. Sure. Or they’ve done before. So it’s, yeah. It may not feel that way to you, but to the client is like, Ooh, that’s fantastic. We haven’t even thought about that.

Chip Griffin: Right. And, we see this today with, with a lot of agencies as they’re looking at AI and, and they’re thinking, you know, instead of thinking about how can they use AI to help with their daily blocking and tackling, they’re like, we need to create our own AI models and do all these fancy things.

And, and look, there’s a, there’s a role for agencies that can do that and can do it well. And, and I’m sure there are agencies that will succeed because they build a lot of these things internally to serve their clients’ needs. Sure. But the vast majority of agencies don’t need to do that to be successful.

And so, you know, if you’ve got the, the skillset, if you’ve got the, the bandwidth to work on these things, if, if you’re actually seeing results from it, that’s fine, but don’t feel obligated to come up with some really innovative use of AI for your clients and the, the work that you’re doing.

Focus instead initially on the basics. How can it help me do the, the day-to-day tasks that, that the team and I need to do and we can do them better slash more efficiently and, and put ourselves in a better position to produce results for clients. And if you start thinking about those things that way, instead of thinking, geez, you know, we really have to have that, that huge idea, that big vision, I think most of you will succeed to a greater extent than if you overinvest in trying to find that, that huge game changing idea.

Gini Dietrich: 100%. And if you’re trying, if you’re investing in trying to find that game changing innovative idea, and it, it’s not coming in. It’s not coming in, it’s not coming. You’re not getting any, getting any work done. If instead you focus on what you’re saying, which is using it to make your, make your team more efficient, finding new ways to do things, all of that, you’re getting work done.

You’re getting, you’re having results, you’re making progress versus, and that’s what clients care about versus trying to come up with you know, something 18 or 24 months from now that may or may not be effective.

Chip Griffin: Spot on. Well, I, I think we’ve covered, you know, this topic as well as we can. So my, my vision is for more successful agencies because they’ve listened to us.

Gini Dietrich: That’s right. That’s what I see. I like it. I see that.

Chip Griffin: So on that note, we will draw this episode of the Agency Leadership podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.

In this episode, Chip and Gini discuss the frequent occurrence of receiving offers to buy agencies and how to handle these communications.

They share their own experiences of receiving such emails, including the prevalence of fraudulent or unserious offers. Gini describes her method of vetting these emails, such as examining URLs and LinkedIn profiles, and emphasizes the importance of legitimate connections within the industry.

Chip provides further insights into the credibility of business brokers and the typical behaviors to watch out for. Both caution against making emotional decisions and underscore the necessity of due diligence, patient decision-making, and listening to one’s gut feelings.

They conclude by highlighting the importance of proper advice and support for making sound decisions in the agency selling process.

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to their episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: And Gini, I’ve got a buyer for your agency. I’d like to have a conversation about it.

Gini Dietrich: Yes. Okay.

Chip Griffin: This is, this is an email that, that a lot of us get. Frankly, I’ve gotten it for all my business agencies, oh my gosh, software companies, everything.

That steady flow. It’s, it’s sort of like, I dunno about you, but these days I get a steady stream of, of emails, trying to sell me janitorial services. I don’t really understand

Gini Dietrich: janitorial services?

Chip Griffin: Yeah. I don’t understand it because I don’t have any actual offices, so.

Gini Dietrich: Right. What are they gonna janitor?

Chip Griffin: So who knows? But in any case, it is very common for agency owners to receive emails from someone who says that they either have a buyer for their agency they’re interested in, in buying the agency. They have some, some potential opportunities to explore all these kinds of things. And, and I think that it would be helpful for us to have a conversation around this so that, that we can share our experiences and hopefully people can have some perspective on these when they come in.

When should you reply? When shouldn’t you, how should you handle those conversations if you do decide to proceed with them? Because it, it certainly… Most agency owners I know have at least explored the idea in their own minds of selling someday. Sure, sure. And so it can be very appealing, particularly if it hits you on the right day when you have just that right level of frustration with clients or employees or whatever to say, ah, okay.

Gini Dietrich: Alright. Yeah, yeah. Let’s do this.

Chip Griffin: So what, what do you do when you get one of these emails? And I’m assuming that you get a lot of them.

Gini Dietrich: I get so many. I usually just delete them. Every once in a while I’ll take the email address and just look up the website. And I would say a good majority of them are emailing from fake accounts.

So the websites that they’re quote unquote emailing from don’t even exist. So I get a lot of 404s or that is for sale on Go Daddy or whatever it happens to be. A lot of them, and I’ve seen this in practice on the lead generation side where, you know, a lead gen company will say to you, oh, we can get you, and we’ve talked about this 15 to 20 qualified conversations every month.

And what they do is they mirror your email platform and your, like spinsucks.com for us. They mirror it in a different platform for better software, for lack of a better term. And it’s not actually coming from spinsucks.com. It’s not actually coming from your URL, but it, it’s coming from this fake duplicate mirrored URL, right? So that when that happens, you can tell that it’s a lead generation company, that they’re just trying to, you know, mass emails to see who, who they can, that they can catch.

So I always take the URL and I or the email, and I look at the URL and I look, I put it in to see, and I would say eight times out of 10 it’s a, it’s a URL that doesn’t exist. So then I just delete those.

For the ones that look interesting, I’ll actually look the company up to see like, have they done other agencies? Are they legit? And I would say eight times out of 10, they’re not legit. So you kind of just, if you’re, if it hits you at the right time, just do your due diligence. You can find out pretty quickly if they’re legit or not. You know, there are probably five or six companies in the agency space that do really nice job with mergers and acquisitions and just like you would hire people, hire you based on your trust and how people feel about you and your reputations.

I would say the same thing with our businesses, that we really should be looking for organizations that have experience in our industry and have a reputation already.

Chip Griffin: Yeah. I mean, I think, I think all of those are good points. You know, certainly, like you, I’ve deleted most of the ones that I’ve seen over the years because they just, they don’t feel right.

And I, and I would say if someone is, is legitimately reaching out to you for this kind of thing, it should be a very personalized email. If there’s no indication that they know anything at all about you. Probably a good reason to just hit delete. Yep. Because at, at that point it is probably just, you know, trying to see if the account’s alive or, you know, just some intern trying to, you know, generate leads for a business broker that’s trying to get you to pay a retainer or something like that.

So, yep. So, so I think that’s a great reminder, to not worry, not think too much about them unless it, it really grabs your attention for some reason. If it does, I agree with you. Start by trying to find out whatever you can. That means looking up the domain of the email address. The other thing I will frequently do is put the person’s name until LinkedIn, and see, because if, if it doesn’t come up associated with that company assuming that the website is alive. You know, that tells me that, that they’re probably not legit. They’re probably, they’re an outsourced sales rep, and so therefore not a serious person for me to be having a conversation with. Sometimes you’ll do it and it turns out they are an intern. And it just says, intern on it.

Okay, well, I’m not having a conversation with an intern about selling my business. If they’re really interested, they can find someone more senior to reach out to me. But let’s let, let’s assume that we clear these hurdles. Let’s assume we haven’t deleted it. We Google ’em, they look more or less legit.

Let’s start with, they’re from a business brokerage kind of organization. I usually try to find out if they are focused on the agency space or if they are generic. There are a lot of business brokerages out there. You go to their website and they show 75 different industries that they quote unquote, specialize in. Manufacturing is very different from being a PR agency.

Gini Dietrich: Right.

Chip Griffin: The way you sell those businesses is wildly different.

Gini Dietrich: Wildly different.

Chip Griffin: Yes. Can one firm rep both? Yes. Is it likely to be the best experience? Not so much.

Gini Dietrich: Yeah. You know, I will say this, that it’s flattering of course, to have people reach out to say that they’re interested in purchasing your business or rolling you up into a larger agency umbrella model or something like that.

It’s flattering. And there are days, of course, that you feel like you don’t wanna do this anymore, and that would be nice. When I have sat on boards where we have sold the organization and I’ve done this many times. We’re always the ones that reach out first, and we have a short list of brokers that we would work with.

And we base it on, you know, certainly the relationships that I’ve made over the years, because I’ve done this several times, and the relationships that the co-founder or founder has, and then the relationships that the other board members have, we do it based on that, and then we let the brokers come back to us with proposals.

So just like a client would come to you and say, this is what we’re looking for, and you would write a proposal and come back to them. It’s the same kind of, I would say, business development way. So responding to somebody who’s emailing you is probably almost never going to work because to your point earlier, it’s usually the, if it’s, if they’re legit, it’s usually these business brokers who are gonna charge you 15, 20, a hundred grand to go find someone to buy, to buy your agency.

They don’t usually have somebody in mind, and they don’t usually have somebody who has said to them, look at these agencies. We’re considering buying. Usually it’s just we’re trying to generate leads.

Chip Griffin: Right. And, and as you said before, there are some, you know, really, really well regarded M&A firms that deal specifically with this space.

Yeah. Yep. I don’t know any of them that do cold outreach to drum up business. You know, certainly they, they will work their relationships to build their own networks. If they are representing someone who is looking to do some acquisitions, they will reach out. But generally. At least in my experience, they don’t do so completely cold.

They look for an introduction or the email itself will be very clear that they’ve done their homework in advance, right? And so if, if it’s something outside of that, that’s where you need to be really careful. And, and one of the first questions to ask when you’re talking, if you do decide to proceed, Hey, let’s just see what happens.

Let’s, I mean there, there is some value in just having some of these conversations periodically just to see who’s on the other end, to see whether Chip and Gini are telling you the truth. To see what it’s like to be talking about the idea, because it’s low risk, right? So, sure, yeah. There’s some value in periodically having these conversations as long as they don’t consume you.

But one of the first questions to ask in those cases is, you know, what is your fee structure like? Because if it is all about upfront payment, then chances are you’re just being sold to. If it is, it’s a percentage of the deal. Then there may be something more to that. It’s, I mean, it’s still, you know, sometimes they just wanna have a large roster of people that, that they can claim to be repping and that helps them sell to other people.

But nevertheless, if, if you’re being asked for cash upfront, that’s when you wanna be the most cautious, obviously.

Gini Dietrich: Absolutely. Yeah. Yeah, yeah, yeah. I mean, I would never. Just like you do with a, when, when you’re selling or buying a home, you would never give the real estate agent money up front because you want them invested in getting you the very best price for your home, right?

So it’s the same kind of thing, like you would never invest that money up front because they’re then, they’re not invested in getting you the very best valuation and sell price. So please be cautious if they’re asking you for an upfront, upfront retainer.

Chip Griffin: Yeah, I mean, and, and I would say that specifically applies to cold outreach.

If you are dealing with an established M&A person in that space, a fixed fee can actually be a good option to consider, at least because there are pros and cons to working on a commission basis. Yeah, sure. When you’re, when you’re being repped in a sale. But, but if it’s someone’s just reaching out to you and, and they jump in with, that’s their first option, that is a, a red flag, certainly that you wanna be careful of.

But let, so let’s assume that, that maybe it’s not a broker who’s reached out, maybe it’s another agency or it’s, it’s one of these what seem to be now proliferating smaller agency holding company type things. So, so there is some legitimacy to it, but, but they’re reaching out. How do you handle those?

Because that’s, that’s a little bit different than the broker who’s clearly trying to sell you. These people may have an interest. But I think it can be sometimes hard to gauge are they just hitting everybody that they can find, to find the few that maybe meet their criteria? Or do they have genuine interest? Because how you handle it on your end is gonna be different in each case.

Gini Dietrich: Yeah, I don’t know about that, simply because I haven’t been down that road, but, you know, my probably what I would, what I would personally do is see who that agency, who the agency founders or leaders have… Where we have mutual connections because I’m fairly well connected in this industry. So I would want to see if I have friends who also know them.

If I don’t, it’s probably not something I’m gonna follow up with. If I do have mutual connections, then I would say like, Hey, I see you’re connected to this agency or to this leader at this agency. What can you tell me? And either they’ll, they would be like, meh, not really a thing. Or actually, yeah, this is.

This is real, and they wanted specifically to reach out to you so you can get a lot of information with your similar connections. And that’s probably how I would approach it, but I’ve never actually gone through that path, so I would have to think about it a little bit more.

Chip Griffin: Yeah, I, I, I mean, I, I have advised a number of agencies who have gone down this path, so, you know, what I can tell you is that, you know, I, I think it’s my mindset is it, it’s almost always worth a phone call to see.

You know, just to listen. And I think that’s the key. The, you know, if you look at it, they appear to be legit. They know the space, they know you a little bit, at least. Have the call. Limit it to like 30 minutes and focus on listening. Don’t, if, if they come in with an interrogation and they just wanna know what are your numbers and all that kind of stuff.

Gini Dietrich: No, no.

Chip Griffin: Pump. Pump the brakes.

Gini Dietrich: Yeah.

Chip Griffin: I mean, I think we all guard on our numbers too much. Like there’s some, you know, sacred formula, they’re not, but it, it tells me something if they just want to pepper me with questions. Because maybe they’re just doing market research or something like that. Mm-hmm. And, and what I want to do is figure out, you know…

why did you reach out? What is your vision, what, you know, how does this work? You know, if you’re, if you’re trying to roll up agencies or you invest in a bunch of agencies, tell me more about that process so that you can learn and, and basically put them in the position of selling you on continuing the conversation.

Gini Dietrich: Yeah, absolutely.

Chip Griffin: Rather than you selling them on being interested in you. And I know that can be hard, particularly if you’ve ever been interested in selling your business. You kind of wanna make it all sound as good as possible and that sort of thing. But I, I would try to get that information out of them first, and then I would do, as you say.

Start working your network to try to figure out who knows them, you know, who have they acquired before, those kinds of things. Because that will tell you a lot and, and certainly you can learn a lot from talking with anyone who’s already part of that network or been through those conversations who can say, oh yeah, this was a good thing, or no, this didn’t quite work out the way I had hoped.

Gini Dietrich: Yeah, I mean, work your connections just like you do anything else. This isn’t any different than, you know, how you would do your own business development, how you would do your own hiring. You know, we always ask for references, but then we look to see if we know anybody else who’s connected with the people that we’re hiring.

Like, that’s how we do our hiring. So don’t treat it any differently just because you’re excited about the idea of selling your agency.

Chip Griffin: Right. And I, I think that’s, that’s advice that, that works throughout the process. Even, even if it appears to be a serious inquiry. You want to continue with it.

Always be cautious about how enthusiastic you become about the idea of selling because it will cause you to do things and make decisions that aren’t smart. And, and so you need to be thinking about how you’re communicating. First of all, make sure that you’re never fluffing anything up in those early conversations because the truth will always come out.

Gini Dietrich: They will find out.

Chip Griffin: So, so if you’re, yes, if they say, you know, we’re, you know, we’re looking for $2 million plus a year agencies, and you are not a $2 million plus a year agency, please don’t pretend that you are.

Gini Dietrich: Yeah. Just tell them you’re not. Right. Just tell, tell them you’re not because they’ll find out.

Chip Griffin: They’ll find out and don’t, don’t say, well, you know, I’m at one five, so rounding up. No, that’s two. No, no. I mean, just in that case, just be honest, we’re not quite there. We’re at one five. Right? Yeah. And, and if that’s still good enough for them, you know, maybe two million was sort of an arbitrary number.

Maybe they want to continue, but if not, they’re going to find out eventually. And so anytime you’re in these kinds of conversations with potential acquirers, it’s better to get the stuff out there. And if you’ve got some, you know, not necessarily dirty laundry, but you know, some warts that you, that you’ve been, you know covering up, just share it. Like if, if 80% of your revenue is from one client, be upfront about that so they don’t find that out and waste a lot of your time and theirs because that’s gonna sour the relationship. And maybe somewhere down the road, something could have worked out, but they’ll remember, oh no Chip’s the guy who, you know, led me on and then we couldn’t do a deal because you know, he had 80% of his revenue tied up in one client.

Gini Dietrich: Absolutely. I’ll say that like I said, I’ve done this several times with other organizations having served on their boards. And the one big mistake that I have seen organizations make, and you’re gonna laugh at this, but it’s it’s true, is wanting to close something by the end of the year, which on paper, in theory, sounds great.

You’re done at the end of the year. You go into the holidays and you’re done. What really happens is that you work all the way through the holidays. To get it done by the end of the year. And it’s a miserable experience for you and everybody involved. And I have seen it happen where people are like, okay, but we’ll be done by the end of the year, and it’s just this year and we’ll be, like it won’t happen again. And what happens instead is your family’s upset, your spouse is upset, your partners are upset, your kids are upset. And so you start to make decisions based on emotion instead of ration, you know, logical, rational decisions. And, so I always caution like if you wanna have something closed by the end of the year, you really should have it closed by Thanksgiving in November.

And if you can’t do that, then be okay with pushing it into the the new year, because I promise you, you’re gonna make decisions that you will regret later because you’re trying to get it wrapped up and still enjoy your holidays.

Chip Griffin: Well, and not only that, but, but a lot of times I’ve seen it where it doesn’t even succeed and it ends up closing on like January 3rd, in which case you put all that effort in for nothing.

Because you’ve still, you know, ticked over into the next calendar year. Yep. So all of the paperwork that you thought you were gonna be able to not have to deal with, you still have to deal with.

Gini Dietrich: Still have to do.

Chip Griffin: Yep. And can I just tell you that in the whole scheme of things, if you’re selling your business, the added paperwork of, of closing on February 1 versus December 31, who cares?

Correct. Is it gonna cost you a little more, you have to sign some more documents? You bet. Sure it is. There are remarkably few instances for privately held businesses where that matters at all.

Gini Dietrich: Yep.

Chip Griffin: And so totally agree. You need to close, you need to, to try to move things along, but they need to close on the timetable that is right for you and right for the acquirer.

Anything artificial that comes into the mix is likely to lead to bad decisions and therefore bad outcomes.

Gini Dietrich: That’s right. Yep. And I’ve seen that, I’ve seen that multiple times. So I only leave that as if you’re selling your agency and that is something you should be thinking about. That is one of the biggest mistakes I see companies make.

Chip Griffin: You, you are absolutely a hundred percent correct and, and I would say, I mean emotion at all stages of the process is not helpful. Right. I mean, it’s, and it’s difficult, right? It’s, it’s, it’s your baby, it’s your business, you’ve built it, you know, a lot of blood, sweat, tears, toil, all that kind of stuff.

Yes. And it’s, it is really tough to take yourself out of it. And, and this goes in a lot of different directions because sellers will often be pretty blunt about the flaws that they see in the business, in part because it helps to drive the price down, but in part because they’re helping, they want to try to educate you about why maybe the offer isn’t as you know, robust as you thought it might be. And I will tell you, most agency owners have a sense of evaluation for their business that is wildly out of whack with what the market is actually willing to pay. And part of that is because they look at articles talking about other industries and what those businesses sell for.

Part of it is because, as we’ve talked about here many times before, agency P and Ls are in awful shape and do not fairly represent what the actual profit of the business is. So if you apply a multiple on the wrong profit number, you’re gonna get the wrong valuation. So there’s a lot of these things and, and if you take those negative things that come through in the process.

Too much to heart, that’s going to cause you to, to walk away from something that maybe is really a good deal when you look at it less emotionally. Yep. At the same time, that emotion, that excitement, can cause you to, to rush things along, make decisions that are bad. Frankly, I can tell you in my case, I’ve had instances where I was so enthusiastic about a deal, thought it was gonna close.

I made bad decisions about the business, and then the deal didn’t close. Oh. Look at that now. Now I’ve gotta try to undo some of those things that I, you know, some of those decisions that I made that were bad one, and sometimes they’re not. You can’t fix them, even if it’s only been a few months, sometimes you’re like, yeah, I can’t undo that decision and so I’m stuck with it and it can have lasting damage.

So you, you’ve really got to be thinking about all of those things and trying to think as analytically as possible, which is why it is helpful if you have an advisor who can help you through this process.

Gini Dietrich: Yes, someone who can help you.

Chip Griffin: Certainly you can go alone in selling, whether it’s a lawyer, an accountant, or an M and A advisor or something like that who can help guide you through can be extraordinarily helpful in walking you back from the highs and lows that lead to bad decisions.

Gini Dietrich: Yeah. And the last thing I’ll leave you with is this, obey your gut because if something feels off, it probably is. A couple of years ago I got really, really close, like almost down to the wire of selling my business. And it was a lot of money. It was really hard to walk away from. But something felt off about the leadership and come to find out my gut was right.

And every, almost every week I look at something they’ve done and think man, I dodged a bullet. So obey your gut because it will never steer you wrong.

Chip Griffin: That is, I think, the best point to end this on. So that is what we will do. That will bring this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich,

Chip Griffin: and it depends.