In this episode, Chip and Gini discuss the growing concerns surrounding AI in the agency world. They highlight the irrational fears and cyclical nature of technological disruptions, drawing comparisons to social media and content marketing trends of the past.

The hosts argue against the notion that agencies should discount services due to AI efficiencies, emphasizing that AI should be seen as a tool to enhance productivity and strategic value rather than a cost-cutting measure. They stress that agencies should focus on delivering more value and maintaining regular client communication instead of simply protecting existing revenue.

The discussion also touches on the importance of transparency in AI use without oversharing minute details. Finally, they underscore the benefit of quarterly planning to align agency efforts with client business goals, thus fostering stronger client relationships and ensuring mutual success.

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, I think that AI is making people crazy. They’re losing their minds and acting irrationally.

Gini Dietrich: Yes, yes. I completely agree. Some of the stuff I see online, I’m like, you guys,

Chip Griffin: take a deep breath.

Gini Dietrich: Breath, everyone. Take a deep breath. Stop clutching your pearls. It’s okay.

Chip Griffin: Well, maybe the AI really has become sentinent and – sentient – and the, the robot overlords are doing this intentionally to make us go crazy and eat each other alive.

Gini Dietrich: Maybe, maybe. Although this happened with social media, it happened with content marketing.

It happened with blogging. Here we are with AI. Everybody’s freaking out. Like, this is cyclical. Everyone’s gonna calm down. It will be okay.

Chip Griffin: I don’t know if they’ll calm down, but eventually they’ll, they’ll come to the realization that perhaps it isn’t what they thought it, it was, and that it is, it is important.

It is useful. It is valuable. It is not something that upends absolutely everything we do every moment of the day and we need to orbit around it. I mean, it just, it really does remind me of those early days of social media where, you know, you’d see these, these articles and posts about, oh my God, CEOs, they need to be blogging and they need to be blogging every day.

And I don’t care how big your company is, the CEO needs to write those blog posts themselves. Ghost writing is an evil thing and we shall not do it. And if we do have it ghost written, we must disclose on that blog post or article that this was ghost written and not actually written by the CEO. Because we all believe that CEOs write their own darn stuff.

Gini Dietrich: Yes. Yes. That’s why I say it’s all cyclical. Everyone calmed down. It’s going to be okay. That said, I happened upon the LinkedIn post by a second connection, who’s a chief marketing officer, and it essentially said, I’m trying to figure out how to manage my agencies who are using AI and how to ask what kind of discount and how to ask for a discount, because I know they’re using AI. and I was just like, there is no discount because you’re, they’re using AI.

They’re able to focus on other things because of that, and they’re able to be more strategic in some areas because of it, but they, they should not be giving you a discount, just like the surgeon doesn’t give you a discount. Because the imaging is faster. You shouldn’t like the same. You’re not. Just because you’re faster at some mundane, laborious task does not mean that you should reduce your fees ever.

Drives me freaking nuts.

Chip Griffin: Yep. And I would absolutely agree with that, with the asterisk that if, for example, you are being hired to do writing and the AI does all the writing and you don’t edit and you don’t do anything else, and so you know you’re spending 10 minutes on it instead of 10 hours. You absolutely should be either figuring out how you can do more for the client, correct.

Or you should be reducing your rates. Yes. Because it is, you know, I love all the talk about, you know, value-based pricing, which we talk about all the time, and certainly there are a lot of people who say, well, it doesn’t matter if I use AI to do it. They’re getting the same value out of it. Well, they are and they aren’t because they could do the work themselves if they wanted to in less time with less cost.

And so. You’re not really creating that value anymore if the AI is doing it totally on its own and it doesn’t have anything to do with the prompts that you’re writing or, or the management of the whole process. And all of those things do take time, by the way. Mm-hmm. So we shouldn’t, we shouldn’t forget about that.

Right. Particularly when we’re thinking about our own agencies and how we can be more efficient, the time it takes to manage the AI matters. We’ve talked about this recently. You cannot allow those things to, to be forgotten about. And so all of that does go into it. But the, I mean the comments on this post were just other worldly and there was another AI post recently as well that I saw and, and I mean, so we’ve got people out there who are like…

CMOs want agencies to reduce their fees because they’re using AI. We’ve got a whole discussion around, well, we need to be transparent and tell every possible use of AI that we have and be really clear about it with our clients. This is how we’re using it exactly. And this is, and, and people say you can’t do hourly billing anymore because of AI, and so you must go to value-based pricing.

And I mean, just all of this stuff. Take a breath, folks. Take

Gini Dietrich: Yes. It’s a breath. Okay.

Chip Griffin: Again, it is a tool, it is a valuable tool, but it is a tool.

Gini Dietrich: That’s right.

Chip Griffin: And it doesn’t mean that you just throw everything out and start over on either side of the agency client relationship.

Gini Dietrich: Yes. Yeah, that’s absolutely right.

I, I say this all the time, you know, like in other podcasts that I’m being interviewed on or webinars, whatever, the strategy stays the same. The best practices stay the same. The tools have changed and the tools continue to change. The tools have changed dramatically in the last 15 years. Use the tools to make you more effective and more productive.

But like I said, the surgeon is still going to charge you what they charge you for brain surgery. Regardless of how fast the imaging is, regardless of how fast you get your MRI results back, like the, it doesn’t matter. Your expertise is over here in the surgeon bucket, not in the imaging bucket. So remember that. Like the, the stuff that you can do just because you’re faster at creating drafts or you’re faster at predicting outcomes or you’re faster at results reporting does not mean that the real value in what you provide in strategy, the creativity, the innovation, the ideas, all of that is what they’re paying for. They’re not paying for the output over here.

Chip Griffin: And we need to take ourselves out of the mindset that, that the AI is coming in and so we need to protect what we have. Instead, we should be thinking about how can we elevate, how can we produce more and better results for our clients? How can we be more effective, not just how do we protect our piece of the pie? Keep doing things the way we always have. If you wanna keep doing things the way you always have, yes, you will suffer in this new environment.

Absolutely. You absolutely have to grow and adapt and figure out how this helps you. But that’s no different than, as we’ve said before, you know back 30 years ago when we shifted from faxes to emails. Right, right. That made you more efficient in being able to communicate with other people. Yes. You didn’t have to be on the phone.

You didn’t have to send a fax. Yes. Or a telegram or any of these kinds of things. And yes, I’m old enough to have received telegrams, so in fact, when I worked on Capitol Hill, we would get a delivery of telegrams on a regular basis.

Gini Dietrich: For real?

Chip Griffin: For real. For real. It was still a way. In the early 1990s, that was still a way that people communicated with Congress.

They would send telegrams to express their opinions.

Gini Dietrich: All right.

Chip Griffin: You know, I don’t know why, but

Gini Dietrich: I hate you. Stop. Please vote differently. Stop.

Chip Griffin: I mean, the thing is, today if you, if you mention a telegram, people are like, what is that? They don’t.

Gini Dietrich: Right. Right.

Chip Griffin: They don’t, they, they, they’ve never even heard of it, you know?

Yeah. Fax machine, they can at least maybe kind of halfway visualize. Yeah. I was watching a conversation on TV and there were some young people and, and someone mentioned a modem and, and that was completely beyond anybody. They didn’t have the concept of having to actually dial up to access the internet.

Gini Dietrich: Right, right.

Chip Griffin: Things like that. But, but I’ll ask before we continue to date ourselves by talking about all of this old technology, we need to think about how to use this new technology in order to improve what we are doing. And it is not simply about, you know, running around and, and telling people what brand of shampoo you use, because that’s how you wanna be transparent to your clients.

They may ask you how you’re using AI and you might wanna have a general conversation about it.

Gini Dietrich: Absolutely, yes.

Chip Griffin: But for God’s sake, you do not need to be sending them an email and saying, by the way, I used AI to proofread this, or I used AI to create the first draft of this. Those are not things, unless there is some specific requirement in your contract, and please do not agree to those.

But if there is a specific requirement in the contract or if there’s some special circumstance with the kind of work that’s being done. There’s always the exceptions to the rule, but 99% of you should not feel compelled to do it, and in general shouldn’t do so in detail if asked, because that’s just like telling them what kind of shampoo you use.

It just doesn’t matter.

Gini Dietrich: Yeah. You know, Sharon Toerek at Legal + Creative has a really good AI toolkit. I can’t remember how much it costs, but for it’s, it’s affordable for agency owners to download it and then understand like, what, and you can pick and choose like. What paragraphs or information you should include in your master standard agreement, what you might wanna include in your statements of work, but it’s, again, it’s not like we use it forever to draft this blog post.

It’s really general, like we use AI. We, we use green and yellow information from our clients. We never use critical, confidential, red information ever. You know, it’s general kinds of things that you can insert into those, that documentation to help be transparent that you are using AI, and I think today people are, that’s not a surprise, like everybody’s using it.

Right? But not having to, to be really specific about what kind of shampoo you’re using.

Chip Griffin: Right. And, and you have to be really careful about this because you have to think about how does this stand up over time? Because you don’t wanna be going and, and having to revise your master services agreement, right?

So, so, you know, my general advice as a non-lawyer is that you should put as little as possible to tick the boxes in there. So that you have the flexibility to adjust and adapt and do things differently over time. Because the reality is AI is baked into almost all of the software that we use now.

Gini Dietrich: Yep.

Yep.

Chip Griffin: In one form or another. Yep. Sometimes it’s pretty much just lip service, but a lot of times it’s more substantive. And so, you know, are we now in the business that we’re gonna have to try to disclose every little, you know, we, we use Lightroom to go edit a photo that we’re putting on the website and, and we use it to remove a piece of garbage in the background.

Well, that’s technically AI that did that. Do we feel like we need to now go and, and report to the client that we used AI to remove a trash can that was in the background of the environmental portrait that we took, that we’re gonna put on their website? I don’t think so.

Gini Dietrich: Right? I don’t think they care.

And neither should we. No. And like MuckRack or you know, one of the other media databases, if you use it, there’s AI baked into that. Do you have to say, well, I use a media database and the AI helps me do like that, that’s ridiculous. Should you be transparent about saying you use AI? Of course, but I think to your point, you don’t have to get into the nitty gritty.

Chip Griffin: Yeah. I mean, and, and I think that that saying you use AI is fine, but, you know, getting into the nitty gritty is sort of like explaining to a client, whether you’re using a landline or a mobile phone to reach out to reporters. It doesn’t matter. It doesn’t matter. They’re technically different technologies.

They, they, the signals get there in very different ways. I could imagine there’s probably some weird client out there who’d rather you didn’t use a cell phone ’cause they don’t want to go on up into the atmosphere and they just want it on the, the hard line, the wires, whatever. It doesn’t matter. So you don’t need to get to that level of detail again.

No. You not in, in, in special circumstances, which most of them don’t apply to most of you.

Gini Dietrich: Right, right, right, right. Yeah. So I would visit Legal + Creative website and, and look at that AI toolkit. Of course, have a conversation with Sharon if you need something more. Because she’s, she, they work exclusively with, with agencies and are great on that, since you and I are not attorneys.

 But I do wanna go back to the values based, hourly based, retainer kind of idea that, okay, so if, let’s say for shits and giggles. We, we have a client that’s $5,000 a month, and in the past we would use all of that budget on, you know, executing their webinar, taking the transcript, and creating social assets and blog assets.

You know, putting some money behind page to amplify it to get more registrations there. Well, now AI can do most of that, right? Does that mean that we should reduce our retainer or does it mean that there’s probably other things that we could focus on to help that organization’s growth and use the extra retainer for that?

Those kinds of things. I think that’s the conversation that you should be having internally and with your clients is, yeah, it’s made us more productive. You know, this list of stuff over here that we haven’t been able to get to because we haven’t had time. Let’s start. Check, check. Checking these off the list.

Chip Griffin: I mean, the vast majority of agencies don’t have any shortage of ideas for things that they could Right. Implement with their clients. And, and most clients don’t have any shortage of things that they would like to see their agency do. Right. So, so rather than simply trying to protect what you have and, and doing the bare minimum to fulfill the existing checklist, find ways that you can continue to enhance and improve.

And, and I think you mentioned webinars and, and webinars and podcasts are a great example because 10 or 15 years ago, you had to, it took a lot of work and you kind of did the bare minimum to get those things edited, produced, distributed. Nowadays because of AI and, and AI even before, you know, the current AI fad, things like automated transcription that came in mm-hmm.

Within the last decade, which now gets classified as AI, didn’t get classified as AI when it was first done. But you know, that’s an argument for another day about how we define things. If you’re able to now produce transcripts, now it’s pretty standard for webinars and podcasts to have a transcript available.

Gini Dietrich: Right.

Chip Griffin: 15 years ago, you had to pay someone to do it. And so That’s right. It was not the kind of thing that was done routinely and, and now we can produce those kinds of things. We can edit things a lot more easily. The platform that we use for this podcast. It uses AI to do automatic camera switching.

For those of you who watch the video, it cleans up the audio so that, you know, we can’t hear all the background noises in our various offices. And, and those are all great things and improve the quality of the product that we’re putting out for you, but also that you can put out for your clients.

Focus on those things. Elevate the game. It’s not just about kind of doing the bare minimum. If you do that, absolutely, you’re gonna run into problems,

Gini Dietrich: of course,

Chip Griffin: but find those other opportunities and say to your clients, you know, here’s something else we can do for you. Here’s a way we can get better results from what we’re already doing.

Whether that’s by adding a transcript to it or being faster to get something published, or having the time to go pursue a third webinar or some other brand new idea that you weren’t able to do. That’s how you continue to demonstrate value to your clients, and that’s how you continue to not just protect revenue, but actually grow it.

Gini Dietrich: Yeah. And you know, and I’m sure listeners know too, that I’m a big fan of quarterly planning. So instead of doing a big annual plan, you meet with your clients every quarter. You talk about what worked, what didn’t, and what, what things you should focus on for the next quarter. Not only does it help you stay aligned with the business goals more effectively, but it also, in most cases, get, gets you more revenue or more retainer because they’re like, oh, we gotta focus on this.

And yeah, they were great results from that. And you’re not having those conversations once a year. You’re having them four times a year. Right. So a big, big fan from that perspective. But I think what that allows you to do from an AI perspective is say, Hey, listen, we’re able to save 25% of our time, and I know this, this, and this, have been on the priority list that have, that keep moving down because of, you know, all these other things. Of these three, what can we bring up to the forefront for the next quarter?

And you start to have those conversations where you’re part of the business planning and the business continuity. And the business workflow so that you know, you don’t have the… it happens more effectively and you don’t have to have the, gosh, we’re out of scope, or we overbuilt, we over serviced last year.

It’s a, a continuous conversation that happens all between all of you and there’s no conflicts in it, and it’s really strategic and, and clients begin to see you more as, you know, someone they can count on without asking you to reduce your fees because you’re using AI.

Chip Griffin: And that ongoing conversation is, is so important.

It’s so critical. And one of the things that really bothered me about one of these LinkedIn threads was, was really a very much an an us versus them kind of thing. Yeah. Whether you are on the client side or the agency side, the agencies are looking to protect revenue. The clients are looking to cut costs.

Have actual mutual conversations with each other and figure out how you can work together. And I’m not gonna use the word partners because I don’t like that word.

Gini Dietrich: I know, I, I avoided it too, because I know you don’t.

Chip Griffin: As I have said repeatedly on this show, you are not partners with your clients. You do not share in the risks and rewards. You have similar things.

You can be aligned, you can work together. In any case, figure out those ways to work together. If either side of this relationship is viewing it as us versus them. I need to maximize my revenue. I need to maximize my profit, or I need to keep my costs as low as possible. I need to get as much from the agency as possible.

That’s not a healthy relationship. No. And that is not gonna lead to the same kind of success where one, where you have regular ongoing conversations and quarterly planning or semi-annual planning, or even annual planning, which a lot of agencies don’t do with their clients ’cause they just charge forward

Gini Dietrich: fair

Chip Griffin: on autopilot.

Yep. And hope that they don’t get noticed and that the revenue keeps coming in the door. So true. I mean, that’s, that’s reality. Yes. I mean, a, a lot of agencies just sort of take that head down attitude because, you know, as, as soon as you poke your head up above the fence line. You know. Yes, there’s the possibility that you can increase the size of your relationship or build or, or strengthen the, the quality of the relationship with your client.

But there are also risks involved with that because you’re drawing attention to yourself, and particularly in larger organizations, it can be kind of easy to skate. So sure, I do understand there’s a risk to it, but if you’re having those conversations, you’re more likely to build that strong relationship with more of your clients, which will lead to better results.

Even if occasionally putting your head up above the fence line causes a problem.

Gini Dietrich: Yeah. And you know when you, when your client is going into meetings with the CFO and they’re saying, we’ve gotta cut X amount of dollars. This agency is a big piece of that. The client stands up for you and stands up for that because they can’t do their job without you.

And they know that because of the ongoing relationship and, and that you’ve been building and the ongoing planning that you’ve been doing with them. If you’re just keeping your head down and hoping they don’t notice you year, year after year, it’s gonna be a lot harder for them to stick up for you.

Chip Griffin: Absolutely. I mean, and, and I think this is sort of a, a common theme for how I view AI and everything that I do, which is that you’ve gotta have that intersection of the technology from the AI, but the, the human, yes. Not just expertise, but the, the ability to, to engage with other humans. Yes. If you put the best of both of those together, that’s where you will achieve the best results for both sides of the agency client relationship.

And ultimately that should be what we’re looking for, right? Right. That if, if you are truly in it to be long-term successful, you want it to work for both sides. And it shouldn’t be one of these things where we’re having constant fights about transparency or pricing or these kinds of things because you know, we’re just looking out for our own self-interests.

If you align yourselves well, you will get good things coming to you

Gini Dietrich: every time, every single time. So do that

Chip Griffin: 99% of the time. Let’s, let’s, let’s admit that, alright, fine. There are times most of the time where you do everything right, everything you know, you, and it just doesn’t work out.

Gini Dietrich: Fair.

Chip Griffin: That’s life.

Gini Dietrich: That’s fair. That is life. Yeah. So I agree

Chip Griffin: that’s life. And that’s this podcast

Gini Dietrich: 99% of the time. And that’s this podcast.

Chip Griffin: So we’ve completed 99% of this podcast with the final 1%. We will sign off. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.