Welcome to another thought-provoking episode of Build a Better Agency! This week, host Drew McLellan is joined by returning guest Michael Farmer, a renowned consultant and author with decades of experience advising both global agency holding companies and independent shops. Together, they pull back the curtain on one of the agency world's most persistent and problematic issues: the disconnect between the value agencies provide, the scope of work they deliver, and the fees they collect.

Michael shares candid insights from his 30-plus years helping agencies navigate profitability challenges, particularly around scoping, resourcing, and pricing work appropriately. He recounts eye-opening stories from inside major agencies, including how a lack of clarity around deliverables and the overuse of creative resources can quietly erode margins—and ultimately, agency health. Michael breaks down his approach to rigorous scope management, explaining why developing a detailed, data-driven understanding of agency output is essential for both profitability and sustainability.

Drew and Michael explore why so many agencies—especially large holding companies—fall into the trap of doing too much for too little, and why today's independent agencies are uniquely positioned to break that cycle. Their conversation highlights how smaller agencies can differentiate themselves by adopting a consulting mindset, engaging more meaningfully with clients about business outcomes rather than just deliverables, and leveraging freelance talent for maximum flexibility.

If you're ready to move beyond being a "deliverable shop" and reposition your agency as a true strategic partner, this episode is a must-listen. You'll walk away with actionable advice on scoping, pricing, business model evolution, and why now is the perfect moment for independent agencies to lead the industry forward by focusing on the work that truly moves the needle for clients.

A big thank you to our podcast's presenting sponsor, White Label IQ. They're an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

What You Will Learn in This Episode:

• • Why agencies must shift from delivering quantity to delivering strategic value
  • The dangers of undervaluing agency work and over-delivering for too little revenue
  • The critical importance of scoping, pricing, and tracking deliverables accurately
  • How smaller, independent agencies are positioned to outpace big holding companies
  • The need for deeper alignment with client business goals, not just creative output
  • Leveraging freelance and specialized talent to extend agency capabilities
  • Preparing for the future: consulting mindset, strategic focus, and harnessing AI responsibly