A lot of agencies have told Chip and Gini that 2023 was a bad year for them. Fellow agency adviser Karl Sakas posted on LinkedIn that he has been asked if it was bad for everyone.
In this episode, Chip and Gini share their perspectives — along with things that positioned some agencies for success in what many experienced as a down year.
Whether you had a good or bad year, there are lessons to take away to make 2024 and future years more successful.
- Gini Dietrich: “The lesson here is that things are cyclical. And you have to be ready for the ups and the downs.”
- Chip Griffin: “Fundamentally it comes down to this: you always need to keep your eye on ensuring that you are consistently bringing in profitable work.”
- Gini Dietrich: “In some cases, you’ve created the problem, so there’s no reason for you not to fix it.”
- Chip Griffin: “Take control. You are the boss.”
- Webinar: What to do when you feel burned out as an agency owner
- Is business slowing down for agencies in 2023?
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, so glad 2023 is behind us. It was the worst year ever in the whole history. Worst.
Gini Dietrich: Worst. Okay. Worst. Worst. All right. Let’s talk about it.
Chip Griffin: All right. Right after this.
Well, I mean, there, there was 2020, I suppose.
Gini Dietrich: And there was 2009.
Chip Griffin: Yeah, yeah. So maybe that’s not actually true.
Gini Dietrich: Probably not. You might be exaggerating a little bit.
Chip Griffin: I might be. I might be just trying to set up our topic for the day. I mean, it’s entirely possible. You might I might, I might have done that once or twice on this show in order to get started.
Gini Dietrich: Yep. So. Hyperbole is where it’s at.
Chip Griffin: But, but the reality is we’re going to talk about a post, by our friend Karl Sakas, who back, I don’t know, a couple of weeks ago posted on LinkedIn, that an agency CEO had asked him if 2023 was abnormally bad for agencies. And, the follow up was, do you think there is an issue in the market?
Or is this just a phase of natural selection weeding out the ones who only ride the growth wave? So he goes on and we’ll link the, the, the full post in, the comments. His basic answer was. Yeah, he did think that the 2023 was bad for agencies. He acknowledges 2020, but says that was bad for everyone, not just agencies.
Mm hmm. Mm hmm. So my first question is can we agree that 2023 was bad for agencies generally?
Gini Dietrich: Oh, that’s the question?
Chip Griffin: That was a question. Yes, that was a question. That’s the question.
Gini Dietrich: That’s the question.
Chip Griffin: And for those of you watching on video, we once again have our doggy co host here, so.
Gini Dietrich: She likes to hang out with us.
Chip Griffin: So, so if you hear a little licking the microphone right now, licking noise on the microphone, that is not me.
If you’re listening in audioland. And it is not Gini.
Gini Dietrich: Or is it?
Chip Griffin: It is the dog. It is definitely not.
Gini Dietrich: you know, it’s funny. You ask that question now that I realize it’s a question. because a lot, I would say a majority of our Spin Sucks community complained last year about how bad it was and how hard it was to not just find new, fill the pipeline, but to close the prospects that said they were interested, like it was taking longer. Some were being, some were being ghosted and that kind of stuff. On the flip side, it was our best year in history. So I’m trying to figure out what the… like, it’s certainly, it’s not a focus, a huge focus group, right?
It’s a focus group of a few hundred, not of thousands. But, I don’t know what the disconnect is or why it was great for some and not for others. But it literally, last year literally was our best year in history. So, but there has been a lot of conversation in the Spin Sucks community about how terrible it was.
And. Lots, especially internationally, you know, there are some people from Ukraine, there are some people from Israel in the community and they certainly have reasons for it being a terrible year. But in the US, you know, they’re the economy and everybody kept talking about there was going to be a recession and then there wasn’t and like there was all this stuff, right?
And certainly 2024 is not going to be better from a global or political perspective. so I think we have to figure out what the middle ground is and how to reach that so that we can continue to grow our agencies.
Chip Griffin: Yeah. And look, I mean, I, I think that it is absolutely true that a not insignificant, not insignificant number of agencies did have a very tough 2023.
What I will say though, is I I’m not certain that I would be comfortable saying that it was across the board bad for agencies. You know, when I look at, at my own client base at SAGA, I would say that to the best of my feeble minded recollection here. All of the clients that I had throughout the course of the year, in other words, they were clients throughout the whole year for coaching and that kind of stuff, all of them had either okay or great years, and I don’t think any of them had particularly bad ones.
I certainly did work with some agencies on some specific challenges who did have bad years, right? So I certainly worked with agencies and saw inside that there were real issues with them. But I think it’s, it’s like oftentimes happened in the happens in the agency world. It is very dependent upon what sectors they’re focused on.
Sure. So, so agencies that, that have focused on tech, for example, they have been hit pretty hard because the tech sector has laid off a lot of people and cut a lot of budgets. And when that’s happening, it’s natural that that’s going to ripple down to the agencies that, that serve that sector as well. So I guess I’m not really and I think probably one of the reasons why Karl is observing this is a lot of his agencies are more, as I understand it, more digital and tech focused and things like that. Although even then, I know some digital agencies, I work with some digital agencies that are doing quite well and, and had record years last year. So, I don’t think that, that I would generalize it quite that much.
Gini Dietrich: No, I wouldn’t either. And as you’re talking, I was thinking through the clients, the coaching clients that I work with, and I have found the same as well. And the ones that have, that I have not worked with…that I only like did some coaching or advising like one off kinds of things. The issues were internally focused and not externally focused.
So it was things like, you know, the CEO, the, the leader of the agency spending too much time in the day to day or not having the pricing correct or not understanding the financials clearly, or not having a pipeline. Like those were the big issues that I saw throughout the year versus. Clients not coming.
Like one woman I talked to, she had probably a full year’s worth of pipeline, but just wasn’t getting proposals out. She just wasn’t doing them. And so that that’s an internal issue, right? That’s not an external issue. So it was stuff like that, that I saw not necessarily because. We were nervous about a recession or things were happening worldwide that were shutting things down.
Chip Griffin: Well, that’s it. And the vast majority of the agencies that I worked with who did have struggles in 2023, there were specific reasons for it. And it wasn’t just like in 2020, well, everybody just kind of shut off the spigot and you know, what are you going to do? Right. There were actual problems with how the owner was spending their time, how things were priced, how much they invested because 2022 was a great year.
And so they over indexed the fact that it was going to be another great year. And so they put themselves in a bad place cost structure wise. So, so I think in every single case that I’ve looked at, there were specific reasons for it as opposed to just a general. You know, stuff is happening with the, with the, again, the exception of those who are more focused on the tech sector.
And I did see more widespread damage in anyone providing particularly PR services to the tech sector.
Gini Dietrich: Yeah, I, yeah, I would agree. Also, cannabis. I would say that industry is going into a pretty hard nosedive as well. So I would say that industry as well. I would agree that it has been one off types of things when you think about, and, and I don’t think here is going to be any better.
And now certainly the economists are saying, okay, maybe the recession is not going to hit after all things are looking up from that perspective. But we’re also going in, in the U S here, we’re going into a little season for the, for president of the United States. and so that’s all going to throw these out of whack and throw a wrench into things.
So, you know, I think the lesson here is that things are cyclical. And you have to be ready for the ups and the downs. And we’ve talked about, you know, all the things that need to go into that, keeping your pipeline full, making sure your pricing’s correct, not over servicing clients, all those things that we continue to talk about are the things that you should be focused on this year.
Chip Griffin: Yeah. I think really fundamentally it comes down to, you always need to keep your eye on ensuring that you are consistently bringing in profitable work. And that that ties together a lot of these things here. But part of the reason why a lot of agencies get into trouble is because they see a good year.
So they over invest and they say, well, I can, I can diminish my profits for a short term because we’re going to keep riding this wave. And if it does, if that wave doesn’t pan out, you get into trouble at the same time you start to see trouble. And so you start over servicing in order to keep them. Well, now you’ve screwed up your, your profitability yet again and just made things worse.
So you now have less runway when you finally realize, Oh no, this isn’t just going to turn itself around. And so I think it’s, it is so vitally important that at all stages, whether things are going well or not going well to focus on making sure that you’re able to deliver great results for your clients while still generating profits for your business.
And if you do those things, then you can weather most of these storms with the exception of truly global things like 2020. And then even then you’ll still be in a better position than agencies that haven’t done that. But certainly in, in waves like that, it can be more challenging to overcome that, even if you’ve managed your firm well leading up to it.
Gini Dietrich: Yeah, for sure. I mean, there, there are going to be ups and downs no matter what, like that’s just the name of the game. And, you know, it’s funny, I had a conversation with a close friend who’s on the corporate side, in corporate communications. And it was funny to hear how he thinks about business and how much it’s changed.
Like he’s so focused on, can I find stability in a paycheck? Where, you know, an agency owner is focused on how do I keep my pipeline strong and make sure my pricing is correct, understanding that I’m going to have a down year and some up years to, to balance it all out. And so I want you thinking less about corporate communications and, or a corporate job, you know, working inside a corporation and more about understanding that you are going to have down years, you’re going to have things out of our control, like the great recession and the global pandemic. You’re going to have things out of your, that you know are coming, but they’re still out of your control like a major election, you know. January has been a complete shit show for most of us because of the weather. I mean, our kids in Chicago have been to school five days since December 21st.
Like it’s just been crazy. And I know we’re not the only ones affected, right? The whole country has been affected with. snow and cold and freezing rain where everything’s been shut down. So those are the things that are going to affect your business and you have to be prepared for that kind of stuff.
Understanding that if you do all the things that you need to do to keep your pipeline strong, don’t panic, make sure that your pricing is correct, that you’re not over servicing, that you’re not panicking, that you will get the flip side on the other end.
Chip Griffin: Yeah. And what you’re talking about is focusing on the fundamentals and it’s the same thing that, you know, coaches and sports will tell you. You know, if you’re, if you’re struggling to hit in baseball or make your shots in basketball, they, you know, they’ll always tell you, focus on the fundamentals, make sure that you’re getting the basic stuff, right.
And things will turn around. You don’t need to go and do wildly different stuff. You know, you don’t need to, to go and decide that you’re going to completely change your stance or your style of playing basketball. If it’s worked for you before, odds are really good. It’s going to work for you again, but you need to focus on doing things well and doing them consistently.
And so as an owner, that means making sure you’re taking control of your own time. Something that, that many owners struggle with and, and the tougher times get, the worse owners are about controlling their own time. And so that only causes the spiral to continue. So step back, grab control of how you are spending your time.
It is the only resource you cannot get more of in your business. I know I say this a lot, but it’s true. Sit down, figure out what you’re spending your time on and then figure out what you should be spending your time on. Make the changes necessary to get you there because that will have a bigger impact on the success of your business than anything else.
Gini Dietrich: I needed to hear that. Thank you.
Chip Griffin: You’re welcome. I’ll send you a bill.
Gini Dietrich: I mean, you’re right. And, and I’m, I had a really crappy week last week and I was thinking maybe I need to get up even earlier and spend more time. I needed to hear that. Thank you.
Chip Griffin: Yeah. I mean, look, I, I, I talk to agency owners all the time.
You’ve got to track your time and sit down and say, okay, here’s, here’s where I’ve gotten to, and this is what I’m spending my time on. And, and you’re great about, you know, helping people to understand how you look at each individual task and you know, what bucket it goes into. And to me, if you sit there and you take a look and say, this is something only I can do, or this is something I can delegate.
And then with the delegate, I like using a traffic light system, red, yellow, green. Red, absolutely hate this. I can delegate it. Let me get it off my plate. Green. Love it, even though I could delegate it, you know, maybe I can keep it if I’ve got the time. Yellow, you kind of figure out, you know, is it convenient enough to delegate it?
Delegate it, if so, get it off your plate. Find a way to change how you spend your time. And it’s not just by spending more time or doing everyone else’s job. If you do those things, you might fix things kind of, sort of in the short term, but you’re just setting yourself up for a world of hurt. So take control of your own time.
You are the boss.
Gini Dietrich: You’re the boss, right.
Chip Griffin: I mean, you are! It boggles my mind when I talk to agency owners and they’re like, ah, you know, I don’t like the way this happens or that. Well, who’s in charge? Right? The employees aren’t in charge, your contractors aren’t in charge, your clients aren’t in charge. You are.
You decide who you’re going to work with, who you’re going to hire, and how you’re going to spend your time. If you have a problem, you are the one to solve it.
Gini Dietrich: And in some cases, you’ve created the problem, so there’s no reason for you to keep it. Like, fix it! One of the biggest lessons that I’ve had as an agency owner is I am in charge of my own schedule.
I don’t have to have a meeting at five o’clock every day. I don’t have to have a meeting, have meetings on Fridays if I don’t want to. I don’t have, like, I am in control of that. And so as long as you have set expectations with your team and your clients, to understand that these are, these are the boundaries in which we work, things are fine.
Like, I have learned that over and over and over again, as long as clients understand where it’s coming from, they’re okay with it. Great. I just went to the Cayman Islands for 10 days over the holiday break. Clients were great. They were like, have a great time. Have fun. No, I didn’t hear from anyone. Nobody called, nobody texted, nobody emailed.
They were like, how was your trip? Wanted to hear all about it. No one cared. So you’re in charge of those things. And that’s, that’s been a hard lesson for me too. Like, and understanding that as long as the work gets done, as long as there’s somebody that they can contact if there’s an emergency, and as long as you’re demonstrating results.
They don’t care. They don’t care.
Chip Griffin: They don’t. And, and it is something that, that owners have a hard time accepting. They think in a small agency, the client is expecting to see me, hear from me. And if I’m not there, I’m going to lose this business. The reality is that the vast majority of clients don’t care whether it’s you or a team member who’s there, as long as they’re getting what they need. If you are helping them produce results, it doesn’t matter who is sitting on the other end of the zoom call or responding to their emails. They just want stuff done. Now that doesn’t mean you can completely take yourself out of it. You still need to have a relationship with most of your clients as a small agency owner.
You still need to come in and sprinkle the magic fairy dust from time to time and make them, you know, feel special and feel like you’re adding that extra value, even though your value may not even be all that much more than the person that you’ve assigned to it. They need to feel that occasionally, not all the time, not all the time.
And if they don’t accept that, they’re probably not a good fit client for you. If they feel like, you know, I need to have Chip on every call. I need Chip to respond to every single email, no matter how mundane it may be. Well, maybe you need to move on and, and find a different client to work with because that’s, that’s not healthy.
Gini Dietrich: Or charge them for that. Sure. Great. Like if they, if that’s the case. Then they pay a premium for that. And, and that’s what I tell clients all the time, happy, happy to do it, but you’re going to, you’re going to pay, you’re going to pay X more than you would if it’s someone from my team. And all 99.9 percent of the time that I, we had one client who was like, I don’t care, I don’t care what it costs.
Okay, fine. but 99.9 percent of the time they’ll be like, no, I’m good. Just, you know, check in from time to time. And you’re like, great, that’s all they care about. I actually had a client say several years ago, and I’ll never forget this. He says to me, Gini, I own a business as well. And I understand that my time is limited as well.
There’s no way that you personally can spend the time that you’re spending with me, which means you’re spending it with all of your clients because I know you and still grow your business. So, I would rather know that you’re growing your business so that you’re here 5 or 10 years from now. So we can keep working with you versus spending all your time with me.
And I could have just hired you as an employee and I was like, thank you. .
Chip Griffin: I think this is an important message for folks to hear if, if 2023 was a bad year for you and chances are, if you’ve continued listening, it’s because it was right. So maybe it’s why you clicked on this podcast episode. But if it was a tough year, the solution is not for you to lean in and do more yourself.
The solution is to figure out what got you there and how you can address those specific issues that exist because, because they do exist. And the problem is if you don’t. If you just figure you can throw more of yourself into it and solve the problem that way, you will end up with burnout. And I just did a webinar on burnout.
You can find the replay on the SAGA website, but burnout is a real issue with a lot of owners right now, in part because of this feeling that 2023 wasn’t great. And because of this feeling that I’m the only one who can fix it, which is true, but it’s not by working more hours. Right. You are the only one who can fix it because you make the decisions, not because you just keep throwing labor hours after it time and time again. You need to get control of the business that will help deal with burnout.
It will help put you in a better place from a business perspective. And then 2024 can be a great year, no matter what the rest of the economic environment is doing. You’re not, you are not beholden to a bad or good economy. Good economy doesn’t mean you’re doing great. Bad economy doesn’t mean you’re doing terrible.
What you do in your own business that matters.
Gini Dietrich: Yeah. And the thing about that is you don’t have to make a decision in a vacuum by yourself. One of the biggest lessons I learned in 2009 when I had to lay off the majority of my team was that I didn’t ask for any help from my team, and because from my perspective, I don’t want to burden them with this.
I don’t, I don’t know what’s going to happen, so I don’t want them freaked out, but in the end, what I learned was that many of them, not all of them, but many of them said, I would have helped you kind of figure this out. And that was a relief to hear because it meant that I wasn’t alone and I didn’t have to make that decision in a vacuum and I probably could have made different decisions based on the fact that some of them were didn’t want to be laid off so they were willing to go part time or like there were things that we could have done differently in hindsight, of course, so you don’t have to make that decision alone.
Like, there are plenty of people. If you work with contractors, call them and have a conversation. And. And be honest with them about where the business is and say, this is what I’m looking at. Let’s brainstorm some ideas, figure out how you can fix things if needed, but use the team around you. And, you know, SAGA community, the Spin Sucks community, there are people out there who will help you figure these things out.
Chip Griffin: Absolutely. And, and, and the sooner you recognize that there’s an issue and the sooner you ask for help from your employees, your contractors, your peers, your coach, whomever, the more likely you are to see a difference because if you, if you wait too long, it becomes much more difficult and you start to make decisions that aren’t going to hold up for the long-term because, you know, closing a revenue gap today, if it’s bad revenue, it doesn’t really help you, right?
It, it, it gives you a little bit more, you know, peace of mind for a few days, maybe a few weeks. Mm-Hmm, . Mm-Hmm a few months if you’re super lucky. But the reality is, if that’s not a good piece of business, you’re just gonna reintroduce the hurt somewhere down the road, because you’re not gonna be able to scale appropriately.
You’re not gonna be able to have other people take on the work and do it profitably and all that kind of stuff.
Gini Dietrich: That’s right. So, and don’t spend more time, don’t spend more time.
Chip Griffin: Don’t spend more time. More of your time in most cases is not going to make a meaningful difference. So figure out how to get it done without doing that.
Take control. You are the boss.
Gini Dietrich: You are the boss.
Chip Griffin: With that. That will draw to an end this episode of the Agency Leadership Podcast. I’m Chip Griffin.
Gini Dietrich: I’m Gini Dietrich.
Chip Griffin: And it depends.