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The Professional Services Expert Series: A Q&A with Karl Sakas, the Marketing Agency Leader’s “Dr. Phil”

By Mark van Leeuwen, CEO of VOGSY

Welcome to the newest edition to the VOGSY blog, The Professional Services Expert Series. We’re fortunate to interact with leaders and influencers involved in a range of professional services industries and would like to share their expertise. This is the first in a series of interviews VOGSY is conducting in order to bring you their thoughts on the topics that matter the most.

Our first interview is with marketing agency expert Karl Sakas of Sakas & Company.

Marketing influencer Jay Bear calls Karl “the Dr. Phil of agency owners and managers: one part confidante, one part ass kicker.” Karl has shaped hundreds of marketing agencies worldwide, enabling owners to conquer growing pains. He speaks at national and international events, and has written several books, including Made to Lead: A Pocket Guide to Managing Marketing & Creative Teams.

I recently chatted with Karl for tips on how to improve a marketing agency’s health and create revenue goals.

MVL: Marketing is constantly changing. Since the start of the digital revolution, agencies have constantly been adapting to new practices, strategies and technologies. It can be overwhelming. What’s the most important thing you can do to keep an agency on track and moving in the right direction?

KS: Plan for the expected, so when the unexpected hits, you’ll have time to improvise. You’ll either avoid emergencies, or at the least, have fewer ones. This includes setting profitability goals, which requires first setting revenue goals. When you set revenue goals, benefits fall into three categories: capacity planning, runway and compensation planning, and growth style alignment.

MVL: OK, let’s start with capacity planning – a major pain-point for agency owners today.

KS: You want to hire at the right time, upgrade your agency structure, and upgrade your internal processes. And you want to do this before you hit crisis mode.

Hire too early and you’re paying people to do work you don’t need done. Hire too late and your people are overworked, morale suffers and turnover follows. When you set revenue goals you’re not guessing – you know what you’re trying to hit, when and have an idea of where you stand – so you can plan accordingly.

You need to know when to upgrade your agency structure, too. You can’t scale without making changes. As you grow, that likely means new team structures, which could entail adding roles like subject matter experts or a head of new business development. Capacity planning helps you understand when those hiring points will come.

Projecting revenue can flag problems in your internal processes as well. If you have aggressive growth goals – more than 30 percent annually – you’ll probably have to revamp your project management processes. What worked last year may not get you where you want to go now. And that’s certainly true for account management because you’ll be bringing in more clients and need to consider changes to onboarding.

You want to resolve all or most of these questions in advance, not during a fire drill.

MVL: How does runway and compensation planning tie in to revenue goals?

KS: It’s about knowing if you’re on-track and identifying shortfalls while there’s time to fix them. When you manage against revenue goals, you build that “runway” to avoid mid-year financial crisis since you’ll see a problem before it turns critical. And compensation is motivation for your team and yourself, whether it’s inspiration to reach that dream goal or a nudge to pick up the pace if you’ve fallen behind.

Personal compensation ultimately stems from your agency’s overall budget: More money in and less money out typically allows more compensation for the owner. If revenue projections are down, you’ll know to cut your compensation or make other cuts. It’s not fun but it’s better to know in advance and tackle the issue than to delay and burn through your agency’s emergency cash reserves.

Your revenue goals help you know what — if anything — you can pay in profit-sharing, too. If numbers are down, I recommend communicating that sooner than later. It may lead to some hard feelings and perhaps even staff departures, but more likely it will help you enlist current employees to overcome the gap. After all, they typically understand the situation; they’re doing the work. Transparency is better than people expecting bonuses that never arrive, especially if they’re relying on that money.

For more information on how VOGSY can help your agency today, contact info@vogsy.com.

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