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    Measures Agencies Can Take To Make It Through COVID-19 With Drew McLellan

    Posted by Greg Smith on April 23, 2020 at 8:00 AM

    Making It Work

    Living through a pandemic has had a major impact on marketing efforts across the board of every industry. Many business owners are finding themselves in the difficult position of wondering how to continue with operations.

    Recently, our CEO Stacy Jones sat down with another agency owner to discuss how to move forward and continue operations to weather the pandemic storm. In this blog, Hollywood Branded examines measures agencies can take to best prepare to make it through COVID-19 from the advice and expertise of Drew McLellan.


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    A Little More About Drew McLellan

    Drew McLellan is the CEO and founder of McLellan Marketing Group. With over 30 years in advertising, Drew is a true veteran in the advertising industry, but it's more than that. Drew is a constant resource for so many in the agency world. He's spoken at conferences and appeared in publications like Entrepreneur Magazine, New York Times, Washington Post Agency Post, Ad Age, CNN, Business Week, and so many others. The Wall Street Journal even calls him one of 10 bloggers every entrepreneur should read.

    Drew owns and runs Agency Management Institute or AMI, which serves over 250 small to mid-size agencies of all types so they can better learn how to increase their AGI, attract better clients and employees and let the agency owner actually enjoy the perks of agency ownership.

    Drew recently co-authored a fantastic content marketing book for agencies that you should check out:  Sell With Authority: Own And Position Your Agency's Authority Position.  Our agency is mentioned as one of those who is doing content creation right!

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    Interview Transcript Highlights

    Question: I'd love to have you dive in a little bit and talk about the information that you're seeing and why agencies need to be preparing themselves right now.
    Answer: So we're recording this on April 3rd and that's critical to mention because this changes every stinking day. And so what's happening in the US is most of us have been working from home three, four weeks depending on where we live. Many agencies have experienced client pauses or cancellations, but one of the messages that I've been trying to convey to agencies is I think it's really easy to get caught up in the panic of all of this. And what I'm seeing with agencies, and we're talking to hundreds of agencies every week, we're holding open mic webinars just to answer people's questions.

    And what I'm seeing is about 20% of all the agencies are actually busier than ever, that COVID has actually been good for them. Maybe they have a lot of healthcare clients or their clients are just not affected by the virus. They are just keeping keeping on, right? On the other side of the spectrum, probably another 20% of all the agencies that we've seen have had 50% or more of their revenue walk out the door in the last couple of weeks. And they of course are thinking about furloughing staff, laying staff off. How do they manage to survive literally to survive through the next couple of months as we sort of navigate this storm. And then the other 60% are somewhere in the middle.

    I would say on average we did a poll and we only left it open for a couple of days, but we asked, it was about 125 agency owners, sort of how COVID-19 was impacting their agency. And honestly the lion's share of them said that right now they're seeing about a between a 10 and 20% reduction in their AGI. That's sort of the average. And so I think it's super easy when you spend a lot of time on social and when you are watching the news to immediately go to doomsday level panic around this. And for some of your listeners, that's exactly the level of panic they should be at. But for most agencies, we don't have to be quite that panicked.

    China went through this before us and they're still trying to figure out what they're doing and we can look at a lot of what is happening in China to see what's going to happen here in the United States. Although I think we're going to have a longer shutdown than they potentially had. They had two months, I think our government's talking about extending it into the summer months for us. But what they are seeing are trends like Nike, they hit a complete decline when they shut down all of their retail stores. But they also changed their messaging and they promoted differently through digital advertising and they saw an increase in sales when people were at home.

    I've been in touch with agency owners from Asia and in fact I did a podcast interview with an agency on owner from Hong Kong who owned a 50 person agency that had offices in Hong Kong and mainland China. It was really fascinating and sort of filled with hope for me of what happens. And what she said was, you're right, they were shut down for six, seven weeks. They worked from home. And for them it was... it's interesting in China, it was an edict from the government. In Hong Kong, it wasn't. And what she said was, because they had lived through SARS 20 years ago, I think it was 17 years ago, as soon as they heard highly infectious virus, they all just went home. Right? And they were just like, that's it, we're done. Which is not of course what's happening here in the States, but they are back at work.

    And so for them, the virus really struck at the end of Chinese New Year, which is the tail end of January. And so by mid March, late March, they were all back in their offices. They were all back to face to face meetings. Restaurants were open again. And what they were seeing was an uptick in business. And interestingly, particularly in the industries that were hit the hardest. So this agency owner and this agency specialized in travel and tourism. So they were of course decimated when everything shut down. And they had a lot of cruise clients for example. But what they found is that after everybody had been sort of on lockdown, that they were so hungry to reward themselves, that two of the biggest spikes in spending were in luxury products and travel.

    So everything else is coming back. And she said, it's not like you flipped a switch and everything was back to normal, but it is coming back to normal. And part of it is businesses realize, and we're in the early stages here in the States where I think everyone is still in full on panic mode. They're hoarding cash, they're acting like they're never going to leave their homes again.

    Question: What do you think is important for agencies to stress to their clients at this time?
    Answer: Onne of the things we have to be doing with our clients is helping them understand the risk and the cost of going dormant, but we have to do it when they're ready to hear us. And I don't think that's today. I think that's a couple of weeks away at least. And we have to do it in a way that doesn't look like we're just trying to put our hand in their pocket.

    I think it's a delicate balance. I mean I think that's what the paycheck protection program, part of The Care Act is all about is basically, I was talking to an agency owner earlier today and he said basically the federal government is giving us money so that we can become our own unemployment office for a couple months. Right? And I think that's what it is. I think it's giving us the opportunity, and again this is not going to be the right choice for every agency, but for many agencies, the fact that you can have your payroll covered for the next couple of months allows you to not let as many people go or maybe not do as deep a pay cut so that your team can stay reasonably intact and you can continue to serve the clients that are sticking around. You can continue to invest in all of the things, all of the cobbler's children have no shoes things that you should be doing for your own agency that you never make time to do. Now is the time to do that, to be innovative, to be thinking about what are our clients going to need.

    For a lot of agencies, for the last two years they have been telling me, "We can't get to the C suite. There's a feeling that we can't get up to upper management. We really want to be a more of a strategic partner." Well guess what kids? Now's the time. Because now they're going to talk to you. Now they have time, they're hungry to talk to you. So now is the time to invest, especially as an agency owner with your C suite clients at that level to create and foster a better relationship with them and just to help them get through this. Right?

    I think there is no substitute for being in the same space, face to face. I think we all know that. But at least with a Zoom call, you can look at each other. You can see their expressions, you can see the nonverbal cues. Honestly, one of the things I'm loving about the Zoom calls is you sort of get a peek into everybody's life in terms of what does their office look like? Are they working from the kitchen? And here comes their dog or their kid or whatever. So it makes it actually more human in a lot of ways than we've been able to be with our clients when we're sitting in their conference room and everyone's in a suit and all of that. So I think there's some upside to it.

    Question: What should agencies be doing? How should they be spending some of this time and deep diving in?
    Answer: I think an agency owner right now needs to be thinking about a couple of things. Number one, they need to be spending a lot of time focusing on their team. So for a lot of our employees, especially younger employees, this is unlike anything they've ever experienced before. And they're afraid, they're afraid they're going to lose their job. And they're also used to physically for most of us that aren't a virtual agency, they're used to physically being together. And there's an energy and a connection that comes from that that they're lacking and they're missing.

    So we as the leaders need to show up and sort of help them find some inner calm in all of this. We need to be connecting with them on a regular basis. We need to be doing it on video so we can sort of see if they're okay. Because somebody can say over the phone or text or email that they're okay. But it helps to actually see that they're okay. But I think it's also about providing them direction as you were saying. I think they're floundering a little bit, not knowing what to do and they don't really want to admit that they're not busy because again, they're worried about being laid off so they need to understand what their new role is.

    And for some agencies it's going to be keep taking care of clients and keep getting work done. For other agencies like what you're saying, it's going to be like, you know what, we have three internal projects that we've been putting off. Our website and this, or our key studies or whatever it is and we're going to focus on those. So we're going to open jobs, we're going to meet on these just like we would for a client project and we're going to get them done.

    The other thing that agency owners need to be doing is thinking about, okay, what does my agency need to look like to come out of the gate of this as strong as possible? So certainly one of the things you need to be doing is still managing to the numbers. I know there's a lot of loans and other sort of relief opportunities out there, but now is not the time to dig yourself into a big deep debt. So if the paycheck protection program doesn't... Because that's a forgivable loan, right? So if that doesn't get you to stay in the black, then you may have to do a furlough or an across the board pay cut or layoffs. 

    The analogy I've been using is that we as agency owners are the captains of a ship. And right now our ship is being tossed and turned by a doozy of a storm. But our job is to get the ship through the storm and to calm waters. And for some ships it may mean that we have to lighten the load and we have to shed some of our expense, which in most cases are employees. But it's also a time to be innovative, to be a little more introspective about how your agency is showing up. Is this really the agency that you want it to be? And if not, now is the perfect time to be thinking about how do you pivot a little bit.

    And the other big thing that agency owners should be doing is investing a lot of time in your existing client relationships. And I will say this is whether they've hit the pause button or not because whether it goes from a pause to a cancel is all dependent on how they feel about you and how confident they are about the relationship over the next couple of months. So the more you can stay connected to them, the more you can serve them and help them, the more you can support them through this, the more likely they are to bring their budget back to you when it's the right time for their industry or their business.

    Question: Is there anything else that agency owners and execs should be keeping in mind right now?
    Answer: Yeah, I think the big thing that no one's talked about, I just recorded a solo cast about this and it'll come out next week. But one thing that no one's really talking about in the agency space is, and I think it's probably the most important message. We've been so busy doing tasks, trying to get loans and just trying to shore a business that we haven't stopped and acknowledged that we have every right to be grieving what we're going through. This is a loss and for many of us, it's a loss of what we hoped our agency would accomplish this year. It's a loss of financial security, it's a loss of all the things we love about owning an agency, which is the comradery and chasing after new business and coming up with great ideas and delivering amazing results for clients. It is a loss on every level and just like any loss, it has to be grieved. And I don't think most owners have paused and taken the time to actually grieve the loss and to acknowledge that they're angry and they're afraid.

    And I think we were all in denial for awhile. This wasn't going to happen in the US and then all of a sudden that got shot down. And so I think a lot of people are in the super sad or super angry or really frustrated stage. And I think it's important that you recognize that if you do not acknowledge those feelings and you don't allow yourself to grieve, that stuff bites you in the rear end later.

    And just like many of us have grieved personal losses, this is as big a deal for a lot of people. And so it's important that you give yourself some grace and some room to feel what you're feeling and to process it and to get through it. And like any grief scenario, there's no hurrying it up. There's no, you have three days to grieve and then it's time to get back to work. So you just need to recognize that that's the reality for you and figure out how you're to manage through that grief while you still are calm and confident and compassionate and you're leading your team and you're still trying to do what you need to do for your business, but you got to cut yourself some slack.


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    Check Out The Podcast!

    This was just the tip of the ice berg of information that Drew and Stacy got to discuss during their interview. Listen to the rest of it in our podcast!

    Every week we have a marketing professional on our show to share their tips, tricks and lessons learned from their professional experience. Check out some of our other podcast blogs from earlier this year: 

    Every week we release a new podcast featuring guest's with so much knowledge about marketing, you don't want to miss one!  How can you make sure you don't miss an episode? Click below to subscribe!

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    Topics: Business Advice, Podcast Interviews