Episode Transcript

The Agency Unfiltered train rolls on. In this episode, we have Ryan Malone from SmartBug. Ryan is the CEO and founder of SmartBug, a Diamond HubSpot partner in full-service inbound agency. Ryan joins us to talk about team structure and how SmartBug has historically organized their team to set themselves up for growth. We talk about SmartBug's pod structure, career pathing for their team, and how they split up responsibilities by role. We also get Ryan's unfiltered approach to sales, a justifiably hot topic for agencies. Does Ryan hire team members dedicated to sales, and if so what are they in charge of specifically?

For the answers to these questions and more, let's dive in.

KD: Ryan, thanks for joining us. How you doing, my friend?

RM: I'm great, thanks for having me.

KD: Yeah, of course. Obviously we were just talking a little while back about how it's so important for agencies to build a team model or build a team structure that's going to set them up for growth in scale. It sounds like SmartBug has been able to do that so I'd be interested to hear about how you guys have kind of organized your team to date.

RM: Yeah, sure. So, and I think any growing agency you kind of iterate over time. What we found, we have about 58, 60 people now.
What we found is that in our current structure at about 30, 35 people, we decided to put in a slightly different pod structure. The way that we're set up is we've got a strategist who owns the revenue.

They've got a number. They're kind of a senior-level 10 year plus client-side marketer type person. We find that that creates a lot of affinity with the clients that we're trying to go after because oftentimes your hiring profile determines who you're ultimately going to sell to.

Since that person owns the account and then underneath that we've got a number of consultants, and our team kinda has some flexibility to determine the consultants that they have underneath them so that they can either grab a bigger book of business or a smaller book of business, depending on where they're at in their development. What makes that very scalable is any time you need to add accounts, one of those strategists owns five, seven, eight accounts. Anytime you need to add accounts, you just add a new pod that's a strategist and a consultant. The benefit of that is that the consultant gets to be mentored by the strategist.

The strategists, you know, some number of them roll up into a consulting manager. So you have now this small army of strategists who are prepared to be consulting managers because they manage people over time.

And it becomes really easy to scale. And then within that team, we have graphic designers and writers and things like that. So within a one consulting manager structure you've got eight strategists, you know, anywhere from eight to 16 consultants.

Some creative people, some writing people, and it's just easy to add those as you got over time.

KD: And do you find that the sort of career growth or career path for a consultant is to eventually move up into that strategist role?

RM: Yeah, some. I mean, as you get bigger there's areas that you can specialize.

KD: Sure.

RM: So some path for people might be to be a consultant and then be a strategist and then be a team leader, kind of traditional.

The other path that somebody might take is they might just really, really love the client work and not so much the management side and they can go from a consultant to a strategist and maybe they specialize on vertical or maybe they specialize, you know, on marketing sales or service, and it kinda depends on where it is. And I think if you've got a good enough growth rate and you're starting to build that, there's a bunch of different paths that as an agency you don't even really think about until you know it.

And so it gives people a lot of flexibility.

KD: I think it's interesting to have kind of those different avenues because I don't think growth has to be synonymous with “people management”. And so you fully embrace that, right?

RM: Yeah.

KD: One thing I did notice is that as we’re visualizing this team structure, I didn't hear you say the words “account manager”. So kinda where does that fall into the mix? Is that what a strategist is or how do you guys kind of take that account manager role?

RM: Yeah, account manager's kind of a four-letter word at our company. We found over time that our clients don't like account managers. And I know before SmartBug I used to run marketing at some tech companies and we hated them. Account managers, they're great people and this isn't a bash against them. However, the account manager's sole job at an agency is to run interference between the strategist that they really wanna hire and the client, which causes two problems.

One, that person is kind of deciding whether or not a question is important, which is really frustrating to a client. And then secondarily, the growth within an account itself is really driven by the work of the strategist and the consultant.

KD: Yeah, makes sense.

RM: And not the random call every once in a while from an account manager who's fishing for a new business. So we decided to get rid of that role entirely. Maybe you take a tiny bit of a margin haircut by having your strategists on less accounts because they don't have an account manager offsetting that but we've just found that having our strategic team be the digital marketing director for a client is a far better model for our team.

KD: And so what have you seen as implications for upsell opportunities or for growing your retainer? So we're moving away from the account manager and letting the strategists own that. What have you seen as a trickle-down effect on new business within your existing client base?

RM: Yeah, so from an initial sale perspective we found that our close rate went up because clients really, they understand that that's a problem but most of 'em think that that's just the nature of the beast with agencies and it's not.

From a growth perspective, growing the account is far easier because it's a very natural discussion to have a strategist who just did a great job on an account and showed some ROI to say, "Hey, here's three more opportunities." I have some street cred now that I can put towards that. I'm trusted with your management team so that incremental investment really isn't even a sale. That's just a natural extension of your team and so over time you get significant organic growth from all the accounts that you have, at least in that model for us.

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KD: Yeah, the street cred piece is really interesting. If you've been able to deliver remarkable results, and have that positive ROI, then the conversation feels pretty natural versus, say, an account manager coming in with a pitch or an upsell proposal — something like that. It's just a naturally flowing conversation, you feel?

RM: Yeah, I mean, look at what you've done. Right, you've created this great, you know, this great production, so the next time that you wanna go do something you're like, "hey, I have some street cred. "I built this thing. "I have these viewers." So the next time that you have a great idea it's a natural extension of what you've already done rather than somebody who you see once a quarter coming in and being like, "check out this whiz-bang product I have for you."

It just doesn't work as well.

KD: You mentioned, it's really interesting too, that you also saw the positive impact on new client acquisition. So do you use the strategist role or team structure as part of your differentiation? Or is that part of your sales conversations at all? How do you draw the line between the impact on new client acquisition? What do you attribute to it specifically?

RM: Yeah, so we, for some prospects, they care. Most of 'em, quite honestly, they don't really care what your team looks like.

I remember in one of the addresses that Dharmesh made recently, it's like, "It doesn't really "matter how our organization is set up "or what our processes are. "It's whether you deliver." So I'd say probably half the time they're going to buy from us based on reputation or case studies or other proof points that us or any agency is going to do.

The ones that really wanna dig in how the team is structured, it aligns with kinda how we've built our company so it flows really nicely and we feel like if we're working against an agency who's got a pretty heavy account manager setup that it's pretty easy to position us because a greater percentage of their retainer dollar's going to go to work and not overhead.

And so we're able to provide I think better value out of the gate which ultimately leads to more ROI.

KD: Yeah. So you also mentioned there are 60 people at SmartBug currently?

RM: Yeah, right now.

KD: So another role that's always really interesting is how agencies try and figure out sales, right? When is it time to bring in a dedicated sales rep? Is it like business development person to feed opportunities to an account owner? Now at 60 people, when did you decide to bring in a dedicated sales reps or dedicated sales team?

RM: Yeah, so we actually haven't made a outbound sales call ever. We've been around for eight, 10 years now.

KD: That's quite a feat.

RM: Inbound works, you guys.

KD: Yeah surprise, right?

RM: So our sales team, we hired a sales and marketing manager, or a vice president, about a year ago. Her name's Jen Spencer. She's amazing. She's been here about a year. She's got two reps that work with her. The profile of our sales team is not the classic SDR, you know, “call, call, call” type thing. They're effectively like strategic consultants that can really dig into a business and understand at the sea level and down how the business works together and where digital marketing might fit in, of which inbound is a huge piece of it.

But there are other pieces too that they need to be aware of, and so selling for us is predominantly qualifying what we get in, making sure that we've got a really aggressive marketing plan and making sure that our sales team can really dig in and understand the business, much in the way that a Big Four consultant might be able to go in and understand a company.

KD: Yeah, it makes sense. I mean, 10 years without having to make an outbound call; okay, yes, you mentioned inbound works. I think a lot of agencies, especially the ones just getting off the ground, they maybe sign their first clients and they have to go all in on delivery.

Do you have any tips, tricks, on how you guys have such an aggressive marketing plan? How do you prioritize or focus on marketing alongside client delivery? Any tips for somebody trying to nail this whole process?

RM: Yeah, avoid the cobbler has no shoes dilemma, right. Everybody at SmartBug has to write an article, a blog post, once a month and then they collaborate on an e-book once a quarter. And then we also bring them together for some larger marketing-oriented projects like some of the ones we've done with you guys on the Academy.

And so, by doing that you have this natural momentum. So, you know, right now we have, you know, 60 pieces of content that are available to us that we can use for ourselves or co-marketing or things like that.

We'll probably be at 80, 85 by the end of the year. So the more people that you bring on, if you keep that requirement in place, as you grow you have a natural extension of your marketing leverage. That's probably been one of the biggest things for us because even though we have a couple person marketing team, like they're not struggling for resources. They already have resources built in and we just limit the amount of client billables that our team does so that they have time to focus on marketing and it gives all of those consultants and the rest of the people on our team a chance to get their own brand out which is also really important for anybody, right?

KD: Yeah, right. No, it makes sense. I agree wholeheartedly about sharing the responsibilities across the team. At 60 people, you might have somebody that oversees all of the production? But I could see on a smaller team, it might be harder to ensure consistency, voice, tone, and the quality of the content. Did you guys have to face that as a smaller team? How did you tackle that? How do you maintain the high quality?

RM: Yeah, so we put together some SmartBug marketing guidelines that basically articulated our voice and our tone — kind of like how you would with a client, right?

Your voice and your tone and the areas that we wanna talk about, how we're going to use categories, the types of things that we write about and don't write about, the level of depth, how we choose imagery and things like that.

And since we're doing this work for clients anyway, like a lot of agencies are, it's not that different than doing something for your client. It's just a matter of applying your voice. And at the end of the day, I think a lot of times agencies will overanalyze what they need to do for this, but the reality is is you get a lot of swings at the ball. So focus on getting something that's really going to resonate with your client. If you miss something for the first time, whatever, like you're going to have a second chance to do it from a different angle and just like put your head down and keep doing it. Don't make your own marketing be a second priority to you. Make it be the first priority. And I think you'll be in pretty good shape.

KD: So just putting those guidelines in place, it just eliminates any and all guesswork, right?

RM: Yep.

KD: That's a pretty good structure to it.

RM: It's self-sustaining, yeah.

KD: Now obviously you guys have a fully remote workforce. I think that may be well-known at this point. If somebody's trying to make that transition, especially with your team structure set for scale, do you have any general tips on how to get started with even your first remote hire as you build up a remote team?

RM: When you're working remote the biggest risk to your culture is alienating the people that work for you. So if you're, there's two remotes, there's a hybrid company where you have a home base and then you have satellite people, and then there's a full remote like we are. Don't under-invest in culture. You've got to invest heavily and force it. If you're trying to do remote just because you wanna save money, you're doing it for the wrong reason.

If you're trying to do it because you wanna have better talent, that's a better reason. But if you have this hybrid model where everybody's, there's some home office and satellite people, the people that are on the satellite, they're always going to be less in the know than the people that are in the home office.

KD: They don't get the luxury of the quick chat on the side.

RM: Exactly, and it's not like you're going to be like, "Oh, you know what, we're talking "about the weekend. "Let's go call Johnny."

That doesn't happen. So you have to work really hard to make sure that they feel like they're a part of the team. And in a all-remote model they don't see each other that much, right, so you have to say, "I'm going to allocate a significant budget "to make sure I get people together "in a memorable experience so that they "have time to bond with each other "and so that their family members understand "what it's about," because all they see is somebody working on a screen.

At the end of the day, if they have a bad day they're going to go talk to their spouse or life partner or whoever's important to them and you wanna make sure that they understand what you're about so that they can kind of help you when something happens.

KD: No, makes sense.

Now, I always ask this as the final question. I think you're going to have an interesting answer, obviously with just with how long you've been a member of the partner community. Obviously, your work first being remote. So my final question: what would you say is the weirdest or most strange or strangest thing about agency life?

RM: I think the biggest thing, the strangest, is probably that if you sit back and you write down all of the prospects that were kind of in these crazy areas with crazy products and crazy services and stuff, it's, I don't know that it's weirdest, but it's fascinating how many different business models there are, how many different take over the world ideas you see, some good, some bad.

I think it's more just fascinating. As a agency owner, you know, we get to look at so many different business models and you get to apply everything that you learn from one business model to another. I had a mentor once who told me, "Beware of the naive marketer who only focuses "on one industry because they're cutting "themselves off from all the lessons "they would learn from the others." So we try to practice that internally.

KD: I love that. That's a great answer. Well, Ryan, thanks so much for coming on, my brother.

RM: Thanks for having me. I appreciate it.

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