Episode Transcript

From coast to coast, Agency Unfiltered comes home to Boston, Massachusetts. In the final episode of our “on the road” season, we’re with TribalVision. Damien Cabral, partner and co-founder of TribalVision, shares with us a few programs they rolled out to help improve their profitability. Specifically, Damian shares how they've created formalized career paths to improve employee retention. How they've built an expensive freelancer partner network for low cost delivery. And how they introduced a lower tiered retainer price point to help combat client churn rates. Let's jump in. KD: Damien, thank you so much for joining us on Unfiltered. We're happy to have you.DC: Sure, happy to be here.KD: Obviously we're here in the TribalVision offices. So it's exciting to be able to visit you guys and see what you're working on. I think that the best place to start, we were talking before we started this, but TribalVision has been intentional with some of the processes in place you put into practice to help improve profit for the agency. We should unpack that a little bit and have you talk through some of the investments you've made with like career growth and career pathing for the team. So why don't you explain what that looks like and how you shape it.DC: Sure, and that's one of those things where you're constantly retooling it and probably never done. Because every time you get to that next level then you've got to start over again and retool what you retooled three years. So the first few years you're just trying to get a few clients, Hawk your wares. Figuring out what the heck you're doing. No one's too worried about titles or career growth or anything like that. Pretty much your review will look like: “hey, let's sit down. Hey yeah, you're doing a good job.” You can't yell at this person like that, you know. And just back to doing the work.And then eventually you got to grow up because you've got a lot more people. You have to be focused on retaining those people you've invested so much time in. And you've got to add some actual process. So I mean with us right now we're at about 72, 73 people at any given time. So we've probably had to go through three or four of these different iterations. We had a baseline of these are the roles. These are the job descriptions. This is a typical account set up. And then because the work got more complex so the organization got more complex. Or people were looking at us saying, “hey, what's my next step?” Then we had to go back to the drawing board and say okay. Yeah, we do have to actually take this seriously. Sit down, figure it out and figure out what that career progression looks like. So up until now it's been fairly simple because you know. We started with marketing associates, senior associate marketing manager. And the bottom of that band you're doing more of the work. The middle, you're doing some. You're managing some at the top, you were doing more managing. As things have gotten more complex and we've got more clients under each person's umbrella. We've really had to unpack what those look like. And tried to create something. One that aligns our interests with the clients but two also create something exciting for the employees. And I think, you know, that's the most difficult part of the balance. It is looking at what you think the market needs. Looking at what the employees want. And trying to blend those two to come up with something that makes sense for the business but also makes sense for the employees.KD: I mean the balance can be difficult, right? Because you want to obviously do right by the customer always, right? That goes without saying. But at the same time, you want to build a set up where any given employee on any given day can say, “hey, yes, I see myself here long term and here's like the clear cut path for me to grow myself, my career”. Just contextually, this comes up a lot with a number of different agencies. Everyone has their own perspective. Do you tend to like pod your teams? Do you kind of like round robin assign based on client needs? Like how do you actually build delivery teams for for particular clients?DC: So we're in the middle of actually transitioning everything that we've had in the past. So we've done some minor updates in the past. But right now we have two big initiatives going on. One is in the past there were client teams that were deployed. And it was completely across functional team. So you could have a marketing manager with potentially five different managers above them based on how the clients were assigned. And when they were ready to get new clients and everything.KD: Just bandwidth, capacity.DC: It was completely based on capacity and when they were ready for the next account and filling those slots. So one thing we've really been working on right now is not coming up with pure pods where you only have one manager. But really trying to take that complexity and make it less complex and create groups staffing. So that's really where we're looking at saying, okay. If you had the potential as a senior marketing manager to be working with eight different marketing managers a year ago. How can we increase the density of managers you have where you're not just with one or two? But there's some sharing and matrix organization but it's a lot more dense. So it's easier for you to have less conversations about the same amount of accounts.KD: That makes sense. You mentioned that career pathing, growth opportunities for employees, is always an iterative process, right? It's never settling and just continuing to improve that. Based on where you are today has there been anything that you tested, tried. But realize you had to pivot or go a different way? Basically I'm asking was there like something that didn't work out as well as you anticipated? That forced you to pivot or re-imagine it?DC: Yeah, one of the biggest pivots probably happened year three for us. When we originally developed the concept. You know, the thought behind TribalVision was before we get to any tactics we're starting with a strategy. So initially we had a strategy team where the thought was hey, That's a very unique skill-set. Hey that's something some people are interested in. Something, a piece that others are not interested in.KD: Strategy being like the statement of work or like the proposal kind of? The documentation of your roadmap.DC: Yeah, strategy being an actual marketing plan deliverable delivered to the client. So we initially set it up where a separate team would create a marketing plan. And then would hand it off to an implementation team to then go and do. Because on paper, like okay. It's a different skill set for someone building marketing plans from actually running project management and implementing, right? So that's how we initially had a set up. And throughout the years we just had so much friction actually trying to make that work. Because you know, the strategy team would build something and then the implementation team would have to then execute on it. And they might not agree with that initial vision. So that was a friction point internally between employees. Secondly, it was a headache for some of the clients because from their perspective. And it, it makes sense when you say it now but we didn't see it back then. They just spent all this time teaching the strategy team about their business. Doing the discovery, really doing a deep dive. We had an internal meeting to try to transition a lot of that knowledge. But you're never going to get it at the same level as the people who ran the initial discovery. So then the client was frustrated that they had to teach a whole new team everything about their business that they just—KD: They're doing the work twice, right. And I just built all this trust with person A and now you're telling me there's a whole new team coming in. So yeah.DC: Exactly.KD: You saw the friction there?DC: So we blew it up. We said, you know, we still believe strategy is a difficult thing in a unique skill-set. But we're just going to build more blended teams with some people with the strategic chops and some people at the implementation chops. And have the same client, the same team come in and write a marketing plan. That's delivering the marketing plan for consistency with delivering the work. But also to alleviate that headache with the client. So that was I think a great example. Hey, the best plans, you know, don't survive the field sometimes. And that's part of owning an agency is you get good by pumping your head a whole bunch of times. And hopefully being flexible enough to make changes based on what your employees are telling you and what the market is telling you.KD: Very cool, if I'm an agency that is currently at a place where maybe TribalVision was in years past. I want to be more prescriptive and like outline and communicate and build these career paths, growth opportunities for my employees. What would be your recommendations on where and how to get started? Who should I get involved in those decisions? So kind of like outline that process. So I can go home and do it for my team.DC: Yeah, I'd say it's good before just entering one of those brainstorming sessions with the greater team, to put in some pre-thought. Think about initially how you would set this thing up. So it gets the team to a place where they can react to something versus just starting with a blank canvas. And then also list out these are the areas that I have questions on that I do want you guys to weigh in on. So you have to involve the team but you can't just all roll up into a room, whiteboard it and start from scratch. That's usually where a lot of time is wasted. And also the team doesn't know what the barriers are, right. So you as a leader, you need to come into those meetings and say, hey. These are the things that are my non-negotiables. This is my initial vision and this is the area I'm willing to negotiate and I want to hear. And these are the things I have no idea on. And show some humbleness.KD: Say, “this is where your contributions are going to be the most valuable.”DC: Exactly and let them know what tier decision is this? Is this a tier three decision where we're all gonna vote? And whatever comes out of it, we're going to go with. Is this a tier two decision where I'm going to have your input but ultimately I'm going to be making the final decision? And you know, tier one decisions wouldn't be appropriate in this. But this is what I'm doing, get on board. This is what we're doing.KD: Do you organize? I don't mean to bring us on a rabbit hole here but do you organize most of the questions or problems or decisions in that three tiered framework? Is it do you guys lean on that?DC: That's something I've learned I've had to do more in the past. And that typically, friction with clients and with employees is a communication problem, right? So one thing I've learned over the years is when you're soliciting feedback. You need to let people know what type of. What their level of involvement in is and who's gonna make the final decision. And it, you know, it differs.KD: Set the stage from the start so everyone's on the same page when the decision has to be made at the as an outcome.DC: Exactly, exactly.KD: You mentioned your team is what, 72 73 people. But you also have a pretty extensive freelancer and partner network that you lean on, right? I would imagine that involving that group of partners, freelancers helps, again, with profitability to some degree. So what's the decision making process there? How'd you build that network? I'd be interested to learn how you use freelancers more.DC: That's a core to our model because from the beginning our model is different than most traditional agencies Where we actually outsource 100% of design, 100% of coding, 100% of videography.KD: So none of those are in house resources?DC: Not a single employee. We'll quarterback it for the client so it still feels like a typical agency interaction from a client perspective. But 100% of those have been outsourced from the beginning because our argument when pitching the client is, hey. If we don't have those guys on our staff then we don't feel like we need to sell you more design work. Or we don't feel like we need to sell you a bigger website. We're going to write a prescription for what you actually need. And then it feels like we're both on the same side of the table at that point.KD: And clients are pretty open to that?DC: Clients love that.KD: Do they have direct communication to the freelancer network?DC: It depends on the complexity of the situation or the type of client we're dealing with. Usually we want to manage most of that communication. But if there's a really good reason to have one of the developers jump on the phone with their IT department, we're not going to hide them in the background. But because that is how we actually established our model. From day one, we had to really create a process to vet the research partners. Vet them with pilot projects and then communicate to the team who's good and who's not, what the right fit is. So it's been a labor of love. We've got our stable of probably 30 partners that we lean on very heavily where we almost fill up a full time job for them with the amount of work that we have gone out. But we also can't just rest on those guys, right? We have more clients, we have more people, more demands. And the marketing world is changing. So we actually have a committee here but one of their jobs is on a regular basis. Interview new partners, look at their work. Find out what their pricing looks like. Onboard them with NDAs and everything else. And then encourage the team, let them know “hey, these are the new guys. These are the fits.”KD: Here's what they specialize in, here's where they can help.DC: Yeah, give them a pilot project and then let the rest of us know how that went.KD: So where does the team go to research or find new partners that they want to reach out to or talk to?DC: It's a lot of LinkedIn. A lot of our natural networks but also the Fiverrs, the Upworks and places like that.KD: You mentioned pilot projects. Is there any process around your guidelines, your requirements, and style guide? What does that vetting or qualification process look like? To say, “we deem them ready” to take on projects for the whole team.DC: Typically, we're looking at their portfolio on their website ahead of time. If they have reviews online we're reading through those. There's an initial scan and call where we have a conversation with them. See what they're all about. See what kind of vibe we're getting from them. Asking preliminary pricing questions, those sorts of things. Then we'll have them sign an NDA and then after that we'll write them up and put them in our partner database on Trello where it's fully searchable for the team. They can easily find all the contractors and what they specialize in. And then we're trying to give them a small pilot project. So if it's a designer, it's “hey, here's five sales sheets, fixed bid”—you know.KD: But it is like actual client facing work?DC: It's client-facing work.KD: Small stakes, low stakes.DC: Exactly and then if they do well on that then they're sent up the flagpole. The whole team knows this is great new guy or gal. We should use them and this is my experience to date and then they get a lot busier.KD: How often do like issues or friction come up? Require like around your timelines. When you need deliverables. Do you ever have any communication issues with folks in this partner network? How do you kind of navigate those conversations?DC: That's, that's the life we live, right? Client management, expectation management. Hopefully we've navigated some of that from doing this for almost 10 years. To know like hey, when we're scoping the project. Make sure we ask the client X, Y, and Z because this bit us these many times. And you know like anything, things are gonna come up. So I think it's just having an open line of communication with the partner when there is a dispute about pay or about timelines or anything like that, just being reasonable. I mean, being in client services we know how it is when you have a bad client. When they're coming at you and being unreasonable and just trying to squeeze everything you can out of them. We don't do that. We pay people on time. When there is an issue we're reasonable. You know, is this an instance where we should eat the difference? Is this an issue where we should split the difference? Can we make it up to them in the future where if they are good partners right now and put in a little extra work. We'll try and make sure they're on a really good project next. So just treating people how you want to be treated.KD: That's a good point. Where can we just make sure that there's always goodwill and we're using good judgment from the client's perspective? Because okay, if a freelancer isn't doing their duties. Like yeah, that might burn the TribalVision team. But you also have to think it's at the end of the day going to burn the client, right? So to your point, where do we eat the difference? How can we rectify? But you're always just again, putting the customer first it sounds like, yeah.DC: Yeah and like anything with employees and with clients. You learn a lot of people during the bad times, right. So everyone's their best self during the good times. You really learn what someone is made of when you're in the shit. So you know, there's plenty of partners that we've built so much trust with in the past. Because, you know, I can look at them and say hey listen man, you did nothing wrong. This is the situation we're in. This is the only way we're going to get paid by that guy. I'm not gonna penalize you in any way but whatever you can do to help me out here would be appreciated. And the guys who I've been working with for nine years. They know I'm gonna make it up to them. So if they've got to do some extra work and not charge us more because the client's not gonna pay. They'll do that but they know hey. The next time there's a really nice project, it's coming your way. And I don't forget those things.KD: So if I'm looking to scale my own agency. I probably am looking or already working with freelancers right. And you mentioned a couple examples, design development. Is there a freelancer or a partner that you use that maybe you didn't anticipate being so valuable? But like this type of specialization or projects that they work on has become invaluable. I'd be interested in is there any unique use cases for freelancers that you've found to be very valuable?DC: Yeah I mean, I guess those are the old tried and true and the new stuff that's coming up. The new stuff that's coming up is Amazon. So I mean all of your viewers probably know. They're not just taking up a big bite of the e-commerce bucket now. But they're also starting to take up a big chunk of the ad dollars. And that's a very specific skill-set. It's kind of a gold rush right now. So it's probably not someone who A, have enough work to put on your payroll. And B, even want to think about paying that person full time because it's similar to when the iPhone first came out. How much would an app developer cost? They could tell you it's $500 an hour and you'd pay it because there's only so many people.KD: Where else are you going to go?DC: Right, who can build an app on an iPhone right now? And that's kind of where Amazon is. I think as time goes on you'll see some of those fees come down. But it's not unreasonable for me to be paying $500 an hour for a contractor. And I have guys on staff who can do some Amazon stuff. But when it becomes, you know, to be a sizable project or a very specific question that's above our pay grade. Those are difficult to find. And the other skill-set that we outsource a lot that is very valuable for us to be able to not have in-house. But also for our clients to drive really good work product and a low dollar are the brochureware WordPress websites, right. So where we have a few core developers, where our process is. We're going to work with the client to buy a template. We'll customize the template. This isn't a pure 100% from scratch design because it's responsive and everything. You know, you're not looking to do anything advanced from an e-commerce perspective. You're looking to tell the world what you do, who you are.KD: Right, some basic conversion points.DC: Yeah, exactly. So you know, we probably pump out 75 of those sites a year. So they have a few partners that really have gotten this to be an assembly line. And can pump those things out at a good cost where there's margin for them, we're not killing them. right. Because they built a process behind it. But also our clients are seeing a lot of value because something maybe they got a quote for $40,000 out in the marketplace, we can do for $15,000.KD: That's great, so it all comes back to building those strong relationships with the partners that you know, do good work. And it's a win, win, win for them, for you and for the end client right?DC: Yeah, and you have to do right every day no matter where you're at right. So I have some months where something happened and cash is a little tight. You have a decision to make then. Are you going to pay these guys on time or are you going to protect your own interests? And nine out of 10 times we're saying, nope. We'll pay them well in advance of us actually getting paid by the client. Just to make sure, you know, if there are those tough times on the other side. They remember those small things I did for them.KD: It makes sense. The last thing I do want to cover as we just talk about all these plays. Processes to improve the profit margins for TribalVision. The third piece is this idea and I don't. Is it like the maintenance program or maintenance retainers? And so I don't want to butcher the definition. Explain exactly what that is and what motivated the decision to add in that layer for your service offering?DC: So our model is a little different. Where we're deploying a four person team to a standard account at various skill-sets. So because of that, I know exactly what my cost is to deploy every team right. So that also meant we had a minimum retainer, right now it's $8,500, and I know what my margin is deploying a four person.KD: Was it always $8,500?DC: No, it's gone up over the years.KD: I bet a lot of agencies would like to be able to say that $8,500 is their default. I'm sure it's something that you ended up growing into.DC: No, I mean right now our first plan ever cost $2,500. It's not uncommon for us to be charging $20,000-25,000 for that right now. So like anything, as you get a bigger client mix and more recurring revenue, you can then slowly increase your prices based on having some, you know. Some comfort knowing your rents going to be paid by the last guys. So your close rate can go down on the new guys. And also, you're constantly testing what the market can bear. But yeah, where we are right now. It's $8,500 for a standard team to be deployed to your account. Many accounts are above that but that's our minimum. So because of that, when clients would have conversations with us about decreasing the retainer from a budget perspective or just how much work they need. We were pretty rigid in the past. We said no, we can't. You know, it just doesn't fit our model.KD: So you were losing the difference between $8,500 a month and zero, right?DC: Exactly, yeah and it's cutting your customer lifetime value. But you know up until that point we said this is our model, we're sticking with it. You know, we know it works. And over the past few years we're really trying to take a hard look at it saying, you know. How can we do this? How can we build something where we could extend our life with these clients? Especially the ones that still love us and like our work and our feelings impact from us? But for one reason or another, can't afford or don't want to pay that amount anymore. And that's where we re-imagined this with the maintenance model. We're saying okay, let's build packages that require more time from a lower level resource, that's a lower cost resource and less time from a manager. How are we going to do that? We need to build something that is surrounded around more repeatable process oriented work. And less of a unique thought process and strategy and all that. So we developed an offering where it could be a lighter touch from a manager and more work done by the associate. And actually cut it in half for the end clients. And that's really worked out well. If you look at our portfolio right now I have a really decent portion of people in the maintenance program. Where the clients are paying us for the work, less than $8,500 a month. That's probably extended our lifetime with them by a year or two. And it also creates a situation where you can defend that relationship more because if they paused then stopped. There's a higher likelihood that they might go back out to the market if they share a new need right. They remember you but maybe they're going to try someone else. How much easier is it if you have a base retainer $4,000. They've got a temporary increase need where, “hey, we have a big project or we have a new product we're launching, we're gonna to temporarily increase the retainer back up to $10,000 a month for three months and then drop back down to the $4,000.”KD: So you're pretty fluid in the way folks can navigate between that full retainer versus maintenance. How did that change the sales process? Do you now go to market and lead with the maintenance price? Or is it only a downgrade option once they've committed to the minimum agreement at the default retainer?DC: Yeah, we feel that situation out based on what the initial budget is for the client. We're not leading with it oftentimes because we want to protect the main part of our business. And also it's not a right fit for the client out of the gate a lot of the time because if you think about it. If you're starting a new marketing program. There's a lot of work upfront and you need a lot of resources front-loaded. You're writing a marketing plan. From the marketing plan you're standing up all these new initiatives. I might need to bring in HubSpot and build a whole marketing automation platform from scratch for you and overhaul your website. That's a lot of hours and you don't want that to take a whole year. So for you as a client it makes a lot more sense to have a full team come on in the beginning. Stand up all this stuff quickly for you and then once a bunch of the sexy new stuff is up and running. And we've got the blueprint.KD: The foundation is set, yeah.DC: Then let's talk about calming down the span, calming down the work. Moving more to process oriented work but it's not a good fit when I'm saying hey. We got to think big thoughts and stand up this martech stack. To be doing that at a $4,000 a month retainer.KD: What percentage of your client base is now downgrading to the maintenance piece? What's the percentage there and is it more or less than you anticipated?DC: It's more than I anticipated, which is good. It shows when people were looking up originally give their notice. It wasn't because we were doing bad work. It was more of a budgetary decision. Right now, it's probably about 10-15% of our total revenue every month. Which is huge when you think about what would our revenue have looked like without it. I think it's also been exciting for the team to see. You know we're not just doing the vanilla ice cream version of the model anymore. Like this is a new career path, to our earlier conversation, for someone. There is a new division lead for this. This division can also spread out to do other things. Like before we didn't do project work, all of our clients were retainer base. This maintenance team has now rebranded the special projects team. And in addition to the maintenance work that they're doing. They're also taking more two to three month projects because hey. We can staff that a little lighter with managers. Hey, maybe we have a few more freelancers involved because it's a shorter term gig. But it creates a new opportunity to take work that we couldn't take before. Without breaking the system with how we have the rest of the 85% of the business.KD: No, that's great. So if I'm an agency looking to get started with my own maintenance retainer, right. I have my default but now I'm also exploring with this lightweight maintenance type option. What would be the service delivery options there? What do you guys provide for clients at that maintenance level?DC: It's a lot of process oriented work. So we're doing a lot of email deployals. We're doing a lot of SEO maintenance, right. So SEO as you know, isn't something you just do once then you're good. It's more like a mutual fund. You have to put money into it every single month. So a lot of emails stuff, a lot of SEO, adwords management, paid digital management, those sorts of things. And one other thing I'd say for the viewers is to make sure you're not just looking at the hours and the type of work. But you're looking at the client management aspect of it. Because at least for us, the people transitioning from the traditional retainer to the maintenance retainer. They're used to a very high touch service when they're paying a lot of money. You need to reorient them to what are the touchpoints gonna look?KD: It's going to be less frequently. It's going to probably be lower. Lighter on like actual consultancy.DC: Yeah, you're going to get your monthly report. We&#x