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Podcast: 2 Questions to Ask An Agency

  1. 2 Questions to ask an Agency.
  2. Google bidding strategies you should be using for e-commerce.
Dave Granfield: Agency

Guys. Welcome back. This is the middle of December 2020. We kind of took a hiatus on podcasts and blogs because we got too busy, but we’re back now. 

Dean Barker:

Welcome back to the new year, with the second podcast for the year.

Dave Granfield:

The second podcast for the year? No, May was when we finished the last one. So we haven’t done them since May. I had James in last week and we had a chat with James who is our head of sales now at the agency. And today we’ve got a familiar face back, Dean, how are you?

Dean Barker:

Very good. Thank you, David. How are you?

Dave Granfield:

I’m good. Thanks for asking mate. Dean today, I want to talk about a bit of a bugbear of our agency. We just played footsies under the table. 

Dean Barker:

It was romantic. 

Dave Granfield:

A bit of a bugbear of the agency, but also something that you’re a little bit passionate about and you wrote us a lead magnet about it. And I want to hear your opinion on it. It’s the top two questions that we are asking and that I think everyone needs to ask if they’re going to work with an agency to run their ads or their creative or anything, you know, if you’re going to pay an agency, what are those two questions, mate?

Dean Barker:

There are sharks in the water out there with agencies, not a super ethical space to be in, but there are some things that you can ask to bring to the surface, whether an agency is any good or not, and hopefully, they won’t lie about these things. The two questions are:

  1. How many potential clients do you turn away? and 

2. What is your churn rate? 

If an agency were to take on board every client that approached them, a lot of those clients wouldn’t be the best decision. Like for those clients, that would be the best decision to approach an agency. And they don’t know that, but the agency knows that like if a client isn’t set up for success, if their website doesn’t convert, maybe that product is just rubbish in the first place.

You know, if they’re just starting out, they don’t know all this. If their business is at that spot or it’s just not going to work yet, regardless of how much traffic goes to their site, there are some agencies which will say, “I have this client and this obviously isn’t going to work, but Hey, they’re going to pay us and Cha-Ching, cash in the door”. There are a lot of agencies out there with that business model. They can say, well, we did our job. We send all the traffic to your store.

Dave Granfield:

Yeah. Time and time again, we’re seeing other agencies, freelancers, etcetera, just taking on anyone who comes across their path. Right? And usually, the same thing happens, in three to six months when the contract’s up or when the agency starts to get a bit of pressure on them. There’s always an excuse. It’s like “we’re sending traffic, but it’s not converting,  It’s your problem? It’s your website, It’s your products or it’s the product-market fit”. And 99.9% of the time, all those things were the same from when the agency signed them. And I think one of the big things is how many potential customers do you turn away? Is the whole fact on, if you don’t think you can get someone results, if you don’t think that their conversion rates high enough, if you don’t think their website’s good enough, if you don’t think their product and the market fit is good enough, let these people know that, like if you’re in that situation, you’d want to hear an agency tell you that.

I don’t think your website’s conversion is good enough. Maybe go away and make these changes and then come back to us and we’ll reassess. Or if you’re looking to bring a product to the market, you’ve got this fantastic idea. You’ve gone and got all the IP secured on it and you go to an agency and they go, “Yeah. We love that idea. It’s going to be amazing”. They’re BS-ing you, what happens when you’ve spent all that time taking that product to market. But the market’s not actually there for the product or the market’s not ready for that product, will your agency say no to you? If they don’t think it’s going to work or are they just going to take your money and run?

Dean Barker:

So if an agency is trying to try to woo you – question number one: Hey, how many of your potential clients do you turn away? Cool. You hear them squirm, get worried. They don’t give you an answer. I get worried. And how many potential clients do we turn away, Dave?

Dave Granfield:

It’d be over 50% of people. Now, that’s been a little bit tricky for us. So I’m going to be completely honest here. We’ve grown the sales team in the last couple of months. There are four people on the sales team, including myself now. Back in the day, it was super easy for me, right? I’m taking referrals of customers who are having a really good time with us. I’m going out to brands that we know who have known me through different areas of my sort of business life are. We’re looking internally through our team for different businesses. And it’s very easy to find customers that’s going to be successful. Now that we’ve kind of turned the heat up on the sales process. We would say no to as many people, as we say yes to the inbound leads that come in, we would say no to a 50% of them because we purely don’t think they’re ready to advertise yet, but we leave them better off for having contacted us.

Right? So we’re going to give them information. We’re going to give them some advice on what they can do. And you know, I’ve kind of always challenged the sales team. If you’re going to have a strategy call that’s agency talk for, we’re going to try and get your business. If you’re going to have a strategy call, with an agency, make sure they can give you at least three pieces of information that leave you better off for having that time spent with them. So 50%, mate that was the answer to your question.

Dean Barker:

What would you say is a worrying percentage.

Dave Granfield:

0%.

Dean Barker:

What about like 10%?

Dave Granfield:

I mean, most of the agency peers that I see, and I’m not talking about anyone in particular, but saying no to 10% of people is like being captain of the B team. In my opinion, there has to be a level of niche about what an agency does, or it has to be a level of ethics about what an agency does. If we’re primarily focused on e-commerce stores, and we only want to run ads for e-commerce stores if a landscape supply business comes across our path, it’s not ethical for us to say yes to them because it’s not our niche. It’s not what we’re good at. Or you’d get those agencies that are Jack of all trade and usually, they’re master of none, right? Is that an answer? 10% is not good. What would you say?

Dean Barker:

Well, I set about 30% in the document. Anything below that is a worry.

Dave Granfield:

So if an agency says no to about 30% of the leads or the sales inquiries that it has, that’s a pretty healthy number that you know, that they have some ethics and morals and they kind of know-how to stick into their lane. Cool. All right. So the second question you had was what is your churn rate Mr. Agency Man?

Dean Barker:

Sounds like that, I don’t like the word churn, it’s let me stomach churns. It sounds like you’re, you’re vomiting up the client.

Dave Granfield:

My stomach churns when I lose a client.

Dean Barker:

Churn rate means, well, when a client churns, they leave, they’re leaving, what’s your leave rate? How many of your clients leave? Bottom line is, if the client leaves, they’re not happy with the agency, for whatever reason, either they weren’t getting the results. Maybe they were getting the results, but the client was unhappy with the communication. Yeah, I guess that’d be the main two reasons. Bottom line, if the client churns, they’re not happy. So when you ask an agency, what’s your churn rate? How many clients have left is going to be a pretty good indication of how good they are!

Dave Granfield:

All right. So I think that we need to go to the next level and let’s discuss what our churn rate is or how we measure our churn rate. And honestly, when Liam and I founded BidPixel, our churn rate statistic was always going to be based on what percentage of our monthly revenue do we lose that month, in clients that offboard or stop working with us. Now, the reasons why a client may stop working with someone – results are always going to be a big thing. If you’re just not getting the results and your spending, more than you’re making, that’s a legitimate reason to turn away from, from spending good money with an agency. One of the other reasons that we’re finding commonly at the moment is lack of communication. People are getting sick of zero communication or not enough communication from their agency or freelancer in the advertising space specifically is what I’m referring to.

They are, they might be getting the results, but if they’re not getting the communication and part of that communication is that expert advice or that expert nudging them to tell them what they could be doing better or what they should do differently. That can be a reason for churning, like not, not communicating with the customer. One of the things that we find often is we’re getting in a crowded space like four or five years ago when we started niching into just Facebook ads. We were one of the only in Australia that said, and put our hand up and said, we only want to be running Facebook ads for people. Now, every man and his dog is running Facebook ads for people now. And we’re finding that we’re not the cheapest in the marketplace. We don’t speak the loudest in the marketplace.

And there is this bright and shiny syndrome where sometimes you will have a churn rate because someone else has sold them on the dream or someone else has sold them on a better result or someone else has come along and offered them additional services for the same fee or there’s a multitude of different ways, right? At the end of the day, it’s churn. If we haven’t delighted customers enough and they choose to leave us that’s fair game, right? If we’re not getting results for a customer fair game, our churn rate, we set the KPI for Jay and your team at 7% each month. So every single month, a maximum of 7% of our revenue can be lost by a customer leaving us. Now, the offset of that, which we can talk about in another episode is how much revenue is gained, but we only ever want to lose 7% of our revenue each month from customers discontinuing working with us. Now, other agencies can be substantially higher, right? There’s one agency coach she’s from New Zealand. I won’t name her name. 

She went to market saying that a 30% churn rate is okay each month in your business, right? So if you’re an agency and you’re losing 30% of your revenue every single month, you’ve got a pretty crappy business model, to be honest, like if you’re losing and having to try and replace 30% of your profit every single month, you’ve got a bad model there.

Dean Barker:

Not to mention, if you are losing 30% of your business. You must be doing a very good job.

Dave Granfield:

Well on this podcast, we do this to appeal to two people, right? People who want to run an agency and people who are looking to run an agency, but also mainly we put it out for our potential customers and our current customers. Right? And you, if you ask a potential agency, what your churn rate is, and they tell you that they’re losing like 30% of their business every month, like what the heck is going on within that agency? Are they not good at what they do? Do they not communicate? Like is the product-market fit for what they’re pitching for, not right? Right. And that’s a really important question. And if someone doesn’t want to answer that…

That’s a pretty big alarming sign for me.

Dean Barker:

So yeah, I guess when we put those two together, if you’ve got an agency that turns away zero clients and has a high churn rate, pretty sure they’ve got a churn-and-burn business model. “Let’s take their money. Don’t care if they leave, because there’s going to be plenty more clients”. If you had an agency who does turn away a lot of potential clients and still has a high churn rate, you know, at least, you know they’re trying , their heart’s in the right spot. They’re trying to only take on the good clients. They’re just not quite getting there with their results just yet. If you got a high percentage of clients you turn away, and a low churn rate, *ahem* Us.  You got an agency which is on the right track.

Dave Granfield:

So a note here that Brofie, our Marketing Manager at BidPixel told us if we’re doing something that you can’t see on the podcast because, we’ve got a camera here recording for our Youtube Episode. If we do something that you can’t see on the camera, we need to tell the podcast what we’re doing. So ching! Like we’re trying to get that one of those little sparkly things on our teeth, like a used car salesman being really cheesy.

Dean Barker:

Yeah. yeah. And it’s gonna look really silly if Brofie actually can’t get those.

Dave Granfield:

Yeah. I’ve got all faith in Ivan and Brofie, that they can put it together. Right. Let’s do it one more time. Just for the camera. Ready? Three, two, one.

Dave Granfield:

Awesome. all right. So.

Extremely good lead magnet. It’s going to be in the description below, so you can just have a read of it. It’s an honest approach to asking an agency if you’re going to be genuinely a good fit for them. Ask me, ask James, ask any of our sales team, talk to three agencies or more before you actually commit to using one, but ask them those two questions simply, and get an understanding of how they do business themselves.

Also mate, changing tact. I want to talk to you about what you are exceptionally good at.

Dean Barker:

There are so many things, Dave. Mountain biking?

Dave Granfield:

Well, let’s not talk about mountain biking today though. Let’s talk about another thing that agencies sometimes do, which I’ve got a personal gripe with, but I want you to educate me on this. So let’s have a talk about Google ads specifically.

Dean:

I believe it’s pronounced Googlé, like Michael Bublé.

Dave Granfield:

Let’s talk about Googlé and specifically search Googlé.

Dean Barker:

LAUGHING: Lets just call it Google. I can’t do this.

Dave Granfield:

Let’s talk about search ads for Google and in particular, branded search campaigns. So a branded search campaign is say we’re BidPixel using the keyword BidPixel writing our ad content for Google ads on a search result for BidPixel. So that when someone types in BidPixel, you get the number one paid position on a Google ad search result. Yay. Or nay. Why? Or please educate me on this.

Dean Barker:

Definitely. Yay. And it’s funny, this is even a question people often do ask why. Why would I run a branded search campaign when I’m gonna probably come up in the organic results anyway when people search for a business name. So from where I sit, there are three main reasons. Mainly you get to choose the message. If you’re relying on your organic results Google’s going to scrape your site according to what people search. You’re going to get a little out of context stuff taken from your website.

Dave Granfield:

So your markup for an organic result to say what you want.

Dean:

Oh, no, not always. I mean, sure. You can put in the metadata as best you can to tweak that as best you can, but it’s not always going to work that way. If people search something that happens to be, you know, in the middle of a paragraph in your site somewhere, Google’s going to get a snippet from that paragraph and it is relevant to what someone’s searching. But they’ll have this little out of context sentence, where it could say anything. You know, it’s kind of taking a bit of a gamble there. When you run paid search ads, you get to choose the exact message. I won’t get into running dynamic ads versus text ads.

Dave Granfield:

Let’s get into it another time. The reason why I’m asking is I’m not a fan of branded search ads and you’ve just contradicted me. So it’s about to be a fight.

Dean:

It’s only one reason out of three.

Dave Granfield:

So the reason one, you can choose what you want to say. It can be seasonal. It can be timely. You can use the wording that you want to use. You can do structured markup. You can put your site links that you want on there. Am I stealing your extra points or? 

So you can portray your business how you want to portray it at that given point of time. Whereas an organic search, I do disagree on you and what content you can write there. Cause you can say what you want there, but, in organic search is somewhat stale, stagnant. You don’t have a hundred percent control on it.

What was the point two?

Dean Barker:

Well, let me jump to point 3, because it’s kind of relevant to what you’re saying. I didn’t even need to say that, did I?. I could’ve just pretended that was point 2. Your organic results are, majority of the time going to be below what you can get with paid results. Yes. so right there, you’re giving away top spot.

Dave Granfield:

But what if you’re one of the top spots?

Dean Barker:

You would hope that you are of course it’s not guaranteed. Especially for super generic business names, like Gold Coast Garden Beds.

Dave Granfield:

Anyhow, if you need a garden bed, by the way, that’s Dean’s side business, I think there’s half naked pictures of him on there. Go check it out. Just trust me.

Dean Barker:

I chose that business name back before I knew anything about Google and optimization and all that SEO, anyone searching Gold Coast Garden Beds. If I didn’t have a branded search campaign, every man and his dog selling garden beds on the gold coast is going to get you know, paid search results. On that space, unless I have an exact match.

Dave Granfield:

Yeah. But you’ve chosen that business name because you wanted the keyword density for organic search results back in the day. Right. And you might be ranking fairly well organically. I get that right. So if you’ve got a fairly generic business name and you are going to have competition, what if your business name is BidPixel, which BidPixel is BID PIXEL by the way not Bid, internal joke, pig schnitzel. We are possibly going to change our name this year. So what if you’re BidPixel, and you’re doing a branded keyword search or branded ad for Bidpixel and there’s only probably one time you’re going to have someone out rank you organically for your brand name like that. And it’s if someone’s actually bidding against your brand name.

Dean Barker:

There’s that and there’s another time when, if someone types “BidPixel Advertising” or  “BidPixel Google Ads”, you know, as soon as “Google ads” or “Facebook ads” are written into the search box. Every agency’s ads are going to be up there unless we are bidding on the keyword “BidPixel” we’re the only one whose URL is gonna match that. We’re the only one whose ad copy is gonna match that and we’re the only one who’s copy on the website is going to match that. So Google is going to see that.

Dave Granfield:

All right. So here’s something that you can explain to me, cause I think I’m getting what you just said, but I want everyone else to understand that is if we just typed in “BidPixel” as a search term and it came up, sure. You might have an ad, but really people call us BidPixel Advertising or BidPixel Marketing. And because it’s that broader search term with the word advertising or the word marketing, that’s when there’s a slip up because every man and his dog is optimizing for those keywords. Right. Perfect, good explanation. What was the second point where if you already said the second one?

Dave Granfield:

Because of course the competition, you never know when the competition is going to bid on your keyword, on your business name as a keyword. And if they’re not doing that already, you want to beat them to it.

Dave Granfield:

Yeah, sure. Have you got any other points to cover on this one?

Dean Barker:

Not on that. 

Dave Granfield:

So what happens if you do have a competitor bidding on your keyword, like BidPixel does get them out there, our competitors bidding against us. What happens if you find that someone else’s bidding against your brand name, look, you can report it to Google. Chances are nothing’s going to happen. A lot of the time, what we see is it just becomes a bidding war, right? Like you’re going to start tussling with someone else and you’ll probably going to start bidding against their business name. And you’re just going to drive the costs up for each other and years ago, honestly, I haven’t done Google ads to the extent that you do Google ads, but years ago I would just encourage customers to literally call up their competitor and have “truths”. Like, I’ll stop bidding against your name. If you stop bidding against my name or wipe the floor clean with them and out bid them all every single time.

Dean Barker:

If you have really generic business names. Yeah. Like probably yeah. If someone tried to out bit us with a BidPixel or a business name that’s not an every day term that you say, they’re not gonna have a chance. Cause like I was saying before, we’re the only ones who can say a BidPixel in our ad copy. No one else is going to say “Better than BidPixel”.

Dave Granfield:

It’s against terms of service. You’re going to have a hell of a time getting into a bidding war with someone. Right. Cause you can’t tell them to stop.

Dean Barker:

No. I’m the only one who will hopefully only have those four words in that sequence, on the ads, on the website. And you know, if someone wanted to be super clever about it and they specifically wanted to design their site and their ads, especially to outbid Gold Coast Garden Beds, they could. Man, Bunnings ads are so great. Anyway, don’t get me started. Yeah. I got a bit off track there. What were we talking about? 

Dave Granfield:

Your go to generic names. So like if you’re BidPixel and someone’s bidding against you, there’s some terms of service breaches there that you can start looking into. But if your business name is Gold Coast Garden Beds, man, I’m going to get you to sponsor this.

This episode is sponsored by Gold Coast Garden Beds. If you want a raised garden bed delivered to your home, filled with dirt and had tomatoes planted in it, Dean’s not your man because he’s full-time working for BidPixel, but you might get his lovely brother Grant to come around and deliver for you. Thanks Gold Coast Garden Beds for sponsoring this episode of Marketing Ear Biscuits.

So if you’ve got a generic business name, yes, there’s potential that it’s going to be easier for a competitor to bid against your business name, outbid your business name. What do you do about it? What’s the smartest way to get around it? And is it impression-share ads? Is it just spending more? What do you do?

Dean Barker:

It’s back to if you have a generic business name right?

Dave Granfield:

If someone is bidding more than you and getting number one and you don’t get number one position…

Dean Barker:

You try impression-share targeting and impression-share bidding which is an automatic bidding strategy. You just tell Google I’m going to pay whatever it takes to get this ad at the top. Or you can choose very top, in the top section or anywhere on the page. Obviously, if you’re having a bidding war with a competitor, you’d choose the very top.

Dave Granfield:

So, but that impression-share, you’re not asking Google to send people to your website. You’re not asking them for leads. You’re not asking them for a specific conversion related event. You’re asking for more impressions and higher impressions.

Dean Barker:

That’s the thing. It can turn out cheaper. Because that’s all you’re asking. You’re not asking them to weed out the high quality active purchases. You’re just saying, Hey, I want this indiscriminately placed at the top.

Dave Granfield:

I want number one at all costs, I’m prepared to spend, like you’re probably going to get it cheaper, but you’ve got more budget than to do it more often, 24 hours a day, that sort of stuff. But is it almost like a bit of a bully method? Like you can bully your way to number one with an impression share and drive the costs up for that competitor, hopefully enough that they give up and stop doing it.

Dave Granfield:

Mm. Unless they’re doing impression-share as well, who knows? Yeah.

Dave Granfield:

Dude stop complicating it, i’m trying to get solutions for people? 

Dave Granfield:

Your strength here is that you are the actual business, you know? No-one can change that. No one else can be you. So put your business name in the ads, put your business name, hopefully a business name is already in your URL. Otherwise, what are you doing? Put your business name on the landing page that you’re directing to Google or see that Google will deem your ad to be much more high quality than the person bidding on your business name that isn’t written in the ad. Isn’t written in the URL and isn’t written anywhere on their website. And you win it that way. And you’ll find, if they were to outbid you, they’d be paying five times more or 10 times more than you are to get your ad in the same spot.

Dave Granfield:

Awesome mate, we’re twenty-five minutes deep into this now. So let’s wrap this one up. Brofie wrote me a note here to say, have a strong call to action at the end of the podcast or the end of the video episode. So Dean, the call to action that I’m going to give them is if you feel like one of your competitors is bidding against your brand name in Google ads, reach out to us, have a chat with Dean you might be one of the 50% of people that we say no to, but reach out and let’s have a chat. And let’s see if Dean can just give you those two or three hints that we said you need to look for when you talk to an agency and see if we can get you out of that situation where you’re spending good money bidding against your own brand name, closing remarks mate?

For those not watching the video. Dean just did the little cheesy car salesman thing again. So Brofie and Ivan can you please put that in one more time? All right. If you like the content, please subscribe. You’ve watched or listened to it this far through now. So you possibly genuinely have an interest in listening to my voice and Dean and James and Jay’s voices.

Subscribe. Hit the little bell notification on Youtube. There should be another little ding there because they’ll edit that in. Have you seen how Youtubers do that? But we’re doing this at the end of it. Right? So if someone’s listened fthis far, hopefully they’ve got value out of this and they’re going to be, Oh I want to hear more. We’re not doing it at the start. 

Done mate, thanks very much. High-five. Thanks, guys we will see you next time.