This is August’s monthly Progress Report for ATTN Agency and I am incredibly pleased with the progress and improvements we have made.
Our goal is simple: Grow the company as fast as possible in 4 years and then sell. This requires additional investment into the branding. We have begun the process by finding designers and quoting their services. Determining how much to spend is proving difficult. if we spend more will get a better ROI?
Through research on how to define our brand mission and vision we’ve learned the benefit of being different and how important it is to be different than it is to be better
I learn and share how a big public company structures their payment, salary, commission, bonus incentives, goal setting and explore how to apply it to our company as we continue to grow.
Lastly, we decided on our core values and I’m thrilled to share them. All the partners had a fun and lengthy discussion about what we wanted each word to be and why.
Reinvest in brand
Some brainstorming…. And voila! We decided it is time to reinvest in our website and branding.
Not being branding guys, it is a little difficult for us to wrap our head around exactly what we need to do and how much to spend.
We smartly decided to track branding tactics employed by other companies. Earlier, I did an ad review of Audible and found the smallest little detail of everything they do, right from their copy, tone, communication style, and coloring, is consistent with their brand.
I met Ryan Berman, author of Return on Courage. He talks a lot about core values, courage and branding. Furthermore, he religiously follows what he preaches! His every action is consistent to his brand. Even his email has coloring, font, messaging, profile and the book consistent with his brand.
I start to recognize the dynamics of branding!!
Going forward, some things concern me -
- A new website to match our branding efforts- We can divert some spend towards building a new website but if the rest of our stuff does not match and the tone is inconsistent, what is the point?
- Is now the right time to invest heavily in our brand? Alternatively, should we wait until we get more clients, more employees? The company tone and messaging will certainly change once we have 10 employees.
- We cannot afford to be cheap on investing in our brand. We need to invest adequately, we need to get everything we need to get the branding for our company done right. I think that is going to take more money than we are comfortable with.
Past experiences with our own projects have taught us that trying to pinch pennies most often leads to regret. We end up spending more time and money to fix problems we created. Hindsight reveals if we had just spent the amount of money that made us a little bit uncomfortable upfront, we would not have had a problem. I hope to avoid that in any decisions that we make with the website and branding. - What is the right budget to allocate to this? Is it $5000, $15000 or $50,000? How do I determine the ROI on these decisions?
I know it is a good and right decision to invest in our brand, but I do not know how much we need to spend to get the ROI that we desire. None of my current clients have mentioned my website, telling me that it was that one click that made them choose me. Nor do I know how many clients or potential prospects have visited my website and decided against hiring me based on what they saw there. - What is my opportunity cost on this website and all the branding that goes along with it? Attracting employees and signing up new clients is really important. People coming to work for us should feel secure, comfortable to leave their jobs in hand and work with us.
- Where, how to and how much to spend? What should be the messaging and tone of our brand? How to define that and how to find the right person for the job? Many components need to be consistent with the brand we envisage.
Being Different is better than being better
Return on Courage by Ryan Berman, briefly talks about being different and how important being different is than being better. A quote by Canter Brown, found in this book, says,
"Brands that are felt to be positively unique and setting trends in their category have grown much more dramatically by an average of 124% than those that have been less successful at 24%."
Another quote from the same book says,
"The Stengel 50 shows a connection between brands differentiating themselves by serving a higher purpose and lucrative returns delivered back to stakeholders. Monitoring the financial performance of these companies over a 10 year period, the Stengel 50 was 400% more profitable than the average S&P 500."
It is all related to being different. In my own way, this is what I am trying to do, especially with the videos about our growth, how we are going to structure it, and other behind the scene details of our functioning - being different!
Along with videos talking about all the things we are doing or in the pipeline, I also plan to start recording all the meetings between me and my partners, disclosing the nonsensitive proprietary information. All our fireside chats, over beers, would be fun to disclose and share. Conversations about how we are going to scale our business, the special decisions we make, the care we take towards hiring employees or structuring our systems, and all the things that we are doing to make the business efficient and successful. Also, the way we prospect and find new clients is very different. No one is doing things the way we are.
I aim for transparency in the way we run our business and wish to build trust with everyone associating with us.
Return on Courage also mentions purpose elasticity, that is, the purpose of a brand and can it stretch into the growth of the brand? Basically, this means that if our company expands into a creative side where we are making video ads, gifs, imagery, email design and construction, can our purpose and our brand stretch into that? We have to define returns, improving ROI, taking marketing experience and brand imagery to the next level, how to grow our company into that, and see if our purpose can expand into all that.
My ultimate goal is to expand into creative with an in-house direct response team. They will make direct response ads on Facebook, as and when we want them. My creative should expand into email so we can not only build funnels for clients but write, design and publish those for the clients making it seamless and fully automated. I would also like to get into the SEO side where we offer a comprehensive content structure for companies and sell SEO services at scale to everyone. We have a great list of clients and we can just add to the services we give them making it all in-house.
Branding, brand construction and development, identity creation, tone for companies that are either new or established, and rebranding, is an avenue that we could expand into. Web development, web design with all things related to conversion optimization, upsell and conversion paths, etc is another avenue to think about as we have good knowledge and some experience at it.
Saas company growth and payment structure
I am always very curious to know many things about big companies. Some questions are -
- How do they set goals?
- How do they meet their goals?
- How do they pay their employees?
- How do they bonus people?
- Do they commission people?
- What are their salary ratios to OT?
- Is it mostly commission? Or is it mostly salary, or 50/50, or whatever?
A good friend of mine, employed in OCTA, enlightened me about some points.
Stretch Goals: I came to know of stretch goals. This is the market goal, which is what you need to hit. In order to meet massive growth goals, we need to achieve stretch goals. Apparently, the company only focuses on stretch goals. They have bonus systems set up. The bonuses are daily, weekly or monthly and are tied to the stretch goals. Managers are incentivized to help people hit their goals. SDRs are incentivized to try and hit the stretch goals too.
They set an overall goal for sales and growth, and everyone benefits from it. It is never about personal goals, but about company goals. If company goals are hit, everyone gets a bonus.
Bonus Payout: That bonus is paid out at a 5% rate above whatever the goals are, so if they get in excess of their stretch goal, or they hit the stretch goal, everyone in the company would split a 5% payout. This percentage can vary as per discretion. How amazing is that! If you hit growth goals or stretch goals, the whole company will split a big sales number. This will promote camaraderie and shoulder people who are not performing well that quarter. Wow!!
Managers, senior managers and directors are paid out on hitting the stretch goal. The SDRs or true employees are not given bonus on hitting stretch goals. They are given spiffs, which are weekly, short-term goals that lead to strength goals. These goals are set by managers and directors to help keep people incentivized throughout the process.
Incentives: Sometimes daily, weekly, monthly or quarterly goals are set. Incentives offered here could include a nice pullover jacket or $1,000 cash. The budgeted amount for these spiffs is $250 per person, per quarter. A manager can decide to have one payout for the whole quarter at $250 per person, to the top five people. Alternatively, they could take that $250 per person, and they could set it for every week throughout the quarter.
The thing is not everybody is going to hit those goals. It is an incentive. A few employees could continually win over and over. They continually hit the goals and get those spiffs, but it does not mean the other people will not be incentivized. It is an extra, fun incentive for somebody who wins, to continue to try and win. That can be a part of the culture of the company.
At OCTA, salary represents 60% of pay. The remaining 40% is commission, or in this case, bonuses. They do not do commission, only specific bonuses. You either get the bonus for hitting your stretch goals or your numbers, or you do not get anything.
If a sales manager and his SDRs want to get their bonus, it is represented in 50% of two ways. It is either setting meetings, and then closed opportunities, and each of those two things represent 50% of their bonus. So, in their specific goals, they have to set 12 meetings, and there have to be 7 opportunities closed from those 7 meetings. So if they close 7 deals, but they only get 10 meetings, they don't get their full bonus, because they did not hit both sides of the opportunities.
This caught my attention. I realized we have to try and figure out how we are going to get bonuses set up for our buyers, and there could be different elements to the bonus to incentivize buyers.
The reason that the bonuses and meeting closings are scheduled that way is all based on the manager's goal. For example, the target is $50 million in new business developed, and they have 100 SDRs under them. Each person has to bring in 7 meetings a week, to a month, to close 20% of those.
****They close from opportunity phone calls or meetings initially, to closed opportunities is at 58%, so that's 12 opened opportunities, to 7 closed opportunities, and then of those 7, they close 20%. So that's the math where they get to the point where they're at 12 meetings to close 7 opportunities and get two deals done. That's what's going to get the manager to his stretch goal. It all starts and it's all reverse engineered. Right? They look at the goal they want to be at, all the way down to how many meetings they have to get, which is really cool, and we've talked about, in a previous video, that we need to figure out all that kind of stuff for us as well.****
Accelerator: This is also interesting. If somebody surpasses 100% of their goal, then they go into accelerators. Here they are not only given the bonus and paid even more money, on top of the opportunity to get the 5% with the company. The reason being if they go above and beyond their targets, but the company does not hit the number and they do not get the 5% bonus, they still get more money. This continues to incentivize these people to not keep working.
Ramp Months: A very structured onboarding practice is called ramp months. For example, in our 3 year goal, we need to close more business in year 3 than we are in year one. Assume our growth plan, equal across all months, was $250,000 every month, unachievable right now, but it should be $300,000 a month two years from now. So we are in a ramp period, onboarding a new account, which may or may not materialize.
Ramp months can apply to media buying and sales as well. Heavy optimization changes require time and move slowly, experiencing ramp months.
Usually, in the first month, 2 meetings have to be set as opposed to 12. In the second month, 6 meetings are set and 3 deals closed, about half of the minimums. In the third month, 12 meetings are set and 5 of them need to turn into opportunities. By the fourth month, everything is ironed out and set up.
Friday Meetings: Every Friday, founders meet with the entire company. Information on all company related matters is shared. It is a great way to connect all people in the company and have everyone understand that they are part of something big, succeeding on many levels, with a secure career ahead of them.
All the above actions promote employee happiness and loyalty. Good leadership, role models, company vision and opportunity to make good money, inspired employee loyalty.
I hope to emulate a major part of all the actions of OCTA :).
Core Values
- Being Innovative: From the way that we prospect, find and sign new business to the ways that we optimize our ad campaigns and budget, the way we run discounts, best software that we spend so much money on to make sure that our clients get the best return possible - are all unique and innovative. Our handling of data, the way we turn little opportunities into big opportunities is very innovative. The videos I make about the behind the scenes, good and bad struggles of growing this agency are innovative as well. It gives us a chance to bond with the people that are interested in our company and they understand who we are very quickly. Being Innovative is truly our core value.
- Committed: My team and I are all very committed to the success of our business and the success of our clients. We are consistently committed to the day to day, ins and outs of running accounts. This is an important core value for a digital marketing agency.
- Confident: Confidence, not arrogance, is an important core value we have. We are confident in what we do. Our clients see and feel our confidence on a daily basis with the way we communicate with them, the strategies we suggest, the budget increases we suggest, the creatives we want to use and our knowledge base in general.
Our confidence improves our positive attitude and boosts our energy levels.This comes from being knowledgeable and prepared and it reflects in our overall work attitude.
- Collaborative: Collaboration and communication with one another, on a daily basis, is needed to perform well. Leveraging information enables us to scale our efforts in the most efficient way. This knowledge share has helped us succeed.
- Passionate: Passion to learn something new through blogs, podcasts, educational videos, conferences, is always required. You need passion to perform well on ads, have a burning desire to know everything about digital marketing and all the changes that are being made and where the future is. If we get into creative services, we need passion and drive to succeed.We will always look for passion when we hire and it is an integral core value to us.
Each one of our core values have purpose elasticity, meaning that as the company grows, the core values can grow with it. We're not confined by narrow vision core values that are very specific. Our core values are values that people can hold themselves accountable to.