This episode of The Morning Kick has Andrew Pitchford talking with one of the best agency consultants, Karl Sakas.
Weโve been able to learn from Karl and he has been a constant resource of management advice that suits the agency owner and many in professional services.
We know you will gain insights from Karlโs experience.
Interview Transcript
Andrew Pitchford:
All good morning โkickstersโ and welcome back to the morning kick. And Iโm so excited that we have a special guest coming in from the U S of A, he got a dispensation from the president and so it must be important, lets welcome in Karl Sakas. Karl, thank you very much for joining us on the morning kick. And youโve been involved in a lot of work with professional services agencies and youโre a speaker, but weโre really excited to talk to you about what the road ahead is with COVID. But, youโve come from North Carolina, a place called Raleigh, and then thatโs a very famous Englishman was involved there. So whatโs the connection?
Karl Sakas:
Uh, itโs named after Sir Walter Raleigh, uh, though the, you know, fun fact, he never actually visited the city of Raleigh himself before he died.
Andrew Pitchford:
So thereโs no recommendations on the tourism website from Sir Walter on this occasion?
Karl Sakas:
I donโt believe so. Uh, and if it were, it, it, you know, I would, I would wonder.
Andrew Pitchford:
So weโre, weโre popping outside of your virtual U.S. bubble to have a chat to you about whatโs happening in the road ahead andโฆ Karl, youโre advising a lot of people in the agency land, people who are creators, running organisations with professional services. But I think a lot of what you have to offer applies right across the sector and to other areas, people that are dealing with people, dealing with organisations that provide services. Iโm excited to find out your thoughts, letโs lead in with a conversation about where you think the pathways to the future might lie. I understand youโve got a framework that may give us four possible options?
Karl Sakas:
Yes. Uh, so, you know, of course as to where things are going, no one knows for sure, but we can draw some conclusions based on various inputs. Um, you know, in my work, my focus is as a consultant is helping agencies, but I also run a CMO, Chief Marketing Officer, mastermind group. So these are brand side CMOs. So Iโve perspectives from agency owners as well as CMOs. You, you know, potential clients and others. Uh, you know, as I speak with people asking, you know, whatโs the turnaround timeline theyโre expecting in their business? Iโm seeing everything from businesses bigger than before to people expecting 12+ months for the turnaround. Uh, you know, as one of the CMOs said, uh, in the recent session, uh, you know, itโs not, weโre not dealing with one pandemic. Weโve got tens of thousands of pandemics, different people having different experiences.
Andrew Pitchford:
Yeah. The variety thatโs out there is definitely effecting people and industry in different ways. And I think probably an interesting aspect of whatโs been happening with the pandemic is that we as individuals, which includes leaders, CMOs, business owners, weโre responding in different ways as well. So if we can do charter path out and hey, letโs use Sir Walter Raleigh is an example. There is somebody who was able to sail all the seven seas and had to look to the stars to find his way in his boat. What does a business owner do? What are some of the ways in which we can look for a pathway?
Karl Sakas:
Well, I would start by looking at when you expect your customers to come back. Now, if youโre a professional services firm in a sense, youโre often dependent on when your clientโs customers come back. So youโre a little bit, a little bit further downstream. But ultimately, if you think about when the underlying customers will combat for your unique business, there are four possibilities here. Uh, and think of it in terms of when demand will return, demand in terms of people spending money or wanting to spend money with you first. And this is sort of the most unfortunate is if it is demand destroyed, that is due to the pandemic and due to, um, you know, economic shifts since then and pending now, uh, the money that people mightโve spent, theyโre just never going to spend it.
Karl Sakas:
Uh, thatโs often applicable and services businesses, uh, for instance, you know, uh, when you need to get a haircut, you only get one haircut and youโre back back in business, youโre not going to go back and make up for the ones you didnโt get. Youโre also probably not going to make up for going out to eat. Uh, or if you know, youโre thinking of getting a new seasonal outfit and the season passes and you donโt buy it, youโre never going to buy it. So thatโs demand destroyed. So if, if you look at your customer base or if you have clients looking at their customer base, itโs a demand destroyed, the timeline for you is probably going to be on the longer side for recovery. The next category is demand deferred. So if youโre deferring the demand, itโs going to happen eventually, not quite as soon, but itโll happen eventually.
Karl Sakas:
You could look at this, for instance, in home appliances or cars, you know, if you need a new dishwasher, youโre probably eventually going to buy a new dishwasher. You might wait a month, you might wait a couple months. But the dishwashers that the manufacturers have in inventory and that are out in the stores, youโre eventually going to buy one of those, uh, or buy it online. You know, thatโs demand deferred. Uh, so in that case, if your customer demands mostly demand deferred, youโre going to be a bit faster or potentially much faster than demand is destroyed. The third category I call demand unchanged. Demand unchanged is businesses pretty much going as it was before, uh, before the COVID-19 pandemic, before the economic hits. Um, you know, I have a number of agencies I work with who report the businesses just as busy as usual, if not more so.
Karl Sakas:
So thatโs demand unchanged. And that case, when it comes to recovery, um, youโre not really worried about recovery because thereโs never been a drop or not much of a drop. The one catch of course is that depending on the demand youโre getting now, will that demand continue over time? Thatโs demand unchanged. Weโve got demand destroyed, demand deferred demand unchanged. And then thereโs a, thereโs a fourth category which I call demand created. This is demand for things that didnโt exist before. For instance, I have a client whose agency does e-commerce work and one of their clients sells camping, food freeze dried, you know, non-perishable shelf stable food. And after one of the major announcements in the U.S. at the end of February, uh, from the centers for disease control about, you know, itโs not a question of if, but when their inventory sold out within a few days and they actually shut down eCommerce sales because they had no more product to sell.
Karl Sakas:
So in that case that was demand created. Now will it last forever? Probably not. In another case, a client had a prospective client that sells jigsaw puzzles and they were talking about potentially doing marketing to help with that. The client was like, we do not need any marketing help sell in the jigsaw puzzles. They are selling themselves. Uh, so, you know, you could also look at say masks, uh, video conferencing. Here we are. Um, you know, thatโs demand created. So if you, if you think about which of those four categories most apply to your customers or your clients, customers, if youโre working through others, thatโll give you an idea of the relative timeline. If most of it is demand destroyed, itโs going to be a longer timeline. If itโs demand created, businesses is better now than it has been before.
Andrew Pitchford:
Karl, when you look at that type of scenario, I can see a picture in like your eCommerce client where they run out of all of the pre-packaged astronaut ice cream and then that is a short period of time and then theyโve got to look at what maybe the next announcement is when theyโre going to have replenished stock. This sounds to me like itโs almost like we need to accept that we are navigating through a storm and this is not a time for the captain to be below decks. Youโve got to be on deck, youโve got to have your hand on the tiller, willing to make adjustments. Is it fair to say that weโre going to be in there for at least six to 12 months?
Karl Sakas:
I would imagine so. Some people might get through it sooner, others might be longer. Um, you know, looking on the client side of things, uh, in the CMO mastermind group that, you know, in the past day or so, um, some of the organizations weโre seeing a surge in demand. For instance, a company selling point of sale technology, you know, and the idea of being able to do touchless payments and uh, contactless delivery, you know, thatโs doing great. Uh, on the other hand, an organisation that does in-person leadership development training, you know, huge part of their business disappeared overnight. Um, and so some of that will depend on the organization. Um, and, and of course we donโt know exactly where things are going to go. Uh, but we will see some variation. Um, six to 12 months is a fair assumption. Uh, as I am serving CMOs and agency leaders, Iโm hearing everywhere from things refined to 12 plus months. I will say among the agencies I surveyed recently, uh, doing an office hours Q and A, the maximum time for people thinking things would turn around was six months. I give different options. People voted in the poll when it comes to the CMOs. When I asked effectively the same question, uh, they, some, you know, it was in good shape, but there were people there were saying 12+ months, uh, or more, more, more than 12 months. Soโฆ thereโs going to be a disconnect.
Andrew Pitchford:
And itโs interesting just hearing that whether there is disconnect between the person who is a business owner, possibly heโd been a little bit more optimistic about how they can recover and the person working for the business owner or working for the business is taking a more conservative approach. Iโm not sure how long itโs going to take us to come out of this. We need to plan a little bit more long term. So I guess weโve got to take that on board. I think another interesting aspect that Iโm picking up on is that in terms of some industries, whether it be professional services or even companies such as ourselves, Excite Media, the ability to respond is probably going to be based on your visibility and your place in the market before COVID hit. Because I think thereโs going to be a sense from people buying from suppliers, buying from providers that theyโre going to want to work with people that they can see, that they know are going to last into the future. And so those choices are going to mean that even within one industry, there are those that will take no time to recover or are going to have that created demand that you speak about and thereโs going to be those that are actually going to lose demand simply because they didnโt have visibility any longer.
Karl Sakas:
Absolutely. And thinking of visibility, I mean the, the simplest test for that would be look at your website. Imagine that you were a prospective client or customer and your baseline question is, are they still open? You know, are they accepting new clients right now? If you canโt easily answer that, if for instance, your website doesnโt say anything about covert 19 youโre behind, I would fix that. Theyโre going to wonder, you know, if youโre still in business, especially if you havenโt updated your blog or other content, if you have an active blog, uh, you know, if your last blog post was six months ago and you say nothing about COVID-19, theyโre going to wonder if youโre still in business and they were going to go to one of your competitors instead, not likely to stick around.
Andrew Pitchford:
So true. In terms of looking to the road ahead, have you sorted out or worked with those CMOs to say, hereโs a series of steps that you can proactively do? Weโve just talked about the website, but thereโs, thereโs something on the bigger side of resetting goals. Um, here in Queensland, Australia, we even had our State government recently announced that this year theyโre not giving us a State based budget. Theyโre basically saying, hereโs the information we can give you. This is how fluid things are. Weโre going to you a little bit of a state of the nation, but essentially weโre just going to have to ride through this and the budget will come on the other side.
Karl Sakas:
Wow. Uh, that, thatโs, I mean, thatโs a challenging situation but also not surprising given given the circumstances. Uh, some of the things that I was discussing with the CMOs, the chief marking officers, a few few themes, uh, one was the idea that theyโre seeing their customers do what several of the CMOs referred to as shock and pause. That is customers are shocked. And this is in terms of your sales conversations, especially true for professional services. Customers are shocked and they have paused the whole process. Theyโre like, weโve got other priorities. Canโt talk right now, you know, get back to us later. And of course the question becomes, how do you restart it? I would say you restart it when theyโre ready.
Karl Sakas:
You know, you keep being helpful, you provide helpful information, different resources. People arenโt going to buy from you until theyโre ready. But staying top of mind, you know, if you were the professional services firm that has been sharing useful information to help your clients navigate things as, as much as we can, theyโre going to remember you for that rather than remember your pushy salesperson. Uh, so I, I would say, you know, be visible, be helpful. Uh, some of the themes that came up was about power of content. Uh, particular in, in doing live streams. Uh, one of the, one of the CMOs mentioned, uh, that theyโve started doing, uh, moderated interviews with their subject matter experts at their professional firm, uh, sharing about what their target market cares about. Uh, normally they might get 300 to 400 comments on LinkedIn in a month for across all their articles.
Karl Sakas:
And what they were finding was that doing these interviews in an hour instead of 300 to 400 in a month, they were getting 500 to 1,500 in one hour. Incredible irritable. Yeah. And they noted, you know, you donโt have to overproduce it. I, I, I, I have to say, I, youโre doing a great job on this, uh, you know, in terms of the quality, but you know, if for people who are listening, youโre like, Whoa, I mean, Andrew does an amazing job. I donโt know if I could do all of that. Well, maybe they should hire you to do it, but, uh, then, uh, you know, doing it is the important thing. Um, and, and getting it out there and trying things, you know, of course, if you donโt like video, then donโt, donโt do video. Um, another theme beyond content, people were talking about account based marketing, ABM, uh, looking to reach out to individual targets.
Karl Sakas:
Uh, and you know, that that seems to be a hot topic among CMOs as a way to sort of hone in on specific opportunities. Obviously that depends on your target market. You know, if you are going after everyone, uh, account based marketing doesnโt really work. If youโre focused on a more narrow niche and youโre good at what you do and you can share that. Um, I would, you know, Iโm certainly focused there. Um, you know, people are talking a bit also about the role of purpose. You know, what is the purpose of your business, um, and how can you connect that with your perspective clients. Um, and the one, one more thing that came up, uh, which was around the owner or the CEOโs sense of urgency. And thereโs a bit of a struggle between the CMOs as the marketers and the CEOs where the CEO is often freaking out and, uh, reasonably so and saying, you know, weโve got to do a hard sell.
Karl Sakas:
Weโve got to get the word out. Like weโve got to better get the numbers up. And you know, that doesnโt need to happen, but pushing harder isnโt going to make it happen faster, you know, in, in, in the current circumstances and for some time in the future. And so in this case, you know, if, if, if youโre listening as a marketer, um, think about, um, you know, where do you need to push back? And if you are an owner or in a CEO or President role or Managing Director role way, um, what is the long term impact on your company and your brand perception? You know, if youโre doing hard sells when no oneโs ready for it, theyโre going to remember that and thatโs, and theyโre not going to remember it in a good way. So you need to find the right balance for you.
Andrew Pitchford:
Itโs interesting, we started off the conversation talking about the, the man who you give credit for, the name of Raleigh and North Carolina. Sir Walter Raleigh and Salesmen has to respond to the wind. Thereโs no blowing into that sale yourself. Youโre not going to make that happen. So youโve certainly got to have a sense on the temperature. And as Iโve mentioned in one of the other shows, a Master and Commander, a Russell Crowe movie that was absolutely brilliant and showed that a salesman has two types of life. One, youโre in the storm and you have to go with their particular situation and you have to steer your boat to catch the wind at the others at time, there is no wind. You are on the doldrums and youโve got to find other things to do to prepare for when the wind will finally come around. Maybe a short time, maybe a long time, but make sure you boat ready, people ready, crew ready. Theyโre all in good health. Letโs talk about the people within the professional services. Many of them would have been sitting on the edge wondering what happens next? Will I lose my job? Am I part of events and hospitality where as destroyed demand or are we actually going to have to knuckle down and work harder than weโve ever worked before? How do you guide your staff through those conversations?
Karl Sakas:
I would start by being transparent, you know, um, donโt hide whatโs going on. I mean, everyone knows whatโs going on. Um, in terms of sharing from a financials perspective, you have to decide what best fits your culture. Um, you know, if youโre doing open book accounting, thatโs scary when things arenโt going well. But hereโs the thing I found, you know, particularly focused on agencies, but it applies to other businesses as well. You know, your team appreciates knowing whatโs going on. Uh, and they appreciate your being honest. Even if youโre not sharing great news, um, you know, they know itโs true. And so then, then when you ask them to make sacrifices or ask them to, you know, to step up in new way is they know that youโve been transparent with them rather than trying to hide things. So you have to go with what works for your company culture and for your personality.
Karl Sakas:
Um, but in general, now is a time to over communicate more than ever. Um, and I have had situations as Iโm speaking with agency owners, you know, some have considered layoffs or have done layoffs. Others are doing compensation reduction, salary reductions. If you do that, ideally the leadership team more than the frontline employees, percentage wise from A, you know, an optics perspective and morale perspective. In one case, uh, agency owner announced to the team that they were going to need to do cuts, uh, in this case, a 20% salary cut. And one of the team members, one of the commission salespeople actually volunteered to take a bigger cut if needed. Heโs like, I know Iโm getting the commissions. I know, I know weโre struggling, weโre trying to do our best, you know, if you need me to, Iโll, Iโll do it. And the owner declined. But I mean, thatโs quite something.
Karl Sakas:
And, and you know, going back to the point about the work youโve done before the crisis still, you know, that thatโs still there. The work youโve done to build relationships with your team, to build their trust, to show that, that they care, uh, that well that you care about them and, and hopefully they care about your business. Youโve built all this Goodwill and, and if you havenโt, it may be too late. Thereโs a model that I use from a book called the human brand and itโs about this idea from the human brand by Chris Malone and Susan Fisk in the human brand. They talk about the idea of warmth and competence and it gives you a framework for thinking about how you interact with your clients or customers and also as a manager how you interact with your team. And the idea is that ideally youโre high warmth and high competence, but a lot of people struggle on those.
Karl Sakas:
And the idea there is, you know, competence is did you get the job done, did you complete what you said you would do on time, you know, on budget, on scope, that kind of thing. And thatโs sort of a baseline thing. You know, a lot of professional services firms focus on like we do great quality work and itโs, you know, done on time and weโre competent. Thatโs kind of a baseline thing. When your clients expect that as a basic thing and hiring your firm, I mean especially professional, they expect you to be a professional. Competence should be assumed. Work though is where a lot of firms struggle and warmth is ultimately are you making clients feel special? Are you making your employees feel special? One of my grandfathers was a business professor for 40-some years focusing on what we would now call organisational behavior and was working with really big companies like General Electric, Nestle, Tata Group and others. And what he found in his research was that employees said, and I was reading some of his work from the 1950sโฆ they wished that their manager or their supervisor would treat them as a person, not just a worker. That was a long time ago. Yet how many companies still struggle with that? So the more you can do to build your teamโs loyalty with within reason, uh, the better results youโll get. At least thatโs how I choose to operate. And I like helping agencies who believe that too.
Andrew Pitchford:
Karl, I think thatโs great advice. And interesting thing, I was just talking to somebody recently and there was two companies involved. One company had been regularly communicating with his staff. There was staff meetings that were zoom meetings. There were emails going out. Everybody was fully informed. Yeah. And they were actually writing this out very well. Another organisation who was an services to the community, they had an email communication about six or eight weeks ago saying this is whatโs hitting us hope that you do well and theyโve only just had another email. This is six weeks later. Oh. Basically saying this is whatโs happening. And by the way, if you donโt comply, there will be consequencesโฆ
Karl Sakas:
Imagine you write that type of email.
Andrew Pitchford:
You can imagine that youโve got two ways in which companies are dealing with, and I think it comes back to what you said earlier, the culture of the organisation is whatโs coming out. And I think thereโs an old adage, pressure amplifies and with thinking, weโve got organizations that are going to ride this out and come successfully and going to have their team fully on board. And there are those that are going to have to do a little bit of um, as Zig Ziglar would say it, a checkup from the neck up and have a look at themselves in the mirror and sorted out. So weโll see who rides this well.
Karl Sakas:
We all need outside perspective. You know, I, I as a consultant and a coach, I have my own, I have several uh, in, in different different specialties. We all need outside perspective and you know what, you can get some of that perspective from your team if youโre willing to ask and youโre willing to listen. Iโve certainly met a number of people who donโt want that kind of feedback. Um, but you know, people want to help be open to that help if you want to get better.
Andrew Pitchford:
Karl, I would like to point people to your website and for them to be able to see a little bit of what they can get from the Karl Sakas experience. And if you go to Sakas and Company dot com Iโll just very quickly bring that banner back up that we had earlier. Makes it a little bit easier to see. Here we go. Yep. And company. Brilliant. Thank you. Thank you. One of the things that really stood out to me, Karl, was when you get a quote from Jay Baer on your website, JB, a great author from Convince and Convert, but describing Karl as the Dr Phil of agency owners and managers, one part confidante, the other part ass kicker. So there you go. This kind of, I think thatโs the objective that we all want somebody that we can trust and somebody that we can trust to tell us the truth, which is a great summary. That comes from what Jay was saying. I also noticed that youโve got COVID-19 resources and that you can come to your website and find out more. Youโve got a series of events, youโve got things happening. What can we find out on the website in regards to our current situation?
Karl Sakas:
Well, if you know, I would start with the COVID-19 resources right there at the top. You know, the page you have up. Uh, I am updating that on a regular basis. Um, you know, just updated that the other day, uh, with events, both three events and, and online trainings as well. Um, checklist of priorities. Advice by topic, uh, and also answers to more than 50 frequently asked questions Iโve received from agency leaders and owners. Uh, and as I get more questions, I keep adding them to the list. Uh, and for some of those I also then have been expanding them into articles. Uh, and you know, if you need help, I, I saw, I saw a note recently about, uh, sort of lightweight resource pages. My COVID-19 resource page is approaching 5,000 words. Itโs pretty in depth and you know, and Iโm regularly updating it.
Karl Sakas:
Um, you know, and, and I also look for other ways to help people. For instance, uh, you know, once a month I do a clientโs only office hours. Itโs a free Q&A call. Uh, and I also do one for the public once a month. Uh, and the idea there is that, you know, people, people need help. Uh, I want, I want ways to help people. Uh, and so, um, you know, I expect to be doing a version of this helping agencies for another 30 years or so. Uh, Iโve a very long term perspective. Uh, you know, Iโve been volunteering in different ways since elementary school and so, you know, of course, professionally as a consultant, coach and trainer for agencies around profitable growth and finding ways to take yourself out of the day to day. Um, you know, that obviously is on a paid basis. But I think my long time volunteer experience through boy Scouts, Four H and other programs, um, you know, itโs important for me to find ways to help.
Karl Sakas:
Uh, and the resource page and the free, the free events and some of the other events. Um, oral part of that. I also have hundreds of articles on the website, you know, under, under blog. Uh, itโs almost to the point that where Iโm speaking with a client, theyโre like, Iโm trying to figure it out. Or do you have an article about such and such? And you know, I almost always do.
Andrew Pitchford:
Well, itโs been absolutely brilliant having you on the show. Thank you very much for spending time with the Morning Kick and being able to share your wisdom. Weโll look forward to catching up with you again, Karl Sakas. Thank you very much for being with us. And, uh, we going to be back next week on Tuesday with more people that can give you advice for your business and with Karl, I hope that we will be able to book you again in the future and maybe be talking about what the road is looking like over the other side of the hill. That will be fantastic, wouldnโt it?
Karl Sakas:
Iโd love to. Would love to. Thanks Andrew.
Andrew Pitchford:
Well, there you go. Another episode of the Morning Kick and has been a privilege to bring it to you. Please share, and make sure that you get it out to your friends that are in business so that they too can basically pass on some good news, some good resources, and make sure that we all come out the other side smiling.
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