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Marketing Agency Exposed Podcast

Aug 5, 2020


Having an awesome project management system in place is just the beginning- there also have to be processes in place to track every bit of work that your company is doing for it’s clients. You can have all the tools you want, but if no one uses them or people HATE to use them, they won’t ultimately work. Creating an incredible product for your clients that is also profitable for your business means knowing who’s doing what work, how long they’re taking, and staying in a budget. What good is it knowing that a project took 30 extra hours if you don’t find out until 3 weeks later? Today’s we share our thoughts on the systems and processes that we use to ensure our own profitability. 


Top 3 Curtain Pulls in this episode: 

  1. Ultimately, tracking hours isn’t about holding people accountable for every moment of their day, but being able to have a realistic view of project health- which means a more accurate picture of your REAL profitability. 
  2. Providing accurate estimates for your clients is an uphill battle, with scope creep being the biggest challenge. Use data to scope and productize your service offerings. 
  3. Pro Tip: Don’t start working on a project until you have everything you need from a client! Work towards acquiring the information you need as early in the project as possible. Consider building packages that have this discovery time built into the services you’re offering. 


Resources Mentioned: 

  • Basecamp 3: Project Management software used by Metacake for every client- includes time tracking option for each task on a project. You can try it free for 30 days!
  • Asana: Project Management software that allows you to track, manage, and connect projects across multiple teams. 
  • Accelo: Project Management software that allows you to gain visibility across your client database, improve processes and spend more time on your expertise. 


For more tips, discussion, and behind the scenes:


About The Guys: 

Bob Hutchins: Founder of BuzzPlant, a digital agency that he ran from from 2000 -2017. He is also the author of 3 books. More on Bob: 

Brad Ayres: Founder of Anthem Republic, an award-winning ad agency. Brad’s knowledge has led some of the biggest brands in the world. Originally from Detroit, Brad is an OG in the ad agency world and has the wisdom and scars to prove it. Currently that knowledge is being applied to his boutique agency. More on Brad:

Ken Ott: Co-Founder and Chief Growth Rebel of Metacake, an Ecommerce Growth Team for some of the world’s most influential brands with a mission to Grow Brands That Matter. Ken is also an author, speaker, and was nominated for an Emmy for his acting on the Metacake Youtube Channel (not really). More on Ken: 


Show Notes:

[1:59] Bob introduces this week’s episode. We’re continuing to talk about profitability, because as an agency owner it’s SO important know how you’re making money. 

[2:45] Ken talks about how difficult it is to manage profitability. 

  • Last episode we talked about how the tendency is to have a $100K per head revenue expectation- how do you grow that? Let’s talk about what we’ve done to attack that problem and create solutions for ourselves. 

[4:04] Brad speaks about a challenge he’s experienced- estimates are based on the hours that an employee spends on a project, and that can be difficult to track. 

  • Ken responds that the idea of being able to track every minute of someone’s day is an illusion
  • Bob adds that it gets more and more difficult as a team grows

[5:33] Brad shares about his experience in tracking billable hours back before the internet took over everything- time sheets were a pain in the butt but then there was new software that got rid of timesheets. Employees hated this because it resulted in micromanagement, and there was huge pushback.

  • As time has gone on, he realized that “it’s more important to be able to estimate projects to be able to allow enough padding so that you can spend a little extra time and your team can spend extra time when it’s necessary…” Be aware that 90% of the time, you’ll probably go over budget and take that into account with estimates. 

[10:03] Bob asks if Brad has a formula for this- Brad says he always adds between 10 and 30% onto a project to allow for extra work. 

  • They break projects down by resources it will take, then break the hours down from each resource… all expenses are taken into account. This is a top-down method of estimating. 
  • Then he also looks at it from a bottom-up perspective. How long will the project be, how many people will be on the account, how much of their time will be spent? 

[11:39] Brad: “The biggest challenge that we have is not estimating, but scope creep… it’s allowing the client to have flexibility but at the same time making sure that projects don’t go on for too long…” 

[14:50] Ken stresses the importance of using technology or software that people will actually use and that is user-friendly. The more psychological barriers a person has about using a specific software, the less accurate your numbers are going to be. 

[15:40] Brad talks about how often hours aren’t tracked in real time, which can lead to a real discontinuity in billing clients. In the past, when time cards were the most popular way to track hours, this was an enormous problem that agencies often wouldn’t find out about until the project was over. 

  • The method of billing the client adds further complexity to the process of tracking hours- the billing method and payment schedule has to be conducive to realistically tracking work that is being done. 

[17:30] Ken: “Billing that way doesn’t work… the worst of both worlds for both sides, right? You don’t know as an agency what your income is going to be, and as a client you can’t project what your bill’s going to be. And so it’s a hard expectation to manage.” 

[19:33] Ken shares that Metacke uses Basecamp3 to track and manage projects. It has a built-in timer that you activate, then make notes of how you used that time and log those hours, and you’re done. 

  • This has created huge value for Metacake, as now they can track hours in real time. Knowing that you went 5 hours over on a project doesn’t matter if you find out 2 weeks later. But knowing right when it’s happening allows you to manage things much more easily. 
  • Of course, the truth is that time tracking is a huge beast. It’s subject to human error, but we can do our best to make it easier and more accurate.

[21:55] Bob talks about how this accurate information feeds into having more open dialogues with your clients- the client can be very clear on what the hours are and what they’re paying for. 

[22:55] Brad shares that his company has run into problems before where they have no real scope for a project but the client just wants a quote- it’s hard to give a quote when just figuring out the scope itself will cost the client $10K to begin with. 

  • Upfront discovery costs and a clear depiction of what they will include is helpful to the client who may not understand scope creep. 
  • Anthem uses Asana to track hours, which doesn’t include a timer but does allow you to track projects on a smaller, real time scale. It increases communication about progress so that anyone can see the milestones at a glance, which allows for a more accurate view of project scope. 

[26:40] Bob adds that oftentimes, personality type impacts how people keep track of hours. Workflow, communication habits, waves of inspiration, etc all influence how someone may track their productivity. 

[29:47] Brad speaks about the cost of the sale- “We probably spend about 10% of our profit on each project on just getting the sale. Especially if it’s a brand new client.” 

[31:33] Bob talks about a template or a formula to get proposals turned around more quickly. Certain things are going to be the same for every proposal. 

[32:27] Ken shares that Metacake has different “building blocks” for every project or service offering, that are put together with other basic blocks to create an estimate. 

[35:25] Brad talks about proposal templates, or ways to build out proposals more quickly. 

[36:24] Ken asks what the most profitable services that The Guys have done over the years, and which are traditionally the ones that tend to lose money or be lower in profitability or harder to maintain/manage. 

[36:45] Brad: Technology has always been scary, because developing new technology leaves so much room for unexpected things to come up. 

[37:53] Bob: Managing social media is usually pretty straightforward and can be profitable- the old standby being paid media. 

[39:17] Brad adds that it is also incredibly difficult to predict profitability when you rely on the client for a lot of information- for example if you’re designing a website for a client it can take 3-6 months depending on the size of the site and the client. And that can be like pulling teeth, waiting for them to give you what you need. 

[41:00] Bob speaks about Metacake and how Ken’s partner Bob does a great job of keeping clients in line and being a real stickler for details on the front end.

  • “You guys will not start a project until you have all the content in hand… and then you will fight with the client and say hey we really don’t want to start because this affects the design… so until we have all the content I’m not sure.” 

[42:49] Bob shares the software used by a client he’s working with now, a tool called Accelo that is a time management/ project management/ team management tool that works well for them.