Brent Weaver is the CEO and founder of uGurus. He leads the vision for the company and creates educational programs that help agency owners work on their business to drive additional revenues, increase profits, and create freedom in their life. Brent is here to share his insight on referrals and the importance of choosing a niche for your agency.

3 Golden Nuggets

Niching helps you fish in the right pond. Figuring out a niche where you can be profitable and deliver the best results is "fishing in the right pond" according to Brent. The key is testing out different ponds in order to find the best fit for your agency.
Pareto Principle: 80% of outcomes are from 20% of input. Is worthwhile and valuable to determine if you're spinning your wheels on small clients that aren't helping contribute to your revenue. Going through this exercise is key to being more profitable.
There are 3 marketing engines agencies need. These are: content, partnerships, and paid ads. Relying on referrals is not scalable. It's like sitting on a one-legged stool. You must add these 3 marketing engines into the mix.

Sponsors and Resources

Wix: Today's episode is sponsored by the Wix Partner Program. Being a Wix Partner is ideal for freelancers and digital agencies that design and develop websites for their clients. Check out Wix.com/Partners to learn more and become a member of the community for free.

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Is Your Digital Agency Fishing in the Right Pond?

Jason: [00:00:00] On this episode, I talk with Brent Weaver about why referrals just aren't scalable and why it's so important to pick a niche. I hope you enjoy this episode. Hey, Brent, welcome to the show.

Brent: [00:00:13] Good to be here. Yeah, I'm excited to have you on, so tell us who you are and, uh, a little bit about the agency that you're in and what you do now.

Yeah. So, uh, my name is Brent Weaver, CEO, and founder of uGurus. We are a business school for digital agency owners. We primarily work with agencies that are kind of 1 to 10 person range, really helping them to track more leads, win more deals, delivering delight for their clients. They can profitably scale their agency and achieve some freedom in their business in life.

Before, uh, we're coming on into the ninth year doing this business. But before that I ran HotPress Web, which is a digital agency based in Denver, Colorado for about, I guess, about 13 years. And, uh, grew that from, uh, my business partner and I from, uh, us in our bedrooms and high school to a 14 person thriving agency in downtown Denver, uh, serving over 300 clients.

And, uh, we had clients like Dish Network and Anheuser Busch Inbev and all sorts of, uh, smaller and medium-sized businesses across the board.

Jason: [00:01:17] Awesome!. Did you sell the agency? Did you were like, Oh, we don't want to do this anymore? What's the what'd you do?

Brent: [00:01:23] Yeah. So we did the business did get acquired by another shop in Denver.

We had probably about two years before we sold the business. I started to blog and build some training programs for agency owners, and we had done some deals with Adobe. And so we, um, Kind of started kind of riding two horses at the same time we had the agency business, which was growing really well. And then we had this thing that, uh, myself and my business partner would do, you know, a day or two a week.

We'd go and, you know, create videos, we'd go do our own thing. And, uh, and so we kind of felt like we were starting to run two businesses at the same time, but also I think just as I'm sure, you know, right. The impact that we had on. Other agency owners that were like following our processes and our methods, like we were getting all of these, thank you letters in all the time for people that we'd really helped them transform their life and their income and their freedom.

And after a while, it was kinda like, Hey, we really enjoyed doing this. And we wanted our agency to go and be in a good place. So we had some really great opportunities to get that business acquired. And so we pursued one of them and it turned out really well.

Jason: [00:02:24] Awesome. Let's talk about after high school, um, and do an agency, right?

Because I think I know how, how it goes in high school. It's like, dude, I can, I can get some money for a year.

Brent: [00:02:37] I was basically working uh minimum wage $6.25 I think an hour, at the time, at a fabric store and somebody paid me $500 to build them an order form for a candy store out of Michigan. And it took me about a day and I was like, cool.

When I went to my boss at the fabric store and said, I'm going to go ahead and do this other thing. Cause I basically made like, you know, two months wages in a day. So, so that was that.

Jason: [00:03:03] That's awesome. And so if you could go back to when you were starting, what would you have done differently? How would you grow the business?

Brent: [00:03:14] I think for me, it's, you know, finding that audience, a high-value audience that you can leverage your skills to get really great results. For, as I mentioned, our first project was a candy store in Michigan. The only reason we got that client was because my business partner's dad would go hunting in Michigan and, you know, he'd go buy at this candy store and he'd pick up, you know, they'd order stuff.

But then they'd grab these order forms, uh, to order stuff. When they came back to Dallas and they would have to fax the order form in, and Shernis, uh, the woman that owned the store would always, you know, have to call it. Well, I can't read your handwriting, you know, there's this like whole thing, a community that supported this business.

And we just happened to kind of be a solution for that business. Right. But this tiny little candy store in Michigan, right. I mean, she wasn't making massive money. And so yeah, we built this thing, but the value of it right. Was great for her, but like, you know, it wasn't like it was worth $50,000 or $500,000, right.

Or something like that. But I think that we could've, our same skills could have easily fetched us a lot more money sooner, but because we were fishing from this pond, that was kind of like the local neighborhood pond. Right. Like we only had the network that we had access to. I was making a lot more money than I would at the fabric store.

Uh, I think there were other high-value ponds out there. And I think that's the thing that. Um, when we eventually figured that out, right, let's go hang around businesses that are, you know, making millions of dollars or tens of millions of dollars or like Dish, you know, billions of dollars. And it's just a totally different way to do business.

Right. I mean, I remember when we got Dish Network as a client, I mean, they'd come in with these like last-minute deadlines, but they'd basically give us a blank check. They'd be like, Hey, as much as you guys can work over the next two weeks like we'll take all of your team's hours for the two weeks, and we'll pay you a premium on that time because, you know, we have some big deadline or whatever, right.

And so it was just fundamentally a different type of client to work with versus where your, your skills might not be as valued. So I think that the audience component is something that we eventually learned. And once we started hanging out with businesses who, you know, in the millions of revenue, like budget became not like inconsequential, but it became a much less deciding factor in terms of like who you were, you know, what kind of work you were doing.

Jason: [00:05:36] Yeah. I always found that when you first start out and I started out doing websites for 500 bucks too, I don't know why it's always, you know, 500 bucks, but you always think, well, that's the max someone will pay. Or if I charge them twice the amount, I have to do twice the amount of work versus figuring out that audience, like, you know, Dish Network. Like our first one, I think our first big client was like Wter.com.

And they were a billion-dollar water brand, like Crystal Springs, Hinckley Springs, Belmont Springs, all these different Springs. And it kind of changed our mindset of going, Oh, there are these bigger companies that will pay for value rather than pay you for the amount of hours that you actually work.

Brent: [00:06:20] Like a lot of people, I got convinced that your prospects sometimes start to dictate your mindset a little bit.

And when we first opened our office in Denver, we were trying to, you know, we're in a conference room, we were thinking about, hey, where should we get new clients? And we thought, hey, maybe the chamber of commerce, right. Or something like that. And they were running these classes for brand new businesses.

We thought that was a prime audience, right? People are like, ah, you know, all these new businesses, they all need websites. Right. But the problem was, they weren't established. They were $0 revenue. They were sole proprietorships. You know, these businesses that maybe had 10, 20, $50,000 a year in annual revenue, which is, there's a lot of businesses out there.

There's like, almost 20 million businesses in the United States that are making $50,000 or less per year. So there's a lot of them out there, which is why Wix and Squarespace and GoDaddy and all these major brands are going on volume. Like they focus on that market, but for us as a small services shop, not a huge market like that.

And so I was going and teaching these classes and I'd have all these people come up to me and say, oh yeah, maybe you can help me build a website. And so we'd go through the proposal process or I'd go through even qualifying and they'd say, well, yeah, well, we only have $500. We only have $1,000 dollars.

And while we had done some projects for $20 or $30K, I started to convince myself that that was the market now for websites that like getting $1,500 for a website was like becoming really, really difficult. And, and I started thinking, okay, well, we should build our business based on volume or this or that.

Like we were trying to solve the problem. And the only issue at the time really was. I was fishing in the wrong pond, right? Like, no matter how many cool sales methodologies I could use, no matter how much, you know, value-based language, right? Like if the pond that I'm fishing from literally has businesses that are, you know, $50K a year in revenue, like, you know, selling a $10,000, $20,000 website to them, it doesn't really make sense.

Jason: [00:08:13] Very cool. And so how did you figure out the pond that you wanted to the fish after? And like, how would you do that over again? Cause I find that a lot of people struggle with that. And like you were saying, you kind of go to the chamber of commerce, you get a couple of clients and then those referrals actually dictate how your next couple of years are going to go because it's always the same or lower.

Brent: [00:08:35] So I think once we sat down in a room and said, okay, this is not working. Right. So we looked at, you know, where was all of our money coming from, which I think is a really good exercise. There's this concept of the pareto principle where 80% of your yield or revenue comes from 20% of your inputs or originally it was like somebody looking at, uh, land ownership.

Right. But this concept is, has played really well in business. So somebody had kind of taught us that we looked at our client base and we looked at who you're making the most money from. And yes, we did have a lot of clients that were small potatoes and they were taking up all of our time, but they weren't really getting us the results.

So we looked at all of our clients instead of, hey, who's actually driving results for us. And it was, by and large, it was organizations that had, you know, had been established for five or more years. Had over a million dollars in revenue. Uh, for the most part, they had dozens of employees, whether it was a nonprofit or whether it was a business, you know, some of our clients had tons of employees.

So we started looking at this and saying, look, let's just at least start saying no to anybody that hasn't been established for more than five years, it's less than a million dollars in revenue. And, um, you know, that has less than, let's say, 30 employees. So that was step one was at least identifying, Hey, here are some qualities, some constraints that this audience has that is actually driving revenue for us.

And let's start saying no to all those other things. So which created some capacity for us to look at other types of businesses. The second question to that though is we started asking ourselves well, okay. So these are the clients that are driving all of our money. We know who is helping us make more money.

We want more of those clients. So the second question is where do they hang out? Where do million-dollar businesses hang out? Right at that time, I really wasn't super educated on like verticals or really this idea of niching. To me, it was like a foreign concept. And if anything, it evoked a little bit of like resentment or disgust like, Oh, I could never niche. Right? Um, but we at least started asking ourselves that basic question, right? Where do these million-dollar businesses hangouts? And we start identifying organizations, there's organizations like EO. YPO in the Denver area, there were organizations like it was called Diner. It was like Denver Independent Network of Restaurant, uh, something.

Right. And we started identifying these groups that these businesses hung out. And so for example, I went and gave a talk at the Diner Organization, which was basically this group of about a hundred Denver-based restaurants that were all roughly over a million dollars a year in revenue, right. There were the most successful restaurants in Denver that were independent.

So I wouldn't give a talk at this group about how to leverage their website and social media to get more butts in seats. And there was like the same number of people that were in my old Chamber of Commerce classes. You know, there's about 15 restaurants, right? Except in this instance, I gave this talk, and then, you know, half a dozen restaurant owners came up to me and said, Hey, I love what you're doing.

We don't have anybody that can do this. It's great that you're teaching me this, but can you just come in and do it for us? And every single one of those clients turned into a 10 to $20,000 initial project with ongoing, you know, 10, 15, 20K a year in work. So like one talk in the right audience. And it was a fundamentally different conversation afterward.

And so that was where a real light bulb I think happened for us, was like, Oh wow. We can go in. Share do the same thing, right? The dynamics are the same, go teach stuff, share stuff, give tons of value. And if the pond is just a fundamentally better pond than, you know, we're going to have different results.

Jason: [00:12:02] Yeah. I love to teach how to do it because there are so many agencies that think if they do that well, you're giving away the secret sauce. And at the end of the day, there's no secret sauce, but people will actually decide to work with you if they actually understand the plan. Like, I always tell everybody when I used to race cars and I would teach people how to go through a corner at a hundred miles per hour, like a 90-degree turn.

And they'd be like, there's no way. But if I could actually communicate and show them, there is a plan for them not to die and then actually demonstrate it to them. Then they're going to always. Be able to like, Oh, I can do that. And then like, I'd always laugh with my other buddies and be like, oh, now they're faster than me.

I was like, crap. I need to tell him, be like, hit the brakes harder there.

Brent: [00:12:54] Well, I think that the fundamental, like, I mean the classic agency business model of staff augmentation, where at the time we had, let's say a dozen people working at our agency for a company, even an established company to go up there and hire a team full-time to be a part of their organization is a lot of money, right?

I mean, if you're going to go hire three people to be part of a digital department, I mean, that's $50K in salaries a month, plus all the other stuff that comes with having a team. Right. Whereas you can pay an agency, you know, maybe even, it sounds like $50,000 is a lot of money, but when you put it in the context of the alternative for most businesses, or maybe they hire a, a jack-of-all-trades person that has 19 responsibilities within the business, and one of them happens to be maintain a website.

Right. And they don't have the experience to, you know, really do like hardcore SEO or pay-per-click or build funnels. Right. Uh, so I think at the core, right, like agencies. Want to showcase their skills, uh, almost like a job interview, right? I mean, it doesn't make sense for most businesses to go out there and hire an entire team.

Right. That's why agencies exist. Cause you can snap in those skillsets for a fraction of the cost. I think going out there and teaching what you do showing the results, uh, also is a big part of that showing your potential clients, Hey, this is what you can get with this kind of, to your point, right?

Demo-ing, I think is a big part of that pre-sales process.

Jason: [00:14:14] When you actually start doing this and you're, you're growing your agency, what's the mistake that you see a lot of agency owners make, or a mistake that you guys made with, you know, in terms of referrals.

Brent: [00:14:27] I mean, look, referrals are, referrals are great.

I mean, who doesn't love a referral, right? Uh, when, when somebody sends you an email and says, Hey, you got me great results. And here's my friend. You know, Joe and Joe need your results and you should, you guys should talk. Right? Cause then you get that a little bit of that credibility passes on. Right. And so referrals are, are great.

Uh, the problem is they're not really predictable. Uh, they're not really scalable. Now I've published content. We've published blueprints about how to create systems around referrals, but even that right is kind of dictated based on the size of your network. Right? How many clients do you have? If you have 10 clients, you probably can't go to all 10 of them every day and be like, Hey.

Can you give me another referral, right? Whereas, you know, with something like Facebook ads, right. I can go to Facebook every day and they will take my money and they will put my ads and in front of audiences. Right. So I think that referrals as a strategy, I call it kind of a non-strategy. Uh, it's hope marketing.

It's, you know, referrals are table stakes. You should be out there doing good work and that should create referrals for you. And that will be like one leg of marketing, you know, game plan. Right. But you're, you can't really sit on a one-legged stool, right. It's not super comfortable. So we need to have a couple of other legs on that stool.

And so I call those marketing engines, right. We want to have a couple of additional marketing engines outside of referrals. To help, uh, your business get those consistent leads that are predictable, repeatable, and scalable. Those are kind of three qualities that we want to see out of them. When I, when I say marketing engine, we should be able to put in a fixed amount of money, money, or time and get a predictable result on the backend of that.

So the biggest mistake kind of back to your original question is that I think agencies, a lot of times they're so busy doing the work. And building stuff with their clients that they forgot to go out there and build awareness for themselves because they're so comfortable. With referrals because referrals are so easy.

Like it's like the difficulty from relying on referrals, actually building marketing engines, uh, for the first time is actually a pretty big jump because referrals require you just to focus on your clients, which is what a lot of people are used to. Right. But going out there and proactively building a marketing engine feels like a lot of work.

And so they don't do it. And I think that that was the biggest shift for us, right. Where we went from being passive, passively engaged in our marketing to going, Hey, you know what we need to actually. Really invest in this. We need to put somebody in the business. That's in charge of this, of the marketing component of the business.

A lot of agencies out there treat themselves as they're, you know, they try to treat themselves as their own best client, uh, which is just, I mean, it's a recipe for disaster, right? I mean, we know that, that just doesn't work typically. And so we started this to shift resources, right? Both hiring internal staff members, dedicated to marketing the agency and then also hiring other agencies.

To help us market our agency.

Jason: [00:17:14] Very cool. And so what's one example of a marketing engine that you see really working well.

Brent: [00:17:21] So I think there are three kinds of categories of engines. One is content. I mean, you're definitely awesome at this, right? You publish a ton of content. You're super consistent. You've got the great frequency of it.

Another engine kind of category is partnerships. So finding other people that have your ideal client, either as their own clients or on a list. And then the final one is a paid advertising. So I kind of focus mostly on a track-based strategy where we're putting out. You know, the information we're putting out messaging and then the right people are coming to us.

I'm not a huge fan personally of operating outbound and no, it's a great strategy out there. But I think for, if you're trying to get into a position of authority with your clients, I think that publishing becoming an influencer in your niche is the way you create raving fans. Right? It's really hard to create a raving fan through, uh, through outbound connection where somebody has never heard of you before.

So in those three categories, I mean, one example of a content-based strategy. One of my clients does is they, um, they speak on stages. So it's pretty simple calculus day. Every time they go and speak on a stage where they're virtual or physical. Right now, right now, the physical is not really happening. So they've moved a lot of their stuff to virtual.

They get anywhere between five and 15 qualified leads. These are longer sales cycles. But they have found that if they get about 20 to 30 qualified leads a month, that gives them enough energy to like to keep their sales pipeline like over full, right. They always have plenty of opportunities for them.

Their marketing engine is really simple. Get on two stages a month and that's a solved problem for them. So their only marketing activities are really. Booking out those stages. So at any given time, they might have four to six months of stages booked sometimes even more now, before COVID hit, I think they were up to like 12 months of stages.

And then all of a sudden, a lot of it evaporated and they did have to kind of rebuild that in the virtual space, but you know, that's a marketing engine, right. They know that if they go put their hour or two hours a week into outreach to, you know, other associations or organizations in their niche, that they're going to get that next stage book.

Right. And they just keep kind of putting some time into that engine. No, they're not out there doing Facebook ads. They're not out there trying to publish blog posts. They're not out there on social media. Like their whole engine is just getting those stages, uh, booked onto their calendars. And then they're, they're just done.

Right? So that's an example of content, right? Where you're out there, gigging in your market.

Jason: [00:19:50] Awesome. Very cool. Well, this has all been great. Brent, is there anything I didn't ask you that you think would benefit the audience?

Brent: [00:19:58] You know, I think that I mean, just on that last point of gigging, I think that this is kind of back to that.

The core of what agencies can be doing for them. It's probably one of the one areas that I spend the most time coaching, which is. Helping people get out there into their market and building that confidence to share their content, share their expertise, start running ads, those types of things. And, um, I think that's probably one of the areas that I think people could always spend more time on or, or spend more money.

Right. I've got clients who, before they came to us were like a Facebook ads agency. That's not spending any of their own money on Facebook ads. Right. And so, so trying to figure out how to fuel your engines and being confident that if you do that, You know, you're going to get results. I once had a client that before we started working together, you know, they're trying to attract $50,000 clients and they were scared to spend $500 in advertising.

And that's one thing that I think. You have to think about it in the context of your client's value is like, if you're going out there trying to attract $50,000 clients or a hundred thousand dollar clients, right. The amount of effort that you need to put into that engine is probably at least somewhat proportional to, uh, to the output.

So that's something to think about as you're starting to build your marketing engines

Awesome. And, uh, you have a book out that everybody can go check out on Amazon. Or tell us a little bit about the book.

Jason: [00:21:16] Yeah. So the book is called, Get Rich in the Deep End. And, uh, the basic premise is how to overcome that dependency on referrals and word of mouth as a digital agency owner, uh, how to identify your audience, build those awareness channels, attract the right clients, establish yourself as an authority in your niche, and then build systems and processes to acquire.

Those prospects and leads. So we walk you through basically those five A's of audience awareness, attract authority and acquire. And the book is a little bit different in that we follow an agency on our story. This is kind of an amalgamation of a bunch of different clients that we kind of created a narrative in the story.

So it makes it really easy to read. It's a pretty simple concept. And, um, yeah, we'd love for you guys to support that it's called get rich in the deep end. I think your viewers would love to read that book. Awesome. Well, everybody go check it out. And if you guys enjoyed this episode and you want, and to be surrounded by amazing agency owners that can, you know, really see the stuff that you might not be able to see, and really know what it's like in order to grow above the eight-figure Mark or beyond.

I want you all to go to a DigitalAgencyElite.com. This is our exclusive mastermind where we're always looking for the right. Agency owner that can have fun that can share that'd be transparent. And that really wants to scale very quickly. So go to a DigitalAgencyElite.com, and until next time have a Swenk day.

Is Your Digital Agency Fishing in the Right Pond?

Smart Agency Masterclass with Jason Swenk: Podcast for Digital Marketing Agencies

Is Your Digital Agency Fishing in the Right Pond?