The Virtual CPA Success Show: Episode 40
In this episode, we are joined by Jody Grunden and Dev Basu, of Powered by Search, to talk about important steps a company needs to take to develop a growth marketing strategy. Diving deep into the fastest way to quickly grow your business through marketing strategies focusing on your audience and pricing.
Jamie Nau: Hello everybody, and welcome to today's podcast today. I'm so excited to talk with Dev Basu from Powered by Search. Dev, welcome to the show. Give us a little bit of background on you and Powered by Search.
Dev Basu: Thanks Jamie, excited to be here. So I own Powered by Search, which is a B2B software as a service marketing agency. We work with software companies to fill their pipeline and grow their annual recurring revenues using demand gen. Then I have a second business, which is called Agency Academy, were like you guys, I support agency owners and help them scale up their businesses without working nights and weekends.
Jody Grunden: How many clients do you have now?
Dev Basu: About 12 right now. I primarily only work with the owner, helping them revamp the way that they are building, the way that they attract, the way that they engage and convert their clients.
Jody Grunden: So you're helping agencies market their product?
Dev Basu: Yeah.
Jody Grunden: So tell us a bit about that. I mean, you've had some roadblocks there and you've had some things that went really well. Before you get into the process and stuff, tell us the good and bad.
Dev Basu: I mean, I basically had been in the agency game for 14, 15 years now, so half my life really. I started out working in other people's agencies and then being an entrepreneur for the Yellow Pages group. They had an affiliate where they came in and said, can you build an online marketing division for our print agency? You can remember those print books. I don't know if anybody uses them anymore. So I was out there at like 19 learning from folks, being classically trained in sales at the Yellow Pages for twenty or thirty years. Then when I finished school, I got a business degree at the University of Toronto. So there I am in Canada. I said hey, why not just go out on my own? I had seen how agencies are run. Figured I might have a shot at doing it myself. I was young and dumb and didn't know any better. So here we are 12 years later with that. With Powered by Search and the growth we've had, I've basically taken every single mistake in the book from positioning and lead gen too, you know, sales conversations and turning conversations into clients. Then finally on the delivery side, starting off with a process wherein serving clients by myself, I was wearing myself out and turning that into building a team and delegating the work to them. Systemizing it, getting to some successful outcomes. I take in all of that now. And Agents Academy is basically if I met myself ten years ago, it's what I wish I had. To be able to not make the mistakes I just talked about. So I don't know. I mean, you learn from the mistake. It's even better when they're expensive mistakes because you don't make them again.
All: Laughing [in audible]
Jamie Nau: You mentioned you're a great marketer because you said that you want to teach people, not to overwork and get to sleep at night. So I think a lot of people take that like, yes, sign me up. So tell me where you start with that. What is the path you go when you first work with the client?
Dev Basu: Starting usually with their positioning. I mean, if you think about the common traps that most agency owners fall into, they just kind of go, oh yeah, you know, I'm good at doing a couple of things, whether that's web design or pay-per-click or SEO, whatever it might be. Then you look at their local market player who's the biggest agency in town. They try to replicate their website and then copy their pricing, or they might even think that their pricing is aspirational. So they take a haircut on it. And as a result of this comparative way, they're their positioning tends to be really watered down. I mean, they're a generalist firm for the most part when they come in. And you know, the world does not need another generalist web design agency. That's just the reality of it. The litmus test we apply is if you could take your competitor's logo and slap it onto your website, would your client even know any different? And if the answer is no, then you might have a positioning problem, you don't have a point of perspective about how you do what you do. Let's start over there. To give you a story. I just started working with a client who's had an agency for 20 years. He's in Johannesburg, South Africa. He didn’t have an agency, to begin with. He had an engineering-focused firm where he said, you know what, my background is in engineering. I'm going to start this directory of all these other engineering firms that are regional to South Africa in this case. And then as a result of being listed over there, those engineering firms said, hey, can you help me by building a website? And he said, yes. So he built the website. And then he said, well, can you help me market the website? And then he goes, what is PPC? Let me figure that out. This was in the early 90s. That led to a point where he started off specializing. Then as a result of those engineering firms doing other professional services companies, accountants, lawyers, et cetera, now he's serving all these other clients. So I think most agencies actually start out specialize. Their first client is their specialism, and then they go and start working with all these other kinds of people. And before you know it, they don't really have a focus anymore. So we spent an hour going through a positioning exercise, which I call narrowing your niche and being able to kind of talk through, you know, who have you got the best results for since the inception of your agency? Who paid you the most happiness? Number two. Then who led to the most referrals as well? And do you like working with them? And we very quickly figured out that he actually didn't enjoy working with engineering companies. They took too long to sell through. They had aboard. And he goes, I like working with small businesses because I get to work with the owner. They make decisions fast. If they're not a solo operator small business, then I know they can pay me well over time. We dug into that a bit deeper. And he said, I really actually like enjoy working with lawyers. I went, you enjoy working with real lawyers? Really?
Jody Grunden: I'm married to one. I know what you're talking about.
All: Laughing [in audible]
Dev Basu: So then he goes, yeah. I enjoy working with lawyers. So I asked what kind of law? In the U.S. and Canada, PI law, personal injury is a big space, commercial and family. He goes, I don't really like working family. I don't work on a personal injury. That's not in my code of ethics. I don't feel good about it. Commercial law? Yeah, we've helped a couple of companies. Then I asked if they are on your website? And he goes, no we never thought to do that. So in an hour, we went through this exercise where we just went from a very sort of wide-ranging conversation to a very focused conversation. Now he's creating a new website to launch a commercial law-focused offering where he's talking about how to get commercial lawyers not only in South Africa but also in Europe as well, where they've got multiple offices. And his positioning got dialed in from like very kind of clueless to, you know, very focused in an hour. So that's typically where we start.
Jody Grunden: It sounds very familiar. I mean, we talk to accounting firms about exactly that. The problem is they think they have to be global because you don't want to turn people away. I know we even internally struggled with that for a while before we actually start focusing and narrowing our positioning in a niche diving into creative agencies. The opposite happened because when you narrow your focus the more clients come to you, right? And they start coming back versus you're trying to go to them, which is ten times easier, ten times better. It really kinds of help because the more and more you narrow your focus, the better off you are. Just like you in talking about commercial lawyers versus lawyers in general. That's a very narrow focus. I bet the agency you're talking about is probably reaping the reward for that.
Dev Basu: Well, the owner is very excited about it. It kind of reminds me of, like Jody, our first conversation where you said, look, you guys basically kind of coined virtual CFO as your category creation before anybody was really looking for it. So that's the next step after positioning. It's being able to carve out positioning and an offering that makes people go, huh? What's that? Tell me more. As opposed to we just do SEO, PPC, and web design, which they've heard a million times before. So making people kind of stopped in their tracks, that pattern interrupt, I think is an important thing as well. That creates the gateway into premium positioning, premium pricing. I call it a signature system in terms of how they deliver what they do. Almost every agency is very unique. They just don't know what their uniqueness is because it's so I guess it's so apparent to them. But on the outside, there's actually something really special about what they do. What we start off with is just extracting what that is and then being able to package it in a way that's appealing to their market.
Jamie Nau: That sounds fantastic. As you said, in the VCFO example, if you give a very standard answer to what you do then people are going to tune you out. They're not going to ask any follow-up questions. But if you give them something they haven't heard before, they will ask if you can explain more.
Jody Grunden: So you mentioned two things You mentioned niching a service and then you also mentioned niching a product. Which way should you go or should you go both ways?
Dev Basu: I think it's a two-step process, start with niching down to a market segment and you could be horizontally positioned or vertically positioned. So horizontal would the marketing firm that markets to millennials. So like Pepsi could hire you. They want to get in front of millennials. So could Nike. So you don't have a vertical focus. But it's a market focus. Then the opposite, vertical positioning is like you only work with industrial engineering firms or as we do, we don't just work with SAS company software as a service. We only work would with B2B companies that are at a growth stage. So we can go down fairly narrow. It's worked out great for us, by the way, like it was scary as hell. But in retrospect, you know, I wish we would have made that decision far, far before we actually did and we would have been reaping the rewards of that. The second level of that is let's suppose you get to a point where even with your narrow positioning, there are 20 other companies that do effectively the same thing. They're all kind of good. I mean, if there are 20 companies they are probably in the first top 25 percent of your market. That's when you start going down and creating a specific product offering that turns the way that the market looks at your category on its head. So for example, if you are looking at the number of CPAs that serve agencies, I can probably think maybe 10 so far. I can count them on my fingers. But of the 10, I can't tell you other than you guys, frankly, like from the process that you showed me, that you approach it in such a specific manner that is so transparent, that is so obvious in terms of its value that just saying that you're a CPA would actually be underselling what you do? Right. That's where that service offering packaging really comes in.
Jamie Nau: That makes a lot of sense. So in our pre-talk here, you mentioned a word that most accountants hate hearing, but I'm sure you love selling. You mentioned the word audit. Do you want to talk about that a little bit and what that product offering is?
Dev Basu: The context in which I shared it with you, if you're selling something that is a professional services solution, it's a relatively high ticket, meaning you're not competing as being the cheapest competitor in the industry. And if you're an agency owner listening to this, hopefully, you think of yourself as top 10 percent in your space, offering a really high-quality product at a high, a premium price, or at least a desire to sell it at a premium price. So if all of that assumption is true, if you just tell somebody that they're not doing so well, I mean, they can take it or leave it. And for the most part, people actually get kind of defensive if you poke holes in what they're doing. So the word audit, I think, does invoke this sense of fear. Almost like what are they going to find? Right. So one of the things we found both in our agency business, but also in the agency coaching business as well, is an idea of a self-assessment. So I created this tool called the Seven Figure Agency Audit. It's free. It's a self-assessment tool where we ask you nine questions about your agency. It takes about 15 minutes to do and it shows you exactly where your chokepoints are or roadblocks are and being able to create a more profitable agency where you're having more fun and helping more people. But similarly, we built a similar tool on the Powered by Search side, which we call the B2B SAS scalability score. It answers the question, how well can you scale? And by having prospects go through that and arrive at their own conclusion, it's like a marketing rubric, essentially. If you feel that in yourself, you come to your own answers. And so it's a great sales tool or strategy which is actually tied to the way that you deliver your services. You guys look at all these ratios, for example, for a healthy and profitable agency, have them work out what their numbers are prior to even engaging you. And what it's good for is it really turns the service promise on its head where I talked to so many agency owners, where they say we have 25 years of experience and we know we have the best service in our market, but those are claims that only become realized if once you choose to hire them. And the problem is they don't have enough leads to even talk to it to hire them. So something like this, which is a self-assessment audit, lets the prospect kind of come to their own conclusion, whether you can help them or not, by the quality of the questions that you're actually asking them. But I mean, audits are such an important tool because if you start prescribing things before you diagnose, it's malpractice for sure.
Jody Grunden: I love that idea for sure. So basically you are getting them to help fix any holes.
Dev Basu: You got it. It just a simple 1 to 10 scale between where you think you. Then you just add them up and average it out and it's a super simple way of being able to figure out. The problem is that usually, people are so focused on working in the business at a 500-foot level that very rarely do they take that opportunity to zoom out of the 30000-foot level and see the business for really where it's at.
Jamie Nau: I'm guessing you have a ton of data because I'm sure a lot of people have filled out the survey. So what are some of the more common areas that keep coming up when they take the assessment that they really should focus on?
Dev Basu: I'm looking at some of them right now, and I think the lowest scores are really on leveraging talent, a lot of agencies who are doing over a million dollars. They still use tribal knowledge for being able to run the business, meaning, you know, they're relying on their best employee or the best couple of employees. The thing that the agency owner loses sleep on overnight is I haven't given that person a raise recently. I know that the market's talking to them. I don't want them being on LinkedIn, but I know people are approaching them on LinkedIn. It's only a matter of time. It's a ticking time bomb before I lose them. And the funny thing is I find that agency owners would rather live in that pain. That uncomfortable kind of situation rather than trying to build the systems required where they can delegate work off their plate and build people and systems together, not, you know, systems to replace people. People are part of systems at the end of the day. So on a scale of one to ten, I almost always see leverage talent being, you know, at a four roughly on average to the other ones I see are around filling funnel lead generations always still a problem. It's a common one that usually comes in at a four or five, primarily because of lead quality. So most of your listeners are agencies that have already got some scale and they're doing over a million dollars in revenue. It really does come down to lead quality, which is they spend almost too much time talking to people who are not buyers. They're window shoppers, and they don't actually have a funnel filter in place to be able to say, you know, here's what we charge. Here's what you can expect on a call, the first call with us and just, you know, saying what they're going to do on the website so that it filters out the wrong kinds of prospects. Probably the last one is auditioning prospects. And this is kind of a unique concept that I came up with, which is, you know if this was like American Idol. Do you remember that show? Simon Cowell was on it, you know, the British guy and, you know, he just strikes fear into the hearts of all these performers that would come up. They're always looking for Simon to say, yes, that you can go on to the next round. And I think that a lot of agencies when that first sales call comes around, they're a bit like the dancing monkey. So, you know, the prospect gets on in the first 30 seconds and the questions are rapid-fire. How many people do you have? What's your revenue? Who are your clients? You know, do I have to sign a long-term contract or not? And there are all these barrages of logistical questions that pop up, which really puts, I think, the agency at almost a bit on the defensive. So I teach a strategy where really the two fundamental questions are why now? What's changing your business that makes making you reach out right now? And then of all the people that you could work with, there are some great people in our market. There are other people you could talk to. There are courses you could take. There are people you could hire internally. Why us? And if the prospect does not know the answer to those two questions, there's a very small probability that you'll turn that conversation into a client, and that one probably is the lowest score. It's usually a one or a two because people aren't thinking about it as a construct that, you know, your prospects actually need the service you're offering more than you need them if you're good at what you do.
Jody Grunden: So you're saying why now and why us?
Dev Basu: Yes. Those are the two primary questions.
Jody Grunden: It's kind of funny because we lead exactly the same way. We let them talk because then what that happens then you can tailor your presentation around them. I think a lot of people get confused with they think they've got to present, to sell themselves. Really at that point, you shouldn't have to sell yourself too much because they're coming to you for a reason, right?
Dev Basu: One hundred percent. And you can add to that as well, like the way you begin a call. At least the way I share the strategy around that is, let's say Jody if you were to be coming to us. We just say, hey Jody, thanks for being on the call. We've got 30 minutes carved out for this. I've got a call right after. Do you have a hard stop as well? So now we know that the call is not going to go over, right? The second thing is I say, look, my job is pretty simple. It's just to figure out if and how we can help. If this is about if I can, then we'll talk about how we. If we can't, we might refer you to somebody else. There's nothing to buy on this call today so you can keep your credit card away. So you know, is it cool if we jump in and I ask you a few questions to just learn a bit more about your situation? And if they say yes, then the next question is, I bet you have lots of stuff going on in your business. Why is this a new thing? Why are we having the conversation today and not yesterday and not three months from now? And you just let them talk, right? And so it's flipping the tables on the typical conversation where, you know, most of the time prospects don't actually have a very specific process for buying. It's haphazard. But if you don't have a system for selling, you'll always be forced to adopt their system for buying. And sometimes they'll make decisions on the only thing that they know how to which is the price at the end of the day. Lowest price, you know, less risk. That's kind of how to mentally process it.
Jamie Nau: One of my first sales lessons came from Jody on the first traveling trip we went on together. So we were in Seattle and we're sitting at the bar before the conference starts. And he's like people are going to ask you about Summit. They're going to ask you about what you do. Here's how you answer those questions. Question number one, people ask how much you cost, you say we're expensive because we want to funnel out those people that are looking for a bookkeeper that's going to charge ten dollars an hour. The second question they're going to ask is what does it take to start up with you guys? And you're going to say that it takes a lot of work. So that's one of the first lessons I had in sales. You want to funnel out people that are looking for things that you don't provide because you don't want to have an hour-long sales talk and in the end be like okay. This person's not looking for us.
Dev Basu: It's so good. I mean, think about it. You're telling somebody that you're expensive as your first interaction with them. Someone might be thinking, why would you say that off the bat?
All: Laughing [in audible]
Dev Basu: We are cut from the same cloth because we get the same question as well. And we just say we're reassuringly expensive and they go, what do you mean you're reassuringly expensive? And we share with them the cost of not hiring us is more to do so. And they go okay. It's kind of like I remember in Django Unchained, that movie where Leonardo DiCaprio goes, you've piqued my curiosity but now you have my intrigue or something like that. Let them lean in a bit closer about how it actually works.
Jamie Nau: Well, I can tell you, I was sitting at that bar thinking, oh, this is going to be easy. I'm going to answer those two questions and no one else is going to talk to me the rest of the night. And that's exactly not what happened. You know, I answer those questions like that and I end up having, like, hour-long conversations with people about, why are we expensive? And why is it a lot of work? You could tell the people who were like oh, that's not what I'm looking for. But the people that liked your answers you end up spending a lot of time talking to them.
Dev Basu: I have a friend who's a copywriting expert and he runs a business called Case Study Buddy. His name's Joel and he's got a great saying. He says, Like our client's standards, our prices are a bit higher.
Jamie Nau: So we are getting close on time here, definitely appreciate you coming on the show, Dev. I want to take a second to get some final thoughts.
Dev Basu: Jody, why don't you go first?
Jody Grunden: Why now? Why us? Those are by far the two most important questions. And don't be afraid to talk about how expensive you are. That's not something you want to shy away from. You want to be able to have that transparent conversation with a potential client. Let them know hey, why we are expensive. Make them understand you're creating value. You're going to make their life a lot easier. So it's not hey, we're price gouging, that's not it at all. It's hey, we are prepped for this type of thing. The other thing is, again, narrowing your niche. Make sure you are branding and your positioning in the right area. Not only in the vertical, but in the horizontal. In both areas. As a CPA firm, we could do everything, right? But we don't. We just do virtual CFO services. Virtual CFO services for creative agencies. That is our niche.
Dev Basu: One hundred percent, and you reminded me of this quote that Warren Buffett shared, which was, price is what you pay, value is what you get. Have you heard that before?
Jody Grunden: Yes, I have.
Dev Basu: To pair that, I don't know who came up with the riches are in the niches. I've heard that before in a number of marketing circles, we shall quote it to Anonymous. But I think those two things paired together, just work on an amazing service where your best in class in whatever it is that you do, then you get the right to charge what you're worth for it as well. The biggest thing I find is it's almost too tempting and easy to, it's actually easy to be cheap and it's easy to be a generalist. It's relatively hard to be narrow because you have to take that leap of faith and suspend your disbelief that you'll be pigeonholed into, you know, only working with a specific type of client or only selling a kind of product. But then you do it like, you know, the team here at Summit doing it for decades now, you really find there's a beauty in that just to be able to become the master of your craft and not to be a jack of all trades. No one wants to hire a jack of all trades. They want to hire masters of crafts. Experts in what they actually do. So yeah, if you're listening to this something for you to think about.
Jamie Nau: So how can our listeners get hold of you?
Dev Basu: If you go to milliondollaragency.coach/audit, you'll actually see a free copy of the 7 Figure Audit I mentioned. If you want to get a hold of me I'm easy to Google. I'm most active on Twitter. So just twitter.com/devbasu. You can hit me up there or on LinkedIn. Happy to connect.
Jamie Nau: Great. Well, thanks for coming on Dev. Appreciate it.
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