Robert Patin on Pricing Math, AI Workflows, and the Race to Become a Software-Powered Agency

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Speaker B: What is the likelihood of outcome? What is, how are you going to mitigate the risk factors associated with this, this outcome that I'm looking to accomplish? And if you can't meaningfully answer those questions, you can't make them feel comfortable in it where they feel that they can accomplish it and that you can accomplish it and you have the experience to do so. That's where the sale was lost. It's not actually in the price. The price was just the easiest thing for them to point to when they were not clear of how you were going to do all those things.

Speaker A: Welcome to the Digital Agency Growth podcast. I'm your host, Dan Englander. So today on the show I'm very excited to welcome Robert Patton. So Robert is the founder of Creative Agency Success, which is a good name because it tells you like what, what people are going for right in the title, which is a consulting firm that's dedicated to helping creative agency scale. So Robert's known for being a deeply inquisitive and analytical leader with a distinctive distinct ability to devise solutions that elevate companies and lifestyles. He's a two time international best selling author. He's passionate about sharing his next level strategies so that creative agency leaders will find fulfillment and growth, which is better than just arbitrary numbers. So Robert, welcome.

Speaker B: Thank you so much for having me, bud.

Speaker A: Yeah, yeah, likewise. So first off, I'd love to just learn about your journey a little bit and how, how you got here.

Speaker B: A, uh, very meandery story frankly. I, I guess let me go back several decades now, but I first went to calls for photography and I had a photography business for several years. I learned that I really did not want to do that as a career and ended up shutting that business down and traveling the world for about a year. Met my husband along the way actually as well. And when I got back to la, I had spent every single dollar of my savings and had to very Quickly get a job. And it just so happened that I ended up getting a job in finance at an agency. My dad was an accountant. I was a frankly a child accountant. I think the first time I actually did a set of book closures I was 12 years old. So I very quickly got a job in finance at an agency. And it was just like the perfect crossover between the uh, creative thing that I've always loved and enjoyed and why I pursued the photography education and what I was looking to foster in myself and the truly excel minded mind that I am. Like I am just the most type a person possible. And so was it was the, the, the right crossover between the two things of something that I really enjoy and like who I just am innately as a person.

Speaker A: Yeah, that, that's great. I had like a similar path where I was working for an agency and had a really. For uh, a creative agency actually doing animation work and selling animation work and then read four hour Work week and then like just treated that as my bible like a lot of people did and dropped off the base of the. Of the earth travel Asia for three months with my girlfriend at the time and then started sales schema way back then. And then it's gone through a million twists and turns. Just as a quick sidebar. Where did you go when you went about your travels and like uh, aside from meeting your husband, what, what did you. How did that inform the business if at all?

Speaker B: I mean it definitely informed me a lot as a person. I don't know necessarily as how it informed the business necessarily. I mean during that trip I. South Korea, Thailand, Malaysia, India, all over Europe, Rome, France, the uk, Denmark. Anyways, the loads of different countries over that timeframe. I would say the openness and the desire to really understand the other person is like what allowed for me to develop as from like a sales perspective that I hadn't really had before. Like I was from a uh, young age I was like that like archetypal kind of person of like a pocket protection wearing kind of person. Even like very introverted and I had to learn to come out of my shell a bit and that time allowed for me to come out of my shell quite a lot. The version of Robertson you see in front of you today is a very different version that existed over 20 years ago. Even just from like that social respect as well.

Speaker A: Yeah, yeah that, that makes sense. I think for me like there was a. I just remember having this memory. Uh, I was in San Francisco, my girlfriend at the time and we just gotten back from that. That Long trip and like sitting on a park bench and feeling like I could probably go to sleep on the park bench and feel at home there because it was kind of like losing this sense of home where you have. You feel kind of more like free and you feel at home wherever you go and you travel a lot. So that I've since lost that openness and that freedom, I think. But you know, it changes and also. So anyway, to bring this to what you're up to now, can you talk a little bit about cas, like what are you actually doing with clients when somebody starts with you, like, what are typically the first things you're working through?

Speaker B: Yeah, I mean I'll uh, take a little bit of. Explain a little bit more what happened within that agency and then explain how it kind of translates into what I'm doing now. When I first started at that agency, the first one that I worked at, they were insolvent frankly and helped them grow from where they were at, ah, like 1.2 million to over eight figures over the course of a 24 month period of time. Um, incredibly profitable. I left that agency, did it again with another, then ended up freelancing and eventually starting creative agency success and working with agencies every single day and multiple of them. The reality of it is that the core component of me is that still that analytical mind. So how I look at the way that the agency is functioning that allows for us to derive what numbers is going to guide the decision making that we have. So how do I ensure that we are as profitable as we possibly can be with making sure that we're taking care of the team, being very mindful of the culture and how we are managing the people that are ultimately delivering the service that we're selling and making sure that we're doing so in a sustainable fashion that allows for the owners of the agency to be meaningfully profitable and being able to grow wealth but do less, that is based on gut feel. So how do you measure the pieces of the business, make sure that what we are working on is actually having the desired impact and then how do we take from that information to guide the decision that the next decision that we're needing to make is largely what we do every single day? I would say that where do we start very often is pricing. That's a massive problem across the industry, by and large.

Speaker A: Yeah, let's double click on that a little bit. What are, what are those typical pricing failures that you're seeing?

Speaker B: Oh boy. The first, I would say is over optimism. We, you know, hey, I Think that we have to sell this price point of this specific project and throw a random number out there and say it's 50 grand. We have to sell it for. And the reality is that it should be sold for 75, but if we just do it a little bit faster, it'll be fine. Is one of, like, the key components that I see. And so how do we remove that optimism from the way that we're looking at it? Be more pragmatic of how things have actually transpired in the past. But then there's also just like, very basic mathematical problems that are going into it too. It's like you're determining the price point that you should be selling at, but you're not factoring in underutilized time, the full burden rate, how you're thinking about that. How are you actually allocating your overhead burden across every project so you're actually able to see the net margins of what's actually happening? How are you able to take the complexity of what a project actually is, the phases and all those pieces, and building a meaningful sales budgeting process that allows for you to be meaningfully accurate?

Speaker A: Yeah, I'd love to talk a little more about that. Like, the thing that's interesting about pricing is, for one, usually you see the pricing failure and that people are underpricing things as opposed to overpricing them, at least in the agency world, in my experience. And the reasons that people are underpricing is because they assume that it'll defeat objections that they're getting in the sales process. When I found that sometimes that's the case, but it's usually the minority of the. The pie graph for the reason. Yeah, and the other thing that I've had, I've made this mistake a lot, is that you think, like, pricing is easy to change. You literally just change it. There's nothing you really have to do, or maybe a proposal slide update or something, but the effects of it are actually pretty, pretty drastic. And it takes a long time to get data to figure out if it's working. So I love to hear your thoughts on that. Like, are, I guess, are you seeing the same things? And why do people sort of make decisions about pricing the wrong way in your experience?

Speaker B: I mean, predominantly is the factor that they think that they can't sell it and it's going to make it easier for them to be able to sell, or that they're not going to run into that pricing objection. The reality of. Let's play that out for a second. Because where most people believe it ends up being pricing. It's because it's one of the easiest things that someone can say when they don't see the actual value in accordance to the price point. And so they're saying, and the prospect may even very well say that it's price, but you lost the sell so much earlier than when you actually shared the price, than when that price was actually shared. The reality of the world is what it actually takes for them to deliver upon what it is that they're doing. It's either they can afford the price point of what it actually takes for you to deliver it and the value is actually there, or you need to be doing something very differently that allows for the value and the money exchange to be fair and valuable to them, but it isn't going to manage the objection. The reality of the world is that you need to make them feel comfortable in the risk assessment that they're making. Because every single person, you and I included, are, and every single listener, you're thinking about, all right, well, how much is this going to cost? Do I have the resources to do so? Yes or no? Like, that's a very pragmatic question. If you're trying to sell to a local barber $150,000 brand, yeah, you're probably barking up the wrong tree. But assuming that they have the financial resources to be able to afford this outcome and that they're willing to actually sacrifice the. What it's going to take to do so, the financial resources, the piece is, how much is this? What is the likelihood of outcome? What is, uh, how are you going to mitigate the risk factors associated with this, this outcome that I'm looking to accomplish? And if you can't meaningfully answer those questions, you can't make them feel comfortable in it where they feel that they can accomplish it and that you can accomplish it and you have the experience to do so, that's where the sale was lost. It's not actually in the price. The price was just the easiest thing for them to point to when they were not clear of how you were going to do all those things.

Speaker A: Yeah, exactly. And I think a lot of the times, like where the price objection is real is like if you're just talking to the wrong person, you're just talking to somebody that can't afford what you do. And then the, the other place I see it play out is like something that I've called. Other people call this too, like an ROI based argument versus like a batna or best alternative to negotiated arrangement based argument.

Speaker B: Right.

Speaker A: Where it's like if you're making just an ROI based argument, people are going to consciously or subconsciously just compare you to their next best alternative and then slot you into that. Right. Then that's where you're uh, they're like, well, you know, this is too expensive because I can go do these other things or just do nothing, which is what usually happens. So that's. And then you still get. But the outward appearance is still just a price objection. So to kind of segue a little bit, and I think this is actually tied to price in a lot of ways is, you know, AI is a thing that is happening right now. People didn't know that. How is it affecting your clients and how is it coming up in terms of what, you know, your clients clients are expecting in terms of pricing and that kind of thing?

Speaker B: I want to, I'm going to push back to one of the things you said and then I'll answer the question. Sure. One of the things that just like a piece of advice for anyone that's listening right now. If someone actually just says that something is too expensive, I would implore you to ask a very simple question in comparison to what so that you're actually able to get a meaningful response to understand even if they don't end up moving forward, that is still really useful information. You spent time in those calls and on those proposals and having this relationship and fostering this relationship that you want to take a meaningful amount of value yourself from this. If it's not a money exchange, at least learn something so that you can change things in the future. And so if they are comparison and comparing you to another agency or to upwork, like, all right, here's the context of the conversation and how do I feel about that and how do I want to respond to that. But uh, when it comes to AI from a pricing perspective, I don't see a whole lot of implication in today's market yet. I expect there to be more and more and more as time progresses. There's slight amounts of pricing pressure. Uh, um, there's a reasonable amount of pricing pressure out there in the market, but I think that's more economic than it actually has to do with AI Right now. I, I see the timeline facing over time to be first going to be enterprise clients that are going to start to have this pricing pressure because the reality is, is that enterprise are the ones that have the resources to implement AI meaningfully in the organization. And once they realize I'm able to have a 20%, 30%, 40% implication to operational Efficiency, well then I expect my partners to do the same. And then eventually these tools that are only available to Enterprise because they can afford to bespokely develop them are eventually going to be created as a software set or a tool that uh, the SMB market will have access to. And then the same thing will happen for them too. And the eventual outcome. I don't want to be doom and gloom on this episode, but there's a lot of far reaching implications for the industry over time.

Speaker A: Yeah, I'm not necessarily disagreeing, but it just surprises me a little bit because I always assume that Enterprise would move slower, you know, because they're more risk averse and they have more security concerns and all these sorts of things. So um, I'd love to hear more about that. Like what are you, what are you sort of seeing that's leading you to that?

Speaker B: So what I, what I'm seeing is a couple of pieces as you're looking at buying. So especially if you're dealing with those that are, you know, procurement oriented, you have the procurement teams that are now recognizing we've bought this X, Y and Z piece of software that, or we're developing this piece of software that's going to have this type of implication. So they're starting to look at how can I push more on my agency partners from a cost perspective? And they're uh, looking at things. The reality of the AI future uh, is that we're spending a lot of time, or you should be spending a lot of time in R and D to allow for yourself to be able to be more impactful and have more value in the work that you're ultimately doing. And so the nature of the conversation is going to shift, I believe over the course of the next year or two around what that actual value means and what the R D component of the agency actually has. But what I'm seeing right now is anecdotal at best. Like I can't say that specifically this client's coming back and saying AI, you should be able to do AI implications with what it is that we're doing. And frankly if, um, if the client is telling you, let's say that you're an SMMA agency as an example, and they're saying that you should be able to produce the assets, um, utilizing AI and that's the type of client that you're coming up against. I mean, frankly, I, I don't know that they see the value in what you're doing in the first place. And there's a very different animal of conversation that's happening there and the problem in your agency.

Speaker A: Yeah, like I remember like Robert Rose, I think I heard it from him first, had this idea of like the Smile graph, right. Where it's like the strategy planning is valuable, then you have this giant dip for all the creation and the work and then it comes back out the other end for like measurements and making decisions and stuff. So I think that's probably just accelerated a lot of that.

Speaker B: Exactly.

Speaker A: I think kind of sticking, sticking within the same topic but talking more about, you know, what agencies are doing internally. So the agencies that are using AI for biz dev, like where do you actually see it being useful and where do you see people kind of using it just for the sake of using it? Which is something I see a lot of the time, which is like I'm um, like there's like a hundred things you could do that would work that don't involve AI at all, but you're just trying to use it. So I'd love to hear your thoughts on that.

Speaker B: I would say I'll dive into it a bit more meaningfully and deeply, but I would say the two contrasting pieces is ones that are trying to delegate the thinking versus actually meaningfully building strategy. So the those that are winning utilizing AI in biz dev are really meaningfully thinking through how the strategy fully functions and what the workflow if then logic and how exactly they go about that process. So they're taking the existing process that's working and just making it go faster so that they can do more outreach or can do have m more conversations with people that are removing m the administrative burden. But the strategy is still really cemented in what and how they're going about it. So it could be in developing, you know, customized collateral, it could be in the way that the follow up emails are being sent. It could be how am I distilling a conversation and actually sending a follow up email to them. So like as an example, one of the things that we are doing is that in each call, from the initial qualification call to discovery calls that we have after the fact, those transcriptions are looking at, here's the agency specific problems, here's the. Here's an actual usable tool or podcast episode or blog post that we've had that is actually useful for this specific agency to allow them to digest a little bit more of what we've been speaking about. That allows for them to understand the context around this problem and how they can go about solving it. So they're able to process more information and make more validation into the direction that we are going to head. And then in discovery call, it's, you know, here's a case study, here's an example. So it's identifying what is the best usefulness for that specific person, personalizing it, and then actually prepping the email to go out. Those that I see not really winning is that they're uh, like they're going to, taking a transcription from a zoom recording and then going to ChatGPT or Claude and saying, build me a proposal. It's like, well, okay, but what are we doing? What is important, what isn't important? What is a similar situation? What have you had success with in the past? And they're delegating all of the thinking, their thinking, their expertise to AI to a junior level person at best and having IT do all of their writing, have it doing all of their thinking. And that's where like I largely see the distinction between them is like, how do you think about the process by which you would follow if you were doing it yourself and then utilizing AI more as a utility to process or synthesize the information that makes it faster.

Speaker A: Yeah, I definitely agree. Like I uh, think we're in this, this really unique moment where like if you're an agency and you have a strong competency and you really, really understand a particular market and how it works and what makes it tick, like you have this amazing opportunity right now to like, it's like you've been running with weights around your ankles and now the weights are off. Like you can go build anything you can say. Clyde. Here's this, here's all this context on what's worked and what these people need. Here's all the context on this person's situation. Here's what's worked for us in the past. Here's what we need, here's what it. Here are like 10 closed deals and what they look like. And let's build a process for the follow up emails that happen at each step. But on the other hand, if you're all over the place as the agency, like if the core foundation isn't there, you've now just got this distraction machine that's being like pushed down your throat. So uh, hopefully you're bringing this to a question, but like what are some of the things that are kind of the building blocks that you see as needing to be in place to make this stuff work? And really just a good jumping off point, if that makes any sense.

Speaker B: I. So I would say a couple of things, right. And it really depends on the, the size of agency and how long they've been in business and how much they actually do understand their market. Here's a, here's a, a couple of examples, right? So let's say that we, you, I and every single person on this call, probably in the point in this, in this conversation, during the time that you've been listening to this, you've probably received four or five cold emails that now ended up in your junk that has been customized or personalized based on desktop research that's been done on you that AI wrote and it's slop like it's horrible, it's not useful, it's not meaningful and it's ending up in a junk folder. Now, uh, an example of one that's actually meaningfully having impact. So like as an example, a client of mine, they identified a couple of different signals that allow for them to understand exactly when someone is going to have a need for their service. They're a brand and product development agency. One of the things that they know is that if someone is being hired within this larger company, within supply chain, that they are amping up for a launch of a new project or a new product. So now that we know that this company is hiring someone within supply chain, we should be reaching out to the brand managers within this organization to find out kind of what's going on. Starting to actually have conversations about the product that they are going to be launching and understanding those components of it or other examples of it is that they have had some press release around a new, new hire or someone is just, just changed roles in a director, um, or VP level position and so doing outreach to them specifically. And it's not you're doing this math oriented LinkedIn campaign or cold email that you're now taking via this clay table that you've created, but you're actually taking the list of people that you're reaching out to and actually further breaking it down so that you can. Even in their example, they're not using AI to write anything, they're doing it themselves. But rather than having to reach out to 10, they're reaching out to one that actually needs them right now. And so they can do the thing that they intentionally were doing. More personal, more intentional, more human, but making sure that they're in front of the right person.

Speaker A: Your team is small, your agency is specialized, your market is massive and your deals are high trust and high value. With that in mind, referrals really can get you to the next level. But the real problem is there's no system behind getting them. They come in when someone happens to remember you, not because you have a process that makes them happen reliably. Here's the thing that most people get wrong. The typical referral ask sounds like do you know anyone who might need this? That forces the other person to do all the thinking and most people won't. A better system flips it. You ask for specific introductions instead. And when the ask is specific, helping you stops feeling like work and referrals start happening more consistently. I've created a short walkthrough on how we've helped agencies implement this system to keep the pipeline full tastefully, without cold outreach. And you can get that by going to salesschema.com referralworkshop again saleschema.com referralworkshop yeah, and I think that like that touches on a bigger topic or theme that we deal with too, which is like there's this appetite to want to automate everything, but then there's stuff that's so high leverage that it's really stupid to automate. Like if you have, you know, if you're, if you're an agency and you work with supply chain or whatever your example was, and you need XYZ criteria and then you layer on a signal or a trigger on top of that, the number of people each week or each month that are going to fit their criteria. Criteria are really small. So the idea that you would want to automate that message to them doesn't make a whole lot of sense. So like to hopefully bring this to a question again, how do you sort of feel about the tasks that agencies should automate versus the ones that they shouldn't? That makes sense.

Speaker B: Very broad oriented question. But I suppose it's like I would put things into two different camps. It's either data synthesis and thinking oriented pieces. Right. And like the reality is is that the further along that you get in your journey of AI workflow creation, you can take more of that thinking and breaking it down. So like I'll an example I was using in a conversation with a client earlier today in the development, utilizing AI for RFP responses as an example is that one component that is very common in an RFP response is like the agency bio. But there's loads of different ways that you can go about writing that agency bio. What pieces of it are you highlighting within it? So are you going to hand, are you going to write that yourself or are you going to have AI do it? So here's in an eventual future version, once you've distilled that agency bio, hey, you know, uh, what segment is this client in? What are the challenges that this client's currently having? So if they are having a really high level strategy oriented problem where they are having bad brand recall, we want to start talking about high oriented, experienced senior level strategists that we have on our team, maybe even talking about specific projects that we've done in the past that has been completely revitalizing a brand and having some implication that we can further then talk about that in the case study later. But that if then logic that happens for us, every single one of us, we have developed an experience over time and every single time we are asked a question, we are doing if then questions in our head and our brains frankly are no different than a lot of what AI is doing in association memory. And so if you're able to build that if then logic that you are personally doing yourself and build it into a workflow, you can make it do the same thing. But until you actually spend the time to take that logic that you have that if in this scenario do this, if this scenario do that, then you should do just the very administrative pieces of go scrape this website, go take this information, go do this piece, and then I'm gonna summarize it in a format that I'm looking for so that I can use it and then do the thinking piece. Yeah, is how I would the distinction between the two in my head at least.

Speaker A: Yeah, that makes sense. And it's almost like having, having that sort of like copilot, although it's actually called copilot for claw now, but I use that broadly. Just uh, it's, it's sort of. I found that it almost just makes your decision making better because then you have to pause and think and agree or disagree with something that it says. One thing that this is kind of with the RFP example. It's funny because like over the last few years the trend has been away from RFPs because they suck. Right? It takes a lot of time, they're risky, they're badly written and so on. Now I'm sort of like, what if there's this whole, this growth path to the agency that just really nails this whole AI flow and then just like tries to participate in as many RFEs as humanly possible until the game changes and it becomes harder again. Like are you seeing that develop at all? Do you see that as something that could start to happen more?

Speaker B: You just described like six months of last year for me, of me actually doing that exact thing. I'm not gonna get into like the depths of the answer of that question because it's like a proprietary thing that that's being developed for an agency. But uh, yeah, I see that exactly working. And the reality of the world is there's more bad RFPs than there are like meaningfully intentional ones. And I think what ends up happening quite often is someone maybe from a larger organization, they think that they're supposed to put out an rfp, but it's actually really bad. Like one I actually saw that had KPIs just as blank lines in the RFP response of here's what we're looking to accomplish. Like, wow, okay. But yes, I do see an eventuality of my view of where AI has meaningful impact is strategists should spend more time in strategy. Designers should spend more time designing account managers should spend more time with clients. Less time in email, less time reading documents, less time communicating internally, less time updating project management tools, less time doing the things that is like the muck of our jobs. I mean, for me as a financial executive at an agency, then I'll take myself back to the first one. Over the first like year, I was doing a lot of like meaningful strategic work. Into that second year I was probably, maybe 20% of my time was doing something that warranted my salary and 80% of it's why I ended up getting bored and wanting to move on and do other things. It's the same thing's true for every single one of you. And how can you take away that muck, that administrative stuff, the stuff that you do not enjoy that's actually taking you away from the thing that you chose to do in this life and actually spend more time doing that thing that you enjoy.

Speaker A: Yeah, uh, I definitely agree. It's funny, I was having lunch with a friend yesterday who's a high level agency biz dev person, you know, and, and we were basically saying, like, I think we've both written enough sales recap emails for two lifetimes. Like, I'm willing to let that muscle atrophy to like start learning higher level things. And like, you know, I'm doing a lot more vibe coding. Maybe you are too. And, and using all these tools and it's like, yeah, it's not that you're solving a different problem, it's like you're solving like the same problem you've been working on for clients, like in a higher level way. Right? Because like, yes, it's software has become detached from needing to be a product. It can now just be a part of your existing thing, or you can, or in the case of, you know, other areas, it could just be art, which I think we're going to start seeing more of. So any thoughts on that?

Speaker B: I would say the. I agree generally with what you're saying. The reality of the world is, is that the thing that you, in an AI future, the reality of the expert right now, you have an incredible amount of opportunity to take that expertise and distill it into a product that you're able to then leverage. And that's the R and D component of what I was talking about earlier, is that you, I, and anyone that's listening right now that's looking to whether they're vibe coding or hiring a developer, building out a workflow or building out prompts, whatever it is that you're doing, you're taking your own expertise that you've developed over years, decades, potentially, and turning it into a product that is now able to use to make your work faster. And so what that ends up doing in, uh, a future world is that R and D time that you're spending today is going to make your work faster. And if we're talking about entirely pricing pressure, there's an entirely different conversation around what actually value means in a future world for an agency. And so how do you actually understand the distinction between them? And in the short term, it means that agencies can be incredibly more profitable because it takes less resources for you to be able to do things, assuming you're able to sell more revenue for the same amount of time block. But the more that you invest into distilling your own logic and expertise into a thought process that AI can synthesize. And the most important thing I see today, which I think makes my, I don't think I know that it makes my nerd data brain, like incredibly excited, is data is king right now. The more that you're able to meaningfully have a, uh, data set that AI can leverage and utilize, prioritize, synthesize in a meaningful way that you can tell at what priority level it should be applying to, what is, what is the most useful. And it's like why you see every single one of the AI platforms building projects or the workspaces pieces with Claude, is that how do you actually have that context window that AI is utilizing for what it is that it's prioritizing and what information it's leveraging in order to respond to you? And these skills, these little agents that are being built within each one of these different AI platforms, it's exactly the Same thing. It's how do you take that small little skill, maybe the tip of your finger that is a skill that you have, this one small piece of skill and turn it into an agent that is able to then do that thing over and over and over again exactly as you're describing. For that biz dev guy, it's like I've written so many emails that are follow up emails to people. It's like I can take that database of thousands of them over my career and turn it into a data set that just done for you. You don't have to do it anymore.

Speaker A: Yeah. As you're talking, I just keep thinking of, there's this one line. Do you ever read Cryptonomicon? It's like the Silicon Valley favorite by Neal Stephenson. It's a great book. But there's these mythical entrepreneurs that are building this crazy cryptographic thing. But anyway, they talk about how like in any one of these ventures there's this core like nugget of creative output that's amazing. And then everything else is just making license plates is the word that they use. And that, that's a little, that's a little harsh. I don't think it's literally that, that's, that's, that's where my head was going. Where was I going? So I, I guess with that, like we've talked, we've sort of danced around this a little bit. But like over the next few years this is going to be a big difficult question maybe, but what do you feel like are those defensible areas for an agency?

Speaker B: Let me make sure I understand the question. Defensible areas and meaning how can they shore up their business model and themselves in a future market versus where they are today? Is that what you're saying?

Speaker A: Yeah. And let me frame it out. I'll uh, give a little more context. Like I think we're getting past the point of the hashtag or like quote unquote, it's AI plus humans like sometimes. But then there's also going to be areas where it's probably just replacing people. We need to be sober about that. So that's, that's what I'm getting at. It's like.

Speaker B: Yeah, so the way that I'm looking, I mean, I can't see out that far frankly. Right. I mean how quickly we've moved over the course of the past year is much faster than I had initially anticipated we would be moving and how quickly things are coming out. I mean the fact that you have an estimated amount of 80 something percent of all code that is being produced by Anthropic today is being produced by Claude code and is actually not having a human involved in it anymore. And that they're hiring of new engineers is completely dropped off is crazy for such a vastly growing company. The race that I think that we are in right now is a race of software companies learning to become an agency or agencies learning to become software companies. And the value that agencies have has always been the way in which we are able to mitigate the risk factors of a marketing strategy, of a marketing campaign, of a brand, of a rebrand of a new brand, launch of a go to market strategy of all those pieces like that is the reality of the value that an agency brings to the table. And I don't know and I don't think that that ultimately changes in a future world. But it's largely for us the same way that I was describing, it's that that context that we are then taking, that association memory of like hey, you're having a very similar problem to one that we've experienced in the past that's related to this exact kind of segment of why I was saying that data is king. Is that data point, that information that lives in your Google Drive somewhere that is somewhere in your email that is in a conversation that you're having on Zoom today is a useful piece of information that you can use and you should be using to be able to create a data set that AI eventually will be able to leverage. And then layering on your expertise of how you're thinking through those pieces of information that that context that you're able to provide that if then logic is, is incredibly useful. How do you sure up the future world? I don't know that it's any more possible. You know from 10 years ago before you know the dot com era piece uh, of it too, right? It's like we don't know. I don't know. I can't meaningfully answer that question. To give someone a true do step one, step two, step three. I don't have a crystal ball anymore than the next person. But my view is lean into AI as much as you can at least dedicate 15 to 20% of your time. It has an incredible amount of of benefit compounding benefit that you're able to build out of it and then try to build from the smallest digestible chunk. So what is the smallest piece that I can build that has the least amount of hallucination or error or whatever that is a skill that you have that you can utilize to be more impactful to clients and then focus entirely fully on the value that you're able to derive, the value that you're able to give to a client in that exchange, that, that economical exchange that you have with them. How do you really meaningfully have that impact?

Speaker A: Yeah, that's, that's really great. And it's funny because we've talked a lot about the advantage or the opportunity agencies now have to develop software either for internal use or products, or even if it's not software processes that are AI empowered. Let's say you said something interesting, which is also software becoming agencies. Can you elaborate on that? Like why, why would a software company want to become an agency right now?

Speaker B: Because there's billions m of dollars a year in revenue to be able to be generated from the agency world. Right? And so like, uh, let's take Waldo as an example, right? So Waldo was a software company that went and hired a bunch of WPP strategists to come in and give their strategy thinking. This was before, even before Deep Research came out with OpenAI or in Gemini. And so they were going through what types of information, what types of desktop research would you actually be doing to synthesize this information of competitive set of white space in the market of all of these different pieces that they're taking from a, uh, brand strategy direction and then developed a software product to do brand strategy. It was called Waldo, and it's an incredibly cool tool, um, became less useful as Deep Research came out. But it's, it's that race, man. I mean the reality of it is that as a software company sees the potential, and that's what the market has always been, is there's opportunity over here. How can I make it and how can I capitalize on that opportunity? The piece that is the lacking component for the software companies which gives agencies an advantage is they don't have the expertise to do so. You do. So the software company had to go hire a bunch of WPP strategists to do that. And they did. And they had the pockets to do so. But you're first going to have to have someone that has the idea that is going to go raise the capital, that is then going to go hire the people to then develop the software. But that will happen. It will happen. And today you have the expertise, you have the advantage.

Speaker A: Yeah, that's great. It's funny because like, though I don't really know what will happen either. I think the best we can do is just sort of say here, here are the bets that I'm taking. Right. And you're welcome to take the same bets or different ones or whatever. And I, uh, I sort of feel like. What was I going to say? There, there's like, it's like there's these, these sectors that, uh, it's almost like, you know, looking at discount liquor or grocery stores in a recession and, and taking a bad saying, I think people are still going to need groceries. Like one of those is like the accountability stuff. Like, I can, you know, I can tell you what to do, but whether you do it or not is beyond the scope of just information.

Speaker B: Sure.

Speaker A: How do you feel about that, Robert?

Speaker B: Area that I see as the nervousness for most agencies today is they see the barrier of entry into this AI landscape as too far, too hard, too much nuance, it's moving too fast. And I understand fully what that feels like because, uh, frankly, I felt the exact same. And frankly, I still feel the same. It is moving incredibly fast. And I am not an AI engineer. I don't even play one in a movie. I am a accountant, fractional cfo, Excel spreadsheet nerd is who I am. Have done the whole vibe coding thing and played around with it and it was a lot easier than I thought it was going to be. Um, and while I may be a little bit further along than you, if you haven't been playing with AI and you've just been using, you know, a normal kind of open chat bot, and you haven't set up projects and those context windows and that sort of thing, and projects and workspace and cloth or whatever, I, I implore you to play with it, to use it, to think about the distinction of, is this actually a moment of data process, or is this a moment of meaningful thinking where I'm able to provide value in the same context where I was saying earlier that after the first year of working as a financial executive at that first agency, is that that 70% of my time was very administrative, very answering questions. It was rudimentary, absolutely rudimentary. And those pieces, if you're able at that point, and largely for many of you, you probably feel that same way. It's like 30% of my job. Are the things that I'm able to like meaningfully have impact to keep that 30%, that 70% of stuff that's worked, to get rid of some of that. You're not going to get rid of that all tomorrow. But start with one, one simple thing that's easy for you to do, and start with something that's largely not Overly complicated and frankly, you know, YouTube University is incredibly helpful here of, you know, type in how to create a custom GPT or a custom prompt and start to figure out how you can turn that one small thing that you're able to do. Writing an email, responding to this thing, synthesizing this data, whatever it is that you have, that logic, that process to follow and try it. It's going to work. Eh, probably the first couple of times and you'll continue to play with it. But now that you've taken something that used to take an hour and it took you several times and test to do so, and now it no longer takes an hour, it takes you 15 minutes and you used to do it every single week. I mean that's 52 hours saved. A year of time.

Speaker A: Yeah, and I'll actually go a step further and say like, I think there's a point of diminishing returns to, to having that technical skill set when it comes to this stuff. I think, I think it does help you get over the first barrier. But from there like the people that I think are really going to have the advantage or again like the ones that really understand the problem they're trying to solve, like whether it's for themselves or for a client. And back to what you're saying, like pick the thing that sounds fun to you, like if the thing, if it seems like it's going to be really fun to save all this time, great. Or if it's something else, start with that. But I, I just feel like the people that are actually working in this understand the implic implications, excuse me, of like where it could go versus the ones that are just being force fed all these articles and the, all this stuff and you know, and so on.

Speaker B: So I feel like I can, I don't feel like I remember the moment in late 2024 when I realized the true potential of what AI could ultimately do. And it's like the most nerdy way that I could have possibly figured it out. But I remember I was, I was on the couch, I got served up an advertisement from, from a company called Coefficient where it had reported that it was able to connect a Google spreadsheet to AI and actually didn't work. I immediately got up and like, I've got to try this out, I've got to go play with this. And tried it, didn't work. Ended up creating a uh, like backhanded way. And now it's much easier to do now, but I created a backhanded way between Zapier and um. And, and OpenAI to be able to create a zap that was able to pull information from with an Excel formula, pull in information, actually take a prompt that I had pre created and then drop it into OpenAI and then bring it back into the, the Google spreadsheet. And I realized how far reaching it was because now I'm able to take the logic part of it and something that I knew how to do, right? Like I'm an Excel nerd and I was something I was trying to apply to something I already knew how to do, something that I was innate to me, that I knew like the back of my hand and realizing. And I went outside and I was literally jumping up and down like excited. I'm not a person that's athletic and wanted to go run a mile. And I just like remember speaking so incredibly fast and explaining to my husband, like, hey, it's gonna be able to do this and like we're gonna be able to do this now with it. And like it's gonna create this situation and like this is what this means in the future. And like this is gone and this is gonna be different and this is gonna. I don't have to do this anymore. And like was just incredibly excited. And then I remember this like realization that happened over the course of like the following months is like, I have this equal feeling of excitement and anxiety because it's an incredibly scary future, right? Like the prospect of each one of us potentially being able to be replaced by a computer system, it's as existential, right? Like we, we don't know what we are going to be and uh, society is going to have to grapple with that in time. And I nowhere near qualified to figure that piece of it out. And I'm not even going to try. But what I am going to do is I am going to leverage the opportunity that I have in front of me today. Take the years, decades of experience that I have been able to build and actually have meaningful impact to those that I work with. And how can I do so in a way that, that is. Feels most right to me, that has the, the ma as much impact as I possibly can and try to leverage the opportunities in front of me. That's all I'm suggesting to you, is that you have a specific set of skills that you've developed over time. And I feel like I'm Liam Neeson saying that specific line. Yeah, but you've developed a specific set of skills over years and take that, leverage it, use it in this modern world that we currently have and you may not be as nerdy as I am when it comes to technology and software and stuff, and that's perfectly fine. But I would wager that you're going to enjoy seeing the types of output that it can actually do and how much time it actually saves that you're actually able to spend more time with your family, spend more time with your kids, spend more time doing more leisurely things, or if you want to reinvest that time in your workday to doing more high impactful creative work, more strategy oriented things that you chose to do this job for, that then you're going to just have more fun again in the work that you're doing, I guarantee, I guarantee you. I mean, I can't say this for every single person there's obviously the edge cases, but for me, the more that I felt like I was doing the rudimentary things, the less engaged I was in my job, the less excited I was to show up to work, the more that it felt like a chore to get out of bed in the morning and actually show up to the office. And I hated that life. I didn't enjoy that. Why I ended up changing how I was going about how I was serving agencies in, in my, my current state of how I'm doing it today because I wanted to have fun again. I wanted to feel mentally stimulated. And I'm sure that the same thing's true for you. And what is that version for you? It doesn't have to be the exact version of mine. Obviously we're different people. But what is that version like for you?

Speaker A: Yeah, that's, that's really good. And I think that, you know, a lot of the times, like success in any business is just doing a lot of monotonous stuff over and over and over again. So if you, if you can take a chunk out of it, that means that you're just more likely to outlast competitors or whatever. So I think that's a really good point, Robert. I think it's a good note to end on and getting towards the end of our time. Yeah. Where can people go to follow what you're up to and learn more and so on?

Speaker B: Feel free to follow me on LinkedIn. I'll make sure to include all those details in the show notes, but also go to creativeagencysuccess.com digitalagencygrowth there's three things that you can do on that page. First being that we've got a white, uh, paper on how to go about converting prospects into paying clients. No paywall there or anything. Um, go ahead and check it out. Also offering a free copy of my first book, the Agency Blueprint. And then if you're wanting to talk about your agency specifically and what you can be doing to adapt into this AI future, happy to have a chat with you. There's a link to book a call there too. Awesome.

Speaker A: We'll get that linked. Robert, thank you so much. Really appreciate it.

Speaker B: It's great to be here. Thank you Ed.

Speaker A: Before we wrap up, a quick reminder. The referral engine is our system for giving you predictable warm intros every without cold outreach, spam or burnout. If you want a pipeline that actually moves your agency or B2B service company forward, you can get all the details and schedule a no pressure consultation with us@salesschema.com ReferralEngine. Thanks again for listening and I look forward to catching you on the next episode of the Digital Agency Growth podcast.