Innovative Strategies for Agency Growth and Client Acquisition with Miles Welch

Mike (00:01.158)
Miles, welcome to Hegel, the B2B Sales to Podcast. Thanks ever so much for joining us.

Miles Welch (00:22.124)
Love it a bit here Mike, thank you.

Mike (00:23.782)
And we've known each other for quite a while now, Miles. I think I first saw you present at a Brain Labs session years ago.

Miles Welch (00:32.076)
Quite possibly, yeah, because that would have been a while ago now. But it would be, yeah, yeah, I think we've kind of crossed paths over the years, but I've a few times seen you speak. I always enjoyed it.

Mike (00:34.468)
It would have been a long time ago, yes!

Mike (00:39.558)
Exactly. Yep. And we've done more and more together in the recent years. That's great. So before we get into the questions, just explain to the audience that listening, what's your background? What do you do? And anything unusual about yourself.

Miles Welch (00:44.716)
We have.

Miles Welch (00:54.188)
Sure. Yeah, so my background, I mean, I started off really in advertising. I had a very brief stint after university and at university on the Erasmus scheme, sort of working in cancer research labs. And I thought that's what I wanted to do. Completely put me off when the actual reality kicked in, although I do know a lot about viruses and it's quite useful during the pandemic. But yeah, so going from.

wanting to do council research, not enjoying working in a very quiet environment in a lab and going to the polar opposite. And my first job working in advertising, which is, you know, I think by that point, all the money had gone out of advertising. Unfortunately, the fast cars had gone from the car parks. But one good thing about working in the ad industry, this was sort of 95, 96 when I first got there was the digital, you know, internet came along and things go when digital and the.

Mike (01:36.106)
Yes.

Miles Welch (01:51.116)
agency I worked for was quite forward looking and they started an agency, a digital agency on the side of their business. And that was for me much more interesting. I was quite sort of, you know, technically minded if you like, although I had a degree in immunology, was the science behind it and the sort of the newness of it was very attractive. So I went into doing digital work in, you know, 96, I'm really the first sort of, you know,

websites for brands, early loan calculators for banks to work out loan repayments were BT Touchpoint, not sure you remember that sort of early ISDN kiosks that BT had. We designed the interface for that and loaded content for it. So yeah, that was kind my I've gone into digital quite early and I've pretty much been in that since in terms of the overall sort of market ended up.

Mike (02:24.1)
well.

Mike (02:30.182)
Oh yes, I do, yes, yes, yes, yes, yes.

Miles Welch (02:44.332)
running a few agencies like Digitas, doing quite a few turnarounds on agencies, making them profitable, growing. And then 2010 got more onto the corporate finance, M &A side of things, and have been doing that ever since. So I guess my main description, my job description at the moment is really, I guess, similar to you in a way, is being an advisor to agencies, sitting on their boards and helping them to grow and at some point, realize some value.

Mike (03:11.366)
Very good. Something different about yourself.

Miles Welch (03:15.628)
Yeah gosh, I don't know if it's different but you know at 51 I've taken up rowing which is a bit brutal on the body but I did a learn to skull course because I live near Marlow which is right on the River Thames right so no real excuse, always fancy doing it at uni, never did and I've completed after doing the learn to row I've got into the sort of the development squad there and I've gone down the rabbit hole of all things rowing now so doing it six times a week.

Mike (03:21.252)
Excellent!

Miles Welch (03:44.404)
you know, trying to keep up with the younger guys. And, you know, I've got all the kits, so probably one of all the gear, no idea type of people, but thoroughly enjoying it. And I'm now racing, so I'm doing Henley, Henley, Henley, four and eight, not Henley Regatta, but Henley, four and eight. And there's a Reading competition coming up as well in an eight man team. So it's great to be part of a squad, train together, you know, eat together and race together. So it's yeah.

Mike (03:57.286)
Oh my god!

Mike (04:07.494)
Yeah.

Miles Welch (04:12.14)
amazing experience so far and being on the water especially when it's sunny not when it's like this but when it's sunny amazing amazing experience yeah.

Mike (04:16.294)
Yeah, it's beautiful. Yeah, amazing. Especially if you're going early in the morning and you're training in the morning. Must be stunning. Yeah, that is very good. And again, something very different, mostly wet and cold, but something very different than your day job. And I think that's a really important thing is that it gives you a different perspective on life.

Miles Welch (04:23.276)
Yeah, the sun's coming up, it's just delightful.

Mostly mostly wet and cold.

Miles Welch (04:37.868)
It is, I'm very strict about training times and not overrunning into the evenings when I'm training or doing something else. So you've got to be disciplined with that. Otherwise, work just takes over completely.

Mike (04:49.126)
Yes, absolutely.

Mike (04:53.606)
And talking about discipline and expertise, obviously you're an expert in the agency world and clearly very disciplined in your approach to life and I know work as well. So let's just kind of pick up, we've got three kind of questions we wanted to just talk through. The first one is, what do agencies get right and wrong when approaching their sales and marketing? And what are the key areas that indicate success in your experience, both being an operator and an advisor?

Miles Welch (05:23.372)
my question. I think the first thing that agencies don't do particularly well, and if they do do well, would do a lot better, is a lot of them sell just their services. So I can't count how many websites I've been on of agencies, and it's literally a list of things that they do. And it's like walking into a Sweety shop and saying, you know, do you want the red or the green one? Which Sweets do you want, red or green?

rather than it being more sort of, you know, problem solving focus, need problem focused, where you've got a solution to a particular problem that that audience has. You know, as a buyer, you must see the same thing, but going onto, you know, an agency's website and just seeing a list of services, it becomes very commoditized and it's not really selling what you're doing for them. And I think that's a

Mike (06:16.646)
Correct.

Miles Welch (06:22.23)
a big thing that agencies get wrong. I think, so selling services is probably one. The other one I think is under investments. I think that especially when you're getting a team of people in or a person in to do it for you, I think people try and do it as cheap as possible. And rather than getting somebody who's probably more seasoned and has a more strong rep...

track record, they'll try and get somebody in who can just middle manage and that doesn't work very well. I'm not saying every senior person that comes in, you know, works out. That's not what I'm saying, but I do think it's a general under investment in sales and marketing. And I think it's a perception thing that you can get away with. I mean, it's the same with everybody really in their business, but getting away with a slightly cheaper resource, slightly less experience, and you're going to get the same result. You won't. I think the other thing is most people's marketing is

I think even if you're a marketing agency, your marketing tends to be the last thing you think about. You're not often very good at marketing yourselves. There's a very, there's a lack of differentiation. There's a lack of a marketing plan. There's no go -to -market plan really. And it's very much left up to, we'll do a lot of content. We'll push it out. We'll be noisy on LinkedIn, be noisy on Twitter, et cetera. And it'll all work out. And...

you see the different content that people do produce and one person is sort of tweeting about we have a lunch, the other person talking about something completely, there's no coherency in the messaging you're trying to push across to client, it should really be reinforcing your core proposition all the time, you should always come back to that. I think that also people market to their peers rather than to their clients, I think. Yeah, and I think a lot of, and again, completely, and I think it's great to do,

Mike (07:52.742)
Hmm.

Mike (08:03.302)
Ah, yes, I think that's a big problem. Yes. Certainly in the low -mid market, yes.

Miles Welch (08:14.572)
um award entries and win awards but there's so many awards now that you can sort of squeeze yourself into um i think they are valuable it's good to be award -winning because it's recognition it's great for team great for morale great for culture but who are you marketing to really you know your your peers are there your clients there as well i'm not sure i think some awards are better than others so clearly you know the the efficacy ones will bound to be be good and it will rather stamp to you when you do get to

maybe procurement stage or decision making stage and these guys are more of a sure bet but typically that comes with scale rather than necessarily your notoriety or your you know how well known you are so I think

Mike (08:53.382)
And we've certainly seen in an agency that I'm in that when we win awards, we do get inbound inquiries from brands. So it definitely works.

Miles Welch (09:01.228)
Absolutely. It can do. I think, you know, it's sometimes disproportionately invested in, in terms of time and efforts. Um, and I think most of it tends to be peer to peer rather than peer to clients in its efficacy. Um, so, so yeah, I think market, I guess the other strong point round sales and marketing generally is just to be more marketing led in your approach to sales. So.

Mike (09:08.804)
Yes.

Miles Welch (09:30.284)
I always say that, you know, it's not just about sales and then marketing separately. I think marketing has to be the enabler for sales. I think marketing sits behind sales. And if you can get the marketing right, you can get your outbound rights then, and you can build your, your sort of marketing engine to be as good as your inbound capability of your network. And by, by inbound, I mean your network, your website, you know, your.

Mike (09:54.662)
referrals. Yeah.

Miles Welch (09:56.172)
Exactly. All the things that you would, you would probably normally get without any marketing. Um, that those are, you want to keep on doing those, but also you want to be able to create an engine room that delivers as many leads as you get coming inbound, I think. And if you can do that, then you've got longevity. You've got a much stronger pipeline. You've got more assurance over the confidence in your forecasts.

And then you can, you know, you'll be much more than able to invest in growth provides a very stable platform. But I think the lumpiness in people's revenue and the sort of the, you know, the sort of one month good, one month bad is probably because the sales and marketing is skewed between either inbound or outbound. Um, and we don't have that consistency. I mean, client growth is another conversation altogether, but, um, those are sort of the main points. I think the, um,

The other thing is that a lot of people are commoditized. I think there's little, you know, what you call blue water, if you like, or space between you and the next agency. And even again, the analogy of looking at a website, sometimes it's actually very difficult to understand what the agency actually does, bizarrely, even though it's a website. And I'm sure you get very clear building it and writing it, but...

Mike (10:59.686)
Correct.

Miles Welch (11:17.868)
It's whether people actually understand and can clearly get to the nub of what you are, who you do, who you do it for, what problem you solve within a couple of paragraphs. I think that's often not the case. So, and I think the other thing is differentiation sometimes just goes skin deep, right? Everyone says, I've got the best data. I've got the best people. We do the best work, but why? How can you prove that? And...

I think unless you can dig into improve it, A, I don't think you'll really believe what you're selling, but also I don't think the client's going to really see how you're different from the next people. And then it's going to be on price, which is not where you want to be. So I think really, know, marketing led propositions are fantastic and they sound great, but.

Mike (12:02.342)
Correct.

Miles Welch (12:08.876)
It's got to be deeper than that. You've got to have something that really truly makes you a little bit different from everybody else. I'm saying how do we market to be different? You can be more competitive. You can be, you know, have a better sales marketing capability and still win. But trying to develop that real USP is where you should be trying to put some focus.

Mike (12:27.622)
I mean, I always go back to, so I was trained as you probably remember back in the day, I was in big consulting firms. And one thing we talked about all the time was thought leadership. You know, what do we mean by thought leadership? Well, it was a crosshair. It was your sector expertise and your capability expertise. And in that crosshair, in terms of differentiation, you need not just people that know that crosshair of sector and deep capability expertise, but you need to prove it.

You need to have thought leadership papers. You need to be speaking at conferences. You need to be at trade associations as the submit matter expert. There are lots of things that need to happen to demonstrate your differentiation. And as an agency, even up to like 10, 20 million of fee income, the idea that you can serve all markets in all things organic growth, I think is a bit ludicrous.

because you can't be differentiated. Because all you've then got is, we've got amazing people. Yes, every agency has amazing people. That's not a differentiator.

Miles Welch (13:30.828)
baby.

Miles Welch (13:37.324)
you may well do right but it's that's the proof point once you've won it yeah how great people are and how they rely on you but you can't that's not differentiator when you're trying to win something.

Mike (13:47.462)
No. And I mean, interesting when you look at buyers, Miles, so if you look at buyers and when buyers are looking at agencies, which I'm sure people that are listening would be very interested in, is when they're looking at that, well, what makes this agency stand out? What makes it differentiated? What makes it sticky enough such that if I buy it, I'm going to double my money in the next three years? On that sales and marketing front, what do you see them looking for mainly?

Miles Welch (14:14.86)
I think a lot of it comes back to the confidence in the pipeline really. So if you look at it from, okay, well, these guys are saying they're going to do these numbers over the next two, three years. The question is, you know, do you paint a hockey stick and go, it's going to be amazing and show little proof or do you build something that is ambitious but pragmatic with a stack of evidence behind it to go, yeah, we're pretty sure these guys are going to hit it.

Right. So how do you do that? Well, one is obviously you have a very clear approach to how you grow your grown retain your clients. Cause that's the base, right? You then start thinking, well, okay, well, if I'm going to hit my say, have 12 weeks worth of revenue confidence in the business, which means in 12 weeks time, I'm going to hit my revenue target. I probably five to 10 % tolerance. Then how do you do that? Well, you've got to have pretty good.

sales and marketing capability, pretty good network and that to be generating enough leads that you know, if you have say a million year pipeline, you're going to convert at least half of it in that period. And that you've got a track record of doing that. Now, if your sales and marketing capabilities is pretty ad hoc, you've been some big clients, but you don't really know when they're going to come in and how much you're going to convert. And it could be, it might not be, then that confidence starts to chip a bit. And then the buyer will think, well, great, but I'm going to...

put a lot of this sort of value into the back end of the deal. If you say you can do it great, the more evidence you can demonstrate and show and you've got that sort of not turnkey, but a real good process behind how you do win work and retain clients and grow clients and win logos, then it all adds to the picture. So really it comes down to the growth plan and how confident you are in that forecast and how confident the investor will be in saying what you're going to do.

Mike (15:41.208)
Exactly.

Mike (16:06.918)
Absolutely. And we've talked a lot, and I know we've both talked to agencies, separate agencies and the same agencies about the importance of a sales and marketing engine. And when we say that, a lot of agencies are like, yeah, yeah, yeah, an engine is really important for sales and marketing. We agree. Yeah, we do that. Yeah, yeah. We've got some LinkedIn stuff and we've got some campaign. And they have got stuff. The problem is it's not an engine. And it certainly isn't an outbound and inbound engine. It's mainly inbound. It's a reality.

Miles Welch (16:20.044)
We do that, we do that, yeah. Right.

Miles Welch (16:29.834)
and out.

Mike (16:36.486)
I mean, I remember I've got an agency in mind where the MD was the ex -sales director. They grew and they sold. They were a good size. They had a very, very clear outbound strategy and they had five salespeople that ran outbound and they were really good. They were just good old fashioned, traditional in many ways, tenacious, successful outbound salespeople who were good at lead gen. That meant, I'd imagine, I didn't work on the deal, but I'd imagine...

Miles Welch (16:37.196)
And it's, yeah.

Mike (17:05.924)
A buyer would look at that company and go, yeah, they've got a sustainable engine of sales and marketing capability.

Miles Welch (17:13.484)
Completely. You can build this as big as you want, really. I mean, you could potentially have three sales director level people working for you as long as it was bringing in the leads that you wanted. And obviously, as you get bigger, you'll need a bigger team. But I do think, generally, if you look at most agencies, the investment they've made in sales and marketing and the time that they invest in it is...

There's probably a direct correlation between ones that do invest and the ones that don't invest as much and the success that those do have. That sounds obvious, but I don't think people really see it.

Mike (17:51.878)
Yep, exactly. So let's move on to question number two. What are the biggest challenges agencies face with the kind of formal RFP, formal client brief, and the kind of pitch process in your view and experience?

Miles Welch (18:06.508)
That's interesting. I think this is obviously feedback from clients predominantly. I think a lot of them, the biggest struggle I think they have, and I'd love your view on this because you're the expert in how you consult with your clients on it, but they really suffer from not having enough insight and knowledge through the process. So,

They struggle to get to the client. They struggle to ask the questions. They struggle to get the information they think they might need in order to respond fully. And they struggle to build the relationship through that process because obviously, I guess sometimes there's guards in the way of, you know, we've got to get everyone fairly. So they really struggle with that because I think in a non -RFP situation, they've got a sort of direct line to the stakeholder or the sort of economic buyer, if you like, the person with the budget. And...

Mike (18:45.636)
Correct.

Miles Welch (18:59.468)
they can ask the right questions. They can either get ahead of the brief sometimes and go, well, actually, are you thinking about like this? And rework the brief and allows them to set the brief in their own image and get, you know, almost get rid of the competition in some respects when it's competitive doing that. That's the sort of the pinnacle to get to really is being able to get in there and rewriting the brief in your own image, I think. But they really struggle with that. They really struggle with the fact they can't shape the brief themselves.

Mike (19:21.222)
Exactly right.

Miles Welch (19:28.076)
And they really probably struggle with the formulaic way in which the information has been answered and it doesn't get across their own the benefits of working because it's so prescriptive. So I think that's probably the frustration that a lot of people do feel. I feel it's a black hole sometimes and you know, there's not much of a chance of actually winning or much lower chance because there's lots of agencies in there and also they can't really get across the benefits of what it is to work with them. That might be because they again,

not the USPs that you would potentially look at. And they're relying on their personalities and their team prowess in the moment to win the pitch, if you like. I think the other, the main area is getting beaten up by procurement on price. So they've been through the process, they probably won it, and then it gets passed over to procurement. And I think a lot of people aren't trained in negotiation really. They might, you know,

Some people are more commercial than others, obviously, but a lot get beaten up in that process. And they're just happy to win it, right? Because they've gone through that. Work is probably maybe a little bit dry and they'd love to get a win in, but then they end up going to procurement. They're not really prepared for that. They haven't worked out what their entry and exit point for negotiation is, how much they can give away, and that they're unsophisticated in that arena. And they haven't had any training, right? I mean, it's quite normal. So...

Mike (20:54.19)
Exactly.

Miles Welch (20:56.652)
I think that's another area where I certainly see clients and I work with struggle. As in, you know, we've won it, but now we've got to go through and get beaten up by procurement as well. And there's, you know, there's not, you know, I'm sure there are training courses out there, but I don't think many people really think about becoming more sophisticated and, you know, and upskilling themselves in those areas.

Mike (21:19.878)
Absolutely. So a few things that kind of spring to mind based on the work I do with clients in this particular area. One, qualification. So one of the biggest mistakes is they don't qualify things out. Typically, you should be qualifying out 40 % roughly of leads that arrive that are formal briefs, RFPs. So the data tells us about for every 10 that you're working on that come in, four should be rejected and you work on six. That's number one.

So qualification.

Miles Welch (21:50.956)
But there's a definite pressure that there isn't there to fill the pipeline. But what happens, you end up not winning, surprisingly, because it's actually not in your sweet spot. And if you do win it, you then struggle to deliver it because you haven't got the skill set necessarily or the processes to actually deliver what you promised that you can do. Or it's unprofitable because you know, yeah, completely.

Mike (21:53.35)
There is. Exactly.

Mike (22:06.736)
Correct.

Mike (22:11.398)
Be careful what you wish for.

Or you come second and the brand says, you did really well. You know, there was nothing wrong with what you put forward. We liked it. Yeah, exactly. And that's great. But you came second. Please do keep in touch. And you know, that continues and that continues. Um, think the second thing is, is that now this data, you know, you've got to be careful with this data, but this came from a, um, a survey done by a big SAS platform that specialized in RFPs and.

Miles Welch (22:23.34)
and you pat yourself on the back because you came second.

Mike (22:44.39)
Their data tells us that if an incumbents in the pitch process, 60 % of the time the incumbent wins. Now, you know, it depends by sector, it depends by capability type. But even if it's broadly true, let's say half the time the brand reappoints the incumbent. And let's say you're one of five. So now you're not one of five really, you're one of the four that aren't going to win. So...

Your chances of winning actually are something like between 5 and 10%. And Blair Enns has the same kind of thought process. In fact, he made me think it through and I went away and got some data and it all seemed to tie up. It's that your chances of winning, if you don't try and shape the process, if you don't try and disrupt the process in some way, is between 5 and 10%. So those are quite daunting prospects.

Miles Welch (23:39.532)
That's, yeah, I mean, especially when you're aiming for what, 50, 60 % conversion rate. That's illuminating.

Mike (23:43.544)
Correct.

Exactly. So you got a bid for like 20 to probably win, you know, I don't know, two or three?

So they're stacked against you. So there are ways that you can professionally disrupt the process in your favor by adding value during the RFP process. If you're doing government procurement, that's not true because it is extremely strict the way that it's run and there is recourse. But for a commercial organization, there's ways of influencing the process. The best way is, as you said, is you influence the process by writing effectively the RFP for the client.

Miles Welch (23:58.604)
Thank you all.

Mike (24:25.114)
18 months before it ever appears. That's how you really win. And you do it with procurement. You don't wait till the end to get procurement involved. You do it with them.

Miles Welch (24:36.108)
Very interesting, yeah. That means building very strong relationships, isn't it? And again, there's another area I think that agencies aren't particularly good at is they will build a relationship of delivery and service with their contacts. They won't necessarily always go beyond that and try and influence the organization. And...

Mike (24:41.604)
Correct.

Mike (24:54.47)
Correct.

Mike (24:57.862)
If you asked 100 agencies, do you run outbound campaigns to your CMOs, brand directors? They'd be like, yes, of course we do. That's how we tend to win new logos. I'm like, okay, at the same time, do you also run campaigns for the procurement directors, the marketing procurement people that run that category inside those brands? How many of those marketing procurement people do you know? Hardly any.

Miles Welch (25:27.212)
and with your existing clients doing the same thing, right? So how do you get across the successes, the case studies, the metrics that are attributable to you and the organization? I think what most people do is they do a very successful piece of work or campaign. They, you know, celebrate it internally as in the agency celebrates it, but actually how quickly does a client forget about that success, right?

Mike (25:37.958)
Correct.

Mike (25:53.124)
Yes.

Miles Welch (25:53.676)
How do you get those success stories across the organization in the triple tupit to you?

Mike (25:57.51)
Exactly. And how do you leverage that miles? I within an account, yeah, let's say you're working with a big global brand and you've won some work in the UK. Well, you've then got the European countries to go for, and then you've got North America, and then you've got rest of world. The way, what's the often the common connecting part? Procurement is a common connecting component between those different geographic entities. Yes, the brands are as well.

But the procurement people will talk to each other going, we got great value and great ROI from this team on this particular problem that we're solving, great outcomes. So I recommend that if we're building a regional PSL, then we should look at this agency for a more regional rather than more local. Now, yes, there'll be pressure on commercials, of course, but you'll get more of the pie.

Miles Welch (26:34.828)
leverage.

Miles Welch (26:49.108)
completely. So the thought process there should be, you know, how do I either work with my contact to do that and to spread out and meet procurement and meet other influences and other sectors, other brands within the portfolio? Or do I work through them as it all around them or with them?

Mike (27:05.69)
Exactly. Correct. And there's different strategies for each account because some cultures inside big organizations, they actively try and prevent you from working with other departments, other divisions, other brands within the group. For all sorts of reasons. Yeah.

Miles Welch (27:19.916)
or they want you for themselves.

Mike (27:23.782)
So interesting. I'm sure we could carry on at that at length, but let's go on to question three. So a lot of negotiations are all about one side winning over the other. So what's called value claiming. However, the best negotiations I've often seen are about problem solving together. We've talked about exploring options, creating more value for both parties, not just one. So do you have any examples of where that's the case? And how does this apply when you're helping?

clients sell their agency business to buy us.

Miles Welch (27:58.06)
I think the first thing to say is that, I'm sure you will echo this, but the best negotiations or the best deals or the best outcomes I've seen is where both parties feel they've had to take a step in the wrong direction. So, Nother feels it's a massively great deal, but both walk away with what they want. As you said, it's really a value exchange. They want something, you want something, where's the middle ground? And...

I think being super clear on your thresholds of, you know, this is the minimal walk away with, this is where I want to go in with and, you where's, what are my steps there and what can I ask for to mitigate that being reduced? I think, I don't think people often prep as much as they should do because it's a rush process, right? You know, you're busy delivering a normal client work. This is a different process. It's been very labor intensive.

Mike (28:36.422)
critical.

Miles Welch (28:56.328)
the pitch is tomorrow, you've got to travel to get there, whatever it is. But I think taking however many hours out to actually sitting down and going, what are our thresholds here? Before going in, knowing what our negotiation points are, having rebuttals for those negotiation points is hugely important.

Mike (29:15.718)
So a friend of mine, John Collington, years ago reminded me, he said, he was a procurement guy, a negotiator at scale. He said on that exact point, he said, we have two things. What's our most desirable outcome? What is our least acceptable outcome? So you've got two end stops and that's across each variable. That could be price, it could be length of contract, termination clauses, IP, just list them out.

and then work out what's your most desirable outcome and what's your least acceptable outcome and then play with them.

Miles Welch (29:49.74)
Absolutely. I mean, if you're rate card driven, not all agencies are obviously, I used to have a rate card that was giving me 30 % margin and one that gave me 15%, right? So I knew that I'd probably start off with a 30 % and if they accepted it, fantastic, brilliant, but you kind of know you're going to get knocked down a bit or have to give a discount somewhere. So I would always start there. And I'd know that if I did that, it would give me a particular margin and...

As long as I could keep my sort of capacity plan in the right area, then I would make a good margin. But I will also know that even if I discounted a bit, I knew that would be then 25 % or 20%. And if there was a particular need to get that client because it was a new sector or an award winning opportunity, then you want to accept the lower one, but knowing that you could bring it back up a bit through other services or cross selling or whatever to get the margins you want. But yeah, it's...

It's easy when you're small, isn't it, to think, well, I'll just take on a whole bunch of work and I'll work out whether I can make it profitable later on or not. But it's much harder to make it profitable.

Mike (30:56.966)
It's never profitable, that's the problem. Ever. It just isn't.

Miles Welch (30:59.468)
Yeah, exactly. And what's the point of servicing a massive client if you're not making any money out of it? It's, uh, yes, there's that there. But, um, I think there's an example, like probably the most, um, memorable one is when I was at, uh, digitass, it's probably 2006, 2007. And, um, we had our, because it was a, one of our accounts, a couple of million quid, we'd had about, about six of those big, big accounts. And, um, they, they, they called up one day and said, look, we want to have a chat because we want to try and.

Mike (31:06.374)
Exactly right, correct.

Miles Welch (31:29.484)
you know, get a reduction across our entire supplier base of 10%. I thought, oh God, here we go. 10%, you know, quite a lot of our margin network agency, 16 % margin, not looking great. So, and again, this is an example of what you could do. It's not, you know, particularly genius at all, but it's just a sort of practical way of thinking about things is that the way I approached it was that I did a bit of research. I knew that, you know, how do I get them what they want? Because I know they're not going to budge.

They might budge a bit, not going to budge too much. They're looking for a win basically. So how do we give them a win? And we realized that they were doing quite a bit of work with local agencies purely because of, you know, their location, arm's length, you know, maybe particular skill sets as well. And the way that the negotiation went was that I managed to convince them that they could park the work with their local agencies and we would end up doing more.

revenue and therefore I knew I could make more of a margin from that. So even though they got their 10 % discount we ended up doing more work and we recovered the work that we would have lost as a result of that.

Mike (32:28.006)
Yep. Exactly.

Mike (32:38.246)
And just on that point, so what you mean is the absolute level of profit you made in terms of dollars increased, albeit the margin has been compressed.

Miles Welch (32:47.884)
Exactly, exactly. So because we're doing more volume, we were able to extract more margin from that and get back to roughly the same place we were before on a sort of gross profit level. So exactly. So I think, you know, you've always if they're after something, you understand, first of all, what's behind it? What are they trying to achieve? Is that the real question they're asking? Or is there something else in there? And there's I'm not saying there's always a way, but.

Mike (32:51.174)
Yeah, exactly.

Yeah, perfectly good trade.

Miles Welch (33:16.396)
you've got to try and look for a win and make sure that you're giving them what you want, but also you're trying to get what you want as well. So that was kind of my example, I guess, of where that's worked before.

Mike (33:23.91)
Yep. Exactly. And also maintain the relationship. You know, look at any negotiation... Sorry? Exactly. Correct. Look at any negotiation theory. We'll talk about the relationship and strategic negotiation. You've got the relationship aspect and you've got the substance aspect, i .e. what you're negotiating around. Maintaining the balance of those two is critical because if it goes too far the wrong way...

Miles Welch (33:28.844)
completely and deepen it right yeah absolutely deepen it yeah

Mike (33:52.198)
then there are consequences on the other side of the deal that you struck for both parties. Because ultimately, they're going to come back. I remember talking to a really capable guy who ran trade advertising for an enormous media platform. They said, look, those deals that were done 10 years ago back in the day when we do a deal for advertising slots and you do it at a certain price with certain terms, if that was too onerous on one side or the other, when you came back around next year,

to talk again, well, they just kind of take vengeance basically because they've been done over and you're more cautious and you approach it more carefully and you're more suspicious of the other party. So you've got to maintain a balance of the relationship and the substance and knowing when it's time to yield and when it's time to dig in.

Miles Welch (34:49.132)
Yeah, completely. I completely concur with all that. Yeah.

Mike (34:52.614)
So Miles, of all your experience across all, this has been fascinating, thank you for taking the time, across all, you genuinely, because you've worked in the agency for such a long time and across buy side and sell side in terms of agencies. What are the kind of two or three things you'd say to agency leaders that are listening or any professional services firm that's listening about, you know, focus on sales and marketing and about kind of negotiating an exit for your business?

What would your kind of top two or three tips be?

Miles Welch (35:24.3)
I think the key thing is the confidence that you go in into negotiations. I think a lot of people go on the back foot. Confidence is a funny thing, isn't it? I don't know if you follow the Modern Wisdom podcast. I think it's great. He has some really interesting denials. Okay, well, I'm repeating myself. But one of the things that, I think it's Chris Williamson who's the guy who does it. But...

Mike (35:39.302)
Yes, I do now, because you recommended it. You told me and I listened to it. It's brilliant. That's really good. It's very good.

Miles Welch (35:50.7)
One of the things I think really stood out for me was, um, he talks about confidence, what is confidence? And it's something like, you know, having a stack of undeniable evidence that you are who you say you are. And I think that that's the thing to think about. We know what are the things that are different and special about my business. And you might, you know, you might, might need to develop and create those over time. But I think if you can walk into a situation, whether it's sales and marketing, whether it's, um, you know, conversation with an investor.

Mike (35:55.27)
That's right.

Miles Welch (36:20.108)
that, that if you can back up that confidence, um, with real things that are, you know, real differentiated, real growth nuggets for you and for them, then it's a much, much better and easier place to be starting from rather than being from the back foot and having to sort of almost, you know, prove why you are special and why you are different and why they should buy you. Um, so I don't think people necessarily focus on developing those things over time. It very much is, you know, we'll get to a point where we're,

Mike (36:42.306)
Exactly.

Miles Welch (36:49.996)
a certain size and profit and that's kind of where we are. And that might be enough for some people, but I think to really stand out in the marketplace, you've got to have that confidence and be able to really back it up. And I think that's probably for me, one of the biggest things that agency leaders and shareholders can start thinking about.

Mike (37:12.006)
Definitely. And I think if you look at that evidence thing, just to point going back to RFPs, I mark RFPs for people. So people would give me their draft RFPs or their client brief proposals and I'll mark the homework. The number of times, and it's probably 90 % of the time that I review them, what's often missing is the evidence base to support your claim. Making a claim that you do something is all well and good.

But if you're talking to a rationalist on the other end that's reading this thing and you can't support your claim through evidence, then I'll be more suspicious.

So you have to give the evidence base. Yeah, correct. Yeah, exactly. So that confidence that you portray around data points that have evidence base set behind them gives you a lot more confidence and it gives your counterparty a lot more confidence as well. Miles, it's been amazing. Thank you ever so much. Where can people find out more about you?

Miles Welch (37:50.796)
And that's the person, that's the type of procurement people, isn't it? They are rationalists, they're analysts, they're analytical individuals, evidence -based.

Miles Welch (38:10.7)
I'm saying.

Give us a big one, thank you.

So.

Mike (38:17.222)
Where can people find out more about you?

Miles Welch (38:19.442)
Well LinkedIn is a good one or you know our website which is milestone advisory just Google that and yeah get in touch through LinkedIn.

Mike (38:30.756)
Miles, what's a good time for an agency to contact you? Because they probably think, oh well, you know, if I'm not selling for five years, then I shouldn't contact you. When should they get in contact?

Miles Welch (38:40.364)
I think the key thing is the level of ambition that the business has. I think a lot of timelines for people to get to exit and really I kind of specialize in that to last probably 18 months or two years before going to market. If you're a bit too late, there's less that someone like me can do to help to improve the multiple, improve the margins of the business and make it different and special for a buyer. But I think there's no right or wrong time. It's really...

time that people think, look, I've got to get a plan now. It's still two years away, two years later. I'm no closer to getting to a point where I can do something. And I think the point where somebody wants to build a growth plan to get to realize some value is the time to get in touch.

Mike (39:24.902)
Very good. Miles, it's been a real pleasure. Thanks everyone for joining me.

Miles Welch (39:29.004)
Thanks Mike.

Mike (39:31.11)
Okay, let me stop recording. Let's just check that the...