Expert of the Month - Paul Stephen - Sagittarius
VIDEO: 52:28 mins
AUTHOR: Robert Craven and Paul Stephen
Our June Expert of the Month is Paul Stephen of Sagittarius. With over 20 years in marketing, Paul is one of the UK's leading experts on digital marketing. He oversees the agency and often lectures and consults within the industry on digital and marketing related subjects and has a particular interest and skills in the travel and tourism sectors.
Paul operates nationally and internationally, helping brands to think outside the traditional horizontal and vertical channels and transform their business with creative multi-channel marketing and digital re-invention.
Robert and Paul discuss:
Who are Sagittarius?
Paul's Story
From being a lifestyle business to a big agency
Meeting other peers
Marketing and sales
Retainers and a slow client lifecycle
Niche
Strangers, Friends and Lovers
What’s happening in Sagittarius during the COVID-19 crisis?
What will the successful agencies be doing differently from the rest in the future?
What’s next for Sagittarius?
Paul's advice for other agency owners
Transcription:
Robert Craven 00:45
Hello, and welcome to GYDA Talks and today, absolutely delighted to have with me, Paul Steven from Sagittarius and I met Paul, probably in 2015, 2016. Hello, and welcome, Paul.
Paul Stephen 01:03
Good morning, Rob.Pleased to be here.
Robert Craven 01:10
It's absolutely great. So come straight into it. Just describe, describe what Paul and Sagittarius do in a couple of sentences.
Paul Stephen 01:14
So I'm Paul, I'm the CEO at Sagittarius. We're an agency that has been around forever. I took over in 2003 born out of marketing used to be offline and everything. Well, digital was part of it, but only 25% of what we did when I took over in 2003. And over the course of the last 20 years, become a totally digitally focused agency. And now really, our preferred platform of choice is Sitecore, which is an enterprise level customer experience platform, and all the marketing stuff that sits around that.
Robert Craven 01:48
How many people have you got?
Paul Stephen 01:52
65, something like that at the moment?
Robert Craven 01:54
And where are they based?
Paul Stephen 01:57
So we have got started in Nashville, but now we have a large office in Shoreditch in London. We have an office up in Leeds, we have an office in Ukraine, and a small one in Sri Lanka as well.
Robert Craven 02:07
Wow. Cool. Cool. So you have been on the whole journey. Were you there at the start?
Paul Stephen 02:13
Yeah, I mean, I've only ever worked for myself, I kind of didn't get a degree. I didn't even go to God, I failed to get into art college twice. It was a complete failure of the education system. And then I've only ever really worked for myself. I'm pretty much unemployable. Now, I'd imagine. And so. So yeah, all along the way. And then I had an agency that I built up and then I had an office in Canada for a while. And then that got sold. And then I came back to just being in the UK. And then I took over Sagittarius, which was another larger agency than mine in 2003, so that the previous owner could retire basically. So yeah, that's so I sort of switched brand but didn't really switch what I was doing. And I've always been the owner or director. And now I own Sagittarius with my business partner, Nick towers.
Robert Craven 03:03
I heard you speak last year about the journey of Sagittarius. And I just like to go. You like to go back to a bit of what you were saying because you were saying something. And just to put me right in what you said you were saying something like you're plodding along quite merrily. And then you suddenly had an aha with a big birthday. Yeah. He thought, hang on. Let's stop being a lifestyle business. And let's be a proper business is that?
Paul Stephen 03:30
Yeah, there were a few things that probably coincided, during the course of the naughties from it's certainly up to 2010. Or by the time I got to do 1010, we got stronger and stronger in digital. And we were doing sort of big enterprise level projects, but essentially are working for good clients and good brands. But essentially, we were still a sort of sub million pound agency. And it was largely because we didn't really have a plan. We didn't have a vision. And we were just bobbing along that sort of 8-9000 team of, you know, 6070, 8020 people, whatever it was, and, and yeah, and yet if the year to 2010 was my 40th birthday. And that was the kind of the moment where I looked around me I'd started sort of meeting other agency owners through Beamer and things like that, and I could see that there were other agencies who had grown far quicker than I had grown and were growing quicker than I had and some had exited and stuff like that. I was thinking, blimey, I've been doing this sort of nearly 20 years and I'm still sort of bobbing along. So I need to pull my finger out so So Nick, and I really kind of from about 2010 had that as you say a harmonic right? Okay, what are we doing? What are we trying to build here? How do we create a serious business? So it was a slight flip from I hadn't really considered ourselves being a lifestyle business. I thought I was working hard, doing the best I could but it was the lack of vision and a plan that probably was the turning point.
Robert Craven 04:57
You would have been on all the courses isn't all the coaching and all that kind of stuff at the time because you're that kind of guy. So
Paul Stephen 05:04
You know, that's the point I hadn't thought about 2010. But just lived in my own bubble really, like most agencies often do is they they kind of they think all other agencies or competitors, or they don't want to talk to them. And they don't stick their head above the parapet. I mean, I was down at the time the agency was buried based in Folkston. And, you know, it was just our own little world. And even though we were working for national brands, we didn't really think of ourselves as we, you know, we we had a very local mentality and almost a sort of reverse chip on our shoulder, if that's a thing that we weren't, maybe, or maybe we didn't think we were good enough or big enough to be as good as everyone else. And then, and in 2011, and 12, we want a beamer award for an app we developed called Headspace, and, and that be the London Olympic app. It was 2012 in in the Vemma awards, and it was about weed can be as good as anybody else. And it was kind of a bit of an aha moment in itself is actually there's no difference between any agency other than the people, it doesn't matter if you're in London, or Folkston, or Asheville, Leeds or wherever you are, really your agency is only as good as the people and the work that you produce. So that was again, all part of part for a turning point. And then it was a matter of trying to put a plan together we're okay, how do we get to where we really want to want to be? So
Robert Craven 06:25
We're just gonna keep going on this because there's people listening, watching, in that, you know, 7, 10, 15, 20 person bit, and they're getting up really early in the morning, you know, and they're going to bed really late at night. And they're talking to their partner or not talking to their partner, and they're having sleepless nights. Because it's like, it doesn't matter how hard you push on the accelerator that the vehicle will only go so fast, almost like you get wheel spin. So it's almost like you go faster, and you go slower. So you spend your as you as you say, this bubble where you assume that what you're doing right? I'm just fascinated about what it was that that happened? Was it just seeing other people going?
Paul Stephen 07:14
Yeah, it probably was my peer to peer meeting other peers. And I, you know, I can remember when we were that sort of size, working till two in the morning at my office down in Folkston. Living on kebabs and pizza, and whatever it was because I couldn't go home, I was still having to work. And then I would drive home at two in the morning, get on the next day, go back and do it all again. And I'd probably go in on the weekend and stuff like that. So I definitely did that. And that was horrible, you know, it's not, it was so funny. I think we were a bit sick in the head as agency owners, I don't necessarily look back at that period with that negative because I remember, you know, still as part of running an agency, I was probably enjoying myself, which is mad. But I was definitely working hard. But what I wasn't really doing was working cleverly. And what we hadn't done at that point really was, ironically, we didn't really have a marketing plan. And this is the classic thing I see amongst most of the eight most agencies is that they hadn't really decided what our proposition was and who our market and our target audience was and why they would come to us. And that has been our story since sort of 2010 really has been clear, focusing on less things, deciding who were the ideal agency focus, agencies come in all shapes and sizes, everything from a one man band to hundreds of people global size and everything in between. And just as a small little business will want a two or three man band aid through to a three man a man band agency, to be able to kind of give them all the love and do everything I need and build on my website for 1000 pounds or or less. Equally, if you're working for Tesco or a big brand. They don't want a three man band, they want a 80 man band where you've got account managers, project managers, QA is on all the things so it's about fit. It's not about are you a good agency or a bad agency? There's different agencies that require different people. So we had to decide, well, who are we right for WhatsApp? What do we fit? And maybe that was what we fit right now? And therefore that's the people we need to get in front of and what we are trying to get to so therefore, how do we get in front of those people to make sure that we fit in?
Robert Craven 09:32
I'm sorry, I've stood apart here because we've all sat in rooms, we've all been up all participating in the great business plan, you know, which normally has a hockey stick in it, which normally goes well things are gonna get a bit worse. But then product x or customer x is going to appear and they're going to be 100k a month data. And that's how we're going to get to 5 million and up a time, it kind of seems to make sense because we've done the, we've looked at the market, we've differentiated ourselves, we've segmented the market, we've created the offering, we've got the right people in place, we've got the case studies in place, we've updated the website, we've got someone in charge of biz dev. But nine times nine times out of 10, despite people's best intentions, it doesn't work. And yet, you're, what you're suggesting is you, either you were the one in the 10, or you were clever, although as luck, or you were more realistic, you did it thoroughly. I'm just trying to understand.
Paul Stephen 10:45
All those things you said happen to us differences, we had to be relentless, and we had to survive. So what we had to do is, so you know, probably starting in 2010, we decided, okay, we need to limit what we're doing, we can only just do these digital services and not do social media or apps or whatever, we're just going to limit. So we're going to do really good stuff. And then we're going to focus on a couple of different key sectors, because we've got some clients in those sectors, so we can prove, you know, our credibility, and we can add value to those conversations. So all those things will help improve our ability to win those pictures and be able to charge a bit more because we're, you know, we're strong in that area. But so we decide all that. And as you say, you go, right, okay, what's the marketing plan? What's the thought leadership ideas we can do? What events are we going to do? How are we going to build our database that we're going to expose ourselves and our propositions about getting our platform ducks in a row like that. But what I tried to stress to people is that then it takes time. So from the day you then make those decisions and get all your ducks in a row, it then takes probably two years before the first inquiry starts coming in. Because if you announce that we're okay, here we are. We're Sagittarius, we're specialists in travel or whatever. So you get all those things in place, you then start going to those shows you start doing and people don't all of a sudden start going, Oh, can you do this for we can do that for me, they take a while. So you know, even if they are in the first year, people start making inquiries. By the time you've then pitched for that. And then you want that because you converted it and that first invoice goes out, it's probably two years since you actually decided you were going to become a specialist in something. So where we had the problem is we that's one. So our growth didn't start till then 2014, even though we started it back in about 2010, to 2010 to 14 was a transition period of helping that momentum, you know, given time for that momentum to build up. But also we then had all sorts of structural and difference in changes internally. And the way we know, there were other sort of more operational changes that happened alongside the marketing.
Robert Craven 12:50
It's this, this kind of flywheel analogy about incredible effort to actually get the thing to get the thing moving. But if you can get it moving, then the momentum starts taking place, and then it has the opportunity to build. And I think the message that I'm getting from you is that way too many agency owners and leaders go away, do the strategy away day, and they get to the end of Q1. You know, we're clearly everything isn't in place yet, blah, blah, blah. And they and they get despondent because they've been sold this dream on Facebook about doing these 10 things to quadruple your income in 30 days, or your money back type mentality. And we've all we all kind of think there's a there's a acyl silver bullet, we all think there's some magic squirrel, we can chase.
Paul Stephen 13:41
which I think I think there's obviously if, if you're selling 100 pound 200 pound product, then maybe you can have a marketing plan that then gets fairly, you know, immediate response, you know, and, and something like maybe selling SEO services where you can keep a low barrier to entry, you can get a faster sort of a faster response than I've described. Whereas what we were trying to do was position ourselves where people were going to spend at the time minimum of 50 grand with us a year. So now it's more than a minimum of 150 grand a year. We're not that kind of qualification threshold. So people who are going to spend 50 or 150,000 pounds a year not doing that every month, that's something they're doing once a year or committing or changing agencies a long time out. So that sales cycle is a really long time.
Robert Craven 14:31
Or, I mean, all the big clients that I've worked with, the blue chip clients, it's always been we'll try and fit in next year's budget. It's like what do you mean you're trying to fit it in next year's budget? Why are we doing it now? And it's like you don't understand we have a five year cycle into year three reconsolidate.
Paul Stephen 14:49
The larger I think the larger you go, the slower that process becomes. Yeah.
Robert Craven 14:52
I think about working with Barclays with Google was all kinds of people who just Just, that's the speed they work out, they have a quarterly marketing meeting a quarterly training meeting, they have a six monthly plan, they have a five year plan. And, and it's not that they're not interested, it's just that that's the speed. I think it's probably better now, funnily enough, I've just come, just come off a call with Microsoft. And, you know, I think because of digital transformation, and so on and so forth, I think things can move quicker. But the accountants are still there with a vise-like grip on spreadsheets. So let's just move on to one of the things I always talk about is that a niche is fantastic, a niche within a niche is even better. And whether that's by technology stack, or whether that's by my marketplace. Whenever I think a Sagittarius, rightly or wrongly, I think Sitecore and I think travel travel industry. I mean, I mean, I'd be really interested to know how much of your work is in those fields. I'd love to know,
Paul Stephen 16:02
The year end, we've just finished them 25% of our work was in travel. Yeah, if you're going to travel, that's all they know, because I didn't tell him about the other stuff that I do. So our marketing is quite focused. We started travel first as our first set specialism. So that is what some people know us as. And that was always the challenge. When you try to create a proposition or a marketing plan, you can't be all things to all people, that's the thing you're trying to avoid. So for some people, we've had to pick our battles. And when someone says, Well, what do you do? You say, you because you can't have an elevator pitch who says oh, we work in this sector and the sector and the sector and the sector. And we do, that's not an elevator pitch here, you've you've just lost it.
Robert Craven 16:43
We govern organisations, charities, medium sized businesses, large businesses.
Paul Stephen 16:49
It just doesn't work. So but you can be a specialist to more than one type of group. So we are specialists in travel, and we market ourselves and go to the shows, and we're well known in that area. But also, probably 40% of our work is in manufacturing construction. And there's a load of brands there that will only no set of terrorists for that. And we also work with universities and charities as well, some third sector work. And then that's it kind of at the moment. So we're only really three kinds of key camps from a sector point of view. And then as you say, niches within a niche, then we also have the technology stacks are services that sit within that. And so therefore, if you're on travel and you want to use Sitecore, then we're almost the leading agency in the world, not just in the UK, because we've actually got more travel brands on Sitecore than anybody else in the world as an agency. So and that's been the story of our successes since 2014, is that as we started to build momentum of having a reputation and being seen as specialists in certain things, what's happened more and more and still seems to be still, is still the case is people come to us our inbound leads, they come to us because of what we are because we are a specialist in their sector. And because we work on site calls and they want customer experience or CRM what it is. So that's a massive change. Because it means that if I look back at the one the new clients that we've won, and the projects or whatever that we've won, we we kind of have pitched but we're kind of they came to us and if I was wanting to work with us, and I'm not saying they didn't we didn't have to arm wrestle over rates or day rates and whatever. But they almost said, look, we want to work with you. We're not unhappy with the agency that we've got at the moment. How can we work with you to make it work, got to get it through procurement, obviously. So we would go through a process or whatever. But you know, as an agency owner, we all hate it. When you get an RFP and you have to dig and you find out it's gone out to 20 agencies, and they're going to whittle that down to 10 to come in will be shut down to the three Oh no, I've got better things to do my life, quite frankly, you know, the 10s of 1000s, I would spend on that I would not draw either approach a brand that I do want to work with and say I'd rather come and do 10,000 pounds worth of free work for you. And then you fall in love with it. I actually use your phrase about turning from people from strangers to friends to lovers all of the time. People look at me weirdly, when I do it, Rob, I'm sure you have to explain it as well. But really, that's what focusing is you want you want you want. You want people to know, if I'm an agency in your brand, you have no idea who I am. I don't know who you are. So we need to we're strangers, we need to get to know each other. So our thought leadership and all of our marketing really is just doing that bit of turning us from a complete stranger into somebody who's a friend, and somebody you trust and you got to get these guys know what they're doing. And then it's our marketing's job to wheel them in and get them into a position where they love us. They want to work with us, even though they're not at the moment they have. They're constrained by German or they're working with their agency and their agency or doing an okay job, whatever, but I want them to love us. Because the moment then that opportunity arises, then they come to us and go, Okay, we want to work with you, I've been meaning to call you for a long time. But then you get into a great conversation.
Robert Craven 20:11
Because there's some research I've just been shown that a colleague here has done. And what he's done is he's tracked now the number of leads and conversion rates against the amount of differentiation. So to put it simply, if you just are a digital agency, you might get 100 leads, okay, but you will only convert maybe 10% of them. So you get 100 leads, that's a lot of leads in a month, but you only get 10 clients. And if you've got three, I think, think three is the maximum number of differentiations, specific differentiations, then you might only get 20 leads a fifth of the lead flow, because most people look at you're not interested. But of the 20 leads, you do get you convert 70 or 80% of it. So what happens is, you're five times less busy writing proposals for Uncle jumped on cobbling and all but you're way more likely converted because you're a bigger fish in a smaller seat. I heard that about the Grow your digital agency, but we've sold 26- 27,000 copies, and the checking strategy journal at the same time, pretty similar book as I happen, but competing with Stephen Covey and Anthony Robbins, and probably only sold 1000 or so because it was just, it was just a small fish in a huge sea and it just got lost.
Paul Stephen 21:33
Yeah, yeah. Yeah. I mean, I don't know the numbers off by heart. But our lead conversion rate continues to improve, we qualify out harder, you're pretty much I don't want to lead I can't convert. It's just a metric that I just, it's vanity really, you know, I know that at the end of April, our stats for last year, where we collected about 260 new leads, or really just contact names from various shows and webinars and bits that weren't in our in our universe at the top as we call it. But of those 260 new leads, we basically had about 80 inquiries last year. At inquiry someone wanted something that we qualified 20 Odd of them out straight away. So we were down to sort of 60, really 60 things that we probably put a proposal together for of which I'm trying to remember the ratios now. It's something like 20 Odd of them. Thought thought thought system. Yeah, so 60 of them were kind of a genuine opportunity. We hadn't qualified them out, though. There was something there. But then only about 40 of them did we actually put a proposal in and of those 40 - 20 We shortlist and we won. We won 20 of the 40, basically, but the 20 was actually for about 10 brands. Because some of the brands had never, we were quoting for different things. So our sort of ratios are sort of, you know, eight to four to two to one sort of thing. It's close to two to one or three to one in terms of our proposal to win rate. And that's really high. That's a good rate. But it's only because the ones that we start at a high level were the ones we're bothering to put a proposal together for, we think we've got a good chance of winning. And there's so many I certainly did for years, thinking I was doing a good thing by the amount of proposals we were putting together, even though I probably didn't think I was going to win them. You know, I was, as I would say, flying a kite. You know, I was pretty out there hoping I would win and by chance Yeah, yeah, yeah. And that's madness. That's where madness lies, really.
Robert Craven 23:44
Because you're trying to be an expert in all these different fields. And you just, you just can't do it. And what actually happened, I think one of the fascinating things I always tell the story of David Gilroy at conscious solutions, and they work with lawyers with between 50 and 100 desks, and they know more about how and the effectiveness of being a marketer in the law firm industry and more about the things which are coming up then the the marketers at the law firms do because yeah,
Paul Stephen 24:15
I mean, I'm using this time right now to join webinars and stuff about travel and about the manufacturing industry and things like that. I'm not, I'm not actually doing I'm trying to avoid doing stuff to do with agencies because actually, I think I know about the agency world already. I want to know about what my clients want to know about what their pain is because then I can look after them.
Robert Craven 24:42
Which brings us on really nicely to where we are. So this has been recorded in June 2020. And we are slowly theoretically coming out of lockdown. The eight bits of the agency world have been decimated as I might quote a specialist niche agency despite what we were talking about, who specialised in hotel wedding venues, you had had 10,15 person agency who've had, you know, 95% loss of loss of earnings, you know, because their niche was was too tight and the niche was hit so badly. they'll recover. But a lot of people, furloughing a lot of staff, a lot of people reporting 30 to 50%, year on year reduction in sales, a lot of people trying to figure out what Christmas 2020 is going to look like. I mean, what's, what good you're not a pure marketing agency or a technology business as much as anything else? Have you seen Sagittarius?
Paul Stephen 25:49
So I'm gonna have to be careful to sound like I'm not showing off. But I can honestly say we've had a, what was the last month and the month before was the best month we've ever had in terms of our revenue, we've actually exceeded our revenue by nearly 10% of any month we've ever had. So that's, it's not me just showing off. It's just kind of the reality of the situation, I'm almost embarrassed to admit it. Because I know other people are sort of far from having that experience. But there's an underlying story there that is part of that that's worth sharing. So one of the other things that we worked out along the way of marketing and specialising in growth, was that actually running an agency is horrifically up and down. Where, where you're, you have no idea what's coming down the line. So trying to sort of flatten that curve, to use a more contemporary phrase was what we were trying to do. So we worked out what we needed to do the ideas, you know, when we looked at everything we did, because if we did everything from SEO and PPC to engineering, you look at the SEO, PPC stuff. And we always had a monthly retainer, we charged him a fixed amount every month, and whatever it was in it. And that was always the bid that, you know, there was never any scope creep that didn't have bugs or something didn't go live like so you couldn't get the invoice. So you think, well, that retainer ongoing model is much nicer than this bit of work over here where it's very project based and up and down, that you can't necessarily easily so easily control. So we consciously decided quite a while ago that we needed to be in a position where we would have clients on retainer as you know, retain teams and retain. And rather than think about it as a project, think about it as more agile longer. You know, everybody wants to be agile. But the reality is, you can't do that on a project because there's always a deliverable and, and a timeline and everything else. Whereas if you want to be genuinely agile, you need a team with two weeks sprints and that sort of stuff. So over the course of the last few years, we've been transitioning all of our clients from from projects to retain work and even new build work, we rarely now instead of sell them a 300,000 pound project, we'll say, look, it's it's 30,000 pounds a month for the next two years, or whatever it is. And then we build a team, we look at what the scope and the shape of the project is, and the amount of hours or days and the type of people is, and then we sell that team that is going to support and deliver that project. So what that meant was that what's meant now is that roughly 55 to 60% of our work every month is an ongoing retainer. So and that's on a contract, which would have had a probably an initial 12 month minimum, maybe two year period, with a three month cancellation rolling probably after that, although we might get them to extend that rather than litigating to that three month period. But it means that then we've got 55 to 60% of our work, we know what it is every month, and we know that's revenue that's booked, but contracted, etc, etc. And then obviously, we're always topping up with the more project work which may come from the same clients because what they tend to do is set a retainer for the sort of bed of stuff, the BA unit stuff they just kind of know they're going to need. And then we layer on top, the sort of more project work plus the new biz then sits on top of that as well. So what that meant was when we entered into COVID, rather than everybody just stopped their projects, or can things they were all like everybody going oh, what are we going to do? And you know, you can imagine every FDA in the land was saying to everybody, right we need to cut costs, cancel the contracts, torture agencies, stop the campaigns, all that sort of stuff. So other marketing campaigns or paid search stuff, yet we had the same experience that that stuff was definitely pulling the brakes on. We don't want to do it. There's no point paying for ads for something that we can't even sell them or whatever. So we had some of that but that only really represented a little bit of our business really. And because we had retained a lot of those instances we then looked at what could we do rather than okay yes point is running a pay per click campaign for you next month. But in those three days and stead of doing that why don't we do that CRO project? Oh, look at that UX that needed to be done. Or let's, let's do the SEO stuff that always gets left to last or whatever it might be. So even with the ones who wanted to sort of pause things, or whatever, we were really flexible on that. I think that was a really, really important part of what we did. We said, Okay, we get it, we understand your pain. We had really good conversations that were probably not even the normal days a day Someone's senior above was coming in saying, how can you help us outside your house because they knew, they knew that they were contracted to work with us. So they had to negotiate. And we were and we were flexible. And we did offer discounts and deferments and stuff like that. But we were able to flex around them and really listen to them and understand what their pain was, and give them and help them and help them get through this. So we didn't see that sort of fall off a cliff for a number of reasons.
Robert Craven 30:56
But the story was, I mean, for a lot of agencies, and I'm just trying to figure out why the difference, really, for a number of agencies was the oh my god, every time the phone rings, there's a client saying, Can we pause services? Now? Is that because of this? Or maybe it's a combination? Is it the size of the clients? Is it the fact that you've set up that this isn't project work from the outset? Because a lot of these agencies, even though they had what they thought was a recurring revenue model, in other words, this is 10,000 pounds a month, you know, and it gets renewed once a year, the client still came to them and said, We'd like to bail out. And we'll come back in six months' time, or, actually, we just want to put a pause on everything. So is it just that the agency wasn't willing to grab hold of the contract? And say, No, you're signed in your committees? Or is it?
Paul Stephen 31:53
Well, we could have done that, but that would have just pissed them all off. And they would have been, you know, that long term would not have been the good thing. So what we did was a bit of both, sometimes I say we, we said, Well, look, we can reduce it a little bit, you know, because it almost felt like the FDA had said to everybody try and renegotiate all your contracts. So if you went back and said, We'll give you 10% off they go. Thank you. And that was it and a conversation because they were able to go back to the FDA go, I got a 10%. And that's good enough. But you got a little bit off, you know, whereas if we'd said no, or if we'd given him 50 would have been the same response, you know, so we felt like that actually giving a little bit meant that that because the CMO who's been asked to cut costs, doesn't want to actually stop what they're doing is the FDA was asking them to do that. So So So, I mean, it wasn't quite as strategic as that. But afterwards, when I reflected on it, you know, because we were doing the same, I was saying to, you know, my f ds, talk to the landlord, see what we can get out and then talk to them. There wasn't. And if they come back with something, I was happy with it, you know, and it wasn't, you know, nobody gave us any fruit. So I think, I think, but now what I think was better though, was that we, we really listened to what their problem was and said, okay, yeah, that's absolutely right. There's no point spending money on it. That's a waste of your money. I wouldn't want we never want to waste their clients' money. But we Okay, well, what's the objective? What are we doing wrong? What's right? Three weeks ago is not what you need, right today. And it's probably not what you need. In three weeks time. This this period of time has been so died that
Robert Craven 33:20
I think part of part of your success there was about you having an adult, an adult adult conversation. In other words, you are being we're, we're a deep voice serious business. And, also, you weren't talking to SMEs, who are like, all the money is, if the boss is any penny that goes out, he doesn't give it to his wife, so to speak. So, they had a longer term strategy, they probably have deeper pockets, they probably recognise the value of giving, but also on your side, because you're, you're talking like grown ups, as opposed to please, please, please don't cut me off if you do. So, there's kind of the two sides of it. So how do you see 2020 panning out there in term, generally for the marketplace? I mean, I'm specifically for you, it sounds like it sounds like it's gonna get better, because travel is gonna come back, if anything.
Paul Stephen 34:21
Yeah, I mean, ironically, Rob, one of our biggest projects is a website for an airline at the moment that's carried on because they want to finish it so that it's finished in July, and then it's ready for everyone to come back and start booking on their shiny new website. And during this period, we've had continued to get inquiries and two weeks ago, we want to a big retainer project for a hotel group. So even, I mean, that was more amazing than me. I mean, it's nuts, really that in terms of this period of time, but actually it's actually a manufacturing and construction and, and those kinds of clients were I think, actually, they some of them had a great I've had a great period, some of them who were already selling directors have sold triple figures of their non best ever month, you know, so that the E commerce stuff has really gone really well for them. And we're really focusing on that transition for brands, from a b2b to B to C, kind of transition, you know, it answers your question, you know, we're in the digital transformation business, really, we help people get more out of digital make whatever it is they do or sell go bigger, better, faster, more. And so therefore, we're in a brilliant business, we all are in this agency, well, we're in a, we're in a, we sell stuff that the world will need. And if they didn't need it this week, there's definitely an idiot going forward in this new new normal, whatever it is. So for me agencies need to be really looking at what their proposition is, is it exactly right for what you know they were selling six months ago? Or does it to be nuanced, slightly different in this new world, or maybe not for long term and over the next six months? For us, when I say we've got, I've never had such a pipeline of inquiries, but my gut feel of any reconverting is zero. So I've got loads of people, we've put out proposals over the last two or three months, including, like that hotel group I mentioned, but my gut feel that I would normally apply against, you know, you've called scored, it is good. Yes. They said they've got a budget, all those sorts of things. My gut is like, well, I can't rely on everything I've learned over the last 20 years, this is not the last 20 years, this is a very different situation. So the chance of that company who I think is stable, and a well known brand, who I know has got the budget and could afford us of saying yes, in the next three, three months, I don't know what number or percentage of gut feel to put against that for my to understand what my weighty pipeline really is. So for us, the rest of 2020 is still about survival. Yes, we've got to hear we've had some great, we were going strong, and we've continued strong, and we're carrying that momentum for now. But my pipeline tails off pretty quickly by September, it didn't go sort of falls off a cliff. And actually from about, from September, October onwards, only 50% of our stuff is committed. But you know, even that there's only 50% Most people give their right arm for that from September through to January. I'm 50% resourced already. So that's not terrible. But it does mean that I've still got the other 50% When these are quite big numbers now to fill. So I still have a biz dev, new beer kind of issue that, you know, maybe a delayed reaction for us as much as I'm sitting here now saying, yeah, we've had a great time. For us, it's about how do we make those steps forward, ensuring that, that we've got the right business to maintain the team, and we've worked really, really hard in the agency to use this time to, if you like, shore up, you know, build up the cash in the bank, make sure that we're in a position that if it does fall off a cliff in September, and hopefully then comes back a bit afterwards, we can ride out that dip, and not have to lay everybody off, etc. We did actually furlough one or two people during this period, someone in our UX department who just there just wasn't the work for them to do. So we took advantage of that scheme, but they are coming back very shortly. So we kind of batten down the hatches like everyone else had to and try to avoid and get discounts. Avoid spending where we could so those sorts of things have happened. But really, we're just banking cash. We're still asking some of our workers that we haven't made any pay cuts to date. But for June, we were saying to people, yes, we're going to make some pay cuts. And we've tried to scale that so that it wasn't like 20% for everybody. It's 20% for some of the higher earners, and then 10% For the next bracket down and maybe only 5% for some of the lower earners. And if we can see that September, October are starting to come up again, then we'll stop those pay cuts. But at the moment, I'd rather you know that for us to make some of those pay cuts is equivalent to 10 people's salaries. So that's what we're telling people, you know, by us all taking a little bit of pain in these tiny colleagues jobs are not at risk. We can keep this amazing team together. And hopefully if we all knuckle down for just a couple of months or whatever it would have come back on we can release that. But at the moment, that's where we are.
Robert Craven 39:20
So as we return to a world where business is starting to open again. Is there something that you think the more general agencies should be doing in preparation for whatever whatever, q3 and q4 have to throw at us do you think, do you think it's, I'm assuming it's not good enough to just do what you did in January 2020. So how do agencies need to someone?
Paul Stephen 39:54
Yeah, so one of the things we're doing is we've tried to use this I mean, to be honest, because we've been so busy, it's been difficult to find On time to do something different or look at, you know, normally you'd say, oh, let's use this time to do to do X or what time you're talking about. So we have those who really looked at our marketing strategy, as we do every year anyway, we know, this is really an exaggerated thing we do every year. We do this every year in March, we look at our vision, traction organiser, as per your system, okay, what's our proposition? What are our uniques? What's our guarantees, all those sorts of things? We think about them every year, and we just say, are they still right? Or are they? Are they in about a step or whatever? And then what? What are our targets? What are our, you know, what are we gonna get from retained business? What's the new big target? And if those new businesses are coming in, what sector they're coming from, and what's, how many of them are, what size and all those sorts of things? So therefore, what is the marketing strategy that's going to deliver that new business, etc, etc. So we do that every year. And when you know that we were doing that in March, when all this kind of thing happens is like, okay, screw that up, throw it out. Let's do that again. So, so that during March, April, yeah. And then you think, well, you can imagine trying to put a marketing strategy in. I mean, Oprah was like, who knows? Who knows what we need to do at the moment. So we didn't exactly park it. But we were, we all had lots of thoughts about what the new normal was going to be in Hannibal and marketing strategy might be, or how we helped the agency survive, but we like everyone else was just, there was no, there was no book to follow, there was no rulebook to follow. So we've all had to kind of see what's going on. I've spent quite a lot of time trying to understand, as I say, what's happening in our customers' markets, as well as our own, and really pull that together. And we've been looking at how we sell things and how we get more creative. I mean, one of the things we've talked about, or we're doing one particular high is okay. At the moment, there is a lot of pent up demand in lots of industries, as they are all coming back. But so every CMO or CIO is going to be going right, we want to get our customer experience, we need to be better at customer service, we need to get this joined up with that we need to get you don't want to run a data centre anymore. Let's get it in the cloud, all that sort of stuff. But at the same time that the FDA is going Whoa, hang on, you want to spend more No, no, no, no, no, no. But we need to just get over this at the moment. I've got salaries to pay blah, blah, blah. So what okay, how do we help with that? How do we and just as we've been flexible as we've been going along with our clients, and that's, that's worked well, for us. So even something like a big project, we're saying to people, okay, a new Sitecore project with the licence, the hosting and the dev or whatever, it's 300 grand in year one, and then it's, you know, 200 grand a year, every year after, but let's not do that, let's say, right, okay, we're going to take that 300 + 200 + 200 of us 700,000, over three years, let's divide that by 36. And then you come up with monthly numbers, okay, you're gonna have a new Sitecore site, including the licence from the builder, it's going to cost you 30 grand a month. And that's something that the CMO can go to the FD with is, as a, you know, this is how we afford to move on. It's not seven underground projects, it's only 30, we need to allow for 30 grand a month, and we will have the best customer to be in a high performing asset, whatever it might be. So that's a way we're trying to be creative about how we take down some of those barriers to purchase, making it easier to buy as well.
Robert Craven 43:13
There's going to be, there already have been casualties in the industry, and that's going to be considerably more. What do you think? What do you think the successful agencies will be doing differently from the rest?
Paul Stephen 43:29
So I think the way we augment their team and sell them people rather than projects, is something that a lot of agencies have worked out to be genuinely a partner with that kind. And we all know any agency size, when you've got a really good relationship with a customer, and you're part of their team. And they see you that way. And I think actually, these trying times, and even reductions in budgets will not push agencies away, I think actually, the ability to work with a remote team has been quite clearly demonstrated. So the idea that an agency can support them and be like piloting. If you're on a zoom, it doesn't matter if you work for the company, or you work for a contractor. If you're there in those meetings every Tuesday. I think there's a great opportunity. I think someone highlighted this to me the other day by saying, Well, yeah, that also means they could go offshore a bit easier, they'd probably be more open minded to that. So maybe that's true. I mean, we've kind of got our own national people anyway to try and help with that. I think one of those they're going to do, I think, is the idea of really having to understand the client's pain is the thing I keep asking them. I mean, you know, I posted on LinkedIn to tell me what you really, really want right now we're all trying to say, hey, we'll give you a free strategy. We'll give you x this, whatever. We can't give that away. Because actually, nobody's really responding to that. It's actually quite difficult for an agency to really understand the pain that brands are under and, and I'm not sure they even know either they kind of don't know what the What the solution to the problem is, and that's hopefully, well, for us and for the successful agencies, they aren't we are part of the solution to the problem, I think, you know, I think there are a lot of senior people in brands who really don't know what to do for the best because the options are there. Obviously, they're trying to keep the wheels running and trying to cash back into their business, keep everybody's job, but actually, they know they need to change or, but they don't know what to do in what order. So for us, the strategic approach and trying to help people with their roadmaps is certainly the first bit we're really trying to help them with, and they want quick wins, you know, our, our, our marketing at the moment is really a lot of the narrative and messaging and it is about getting things up to speed getting bigger, better, faster, bigger, bigger, better, faster, more as quickly as possible, because people will need they don't need it next year they need it. Now we need some solutions that are going to hit our bottom line as quickly as possible. So for us actually looking at things like a big project, which is going to take a year or whatever to get in place. That's all very well. But at the same time, we need on top of that, the kind of CRO, the SEO, the PPC, all that sort of marketing stuff, which is going to content and social and all those sorts of things that are going to give some more immediate results for the brands you work with. For two.
Robert Craven 46:16
More questions. Question number one, what next for Paul, and Sagittarius.
Paul Stephen 46:25
It's a former self in a very strange position. Because even though I'm the CEO, I'm the same as everybody else. I'm working from home. So we're all the same. It's been a great leveller. I think working, working from home. So I have to really think about what's the best use of my time. As you know, I'm usually out and about networking, my job is to be out speaking at events, banging the drum making a noise for Sagittarius, so that people become aware of us in the areas I want them to, to know us anyway. So it's been really difficult for me to do my job. So it's kind of well, how do I do what I was trying to achieve by doing that in a different way. So networking and stuff like that, I've got to rethink that. That in terms of my own personal role. I mean, we, in terms of our general roadmap, obviously, we looked at when this happened and said, Okay, well, our growth, our growth story might have to take a bit of a year out. But actually, at the moment where we're still going strong, who knows, it may end up a year where actually our growth story does continue. And I'll be amazed if that happens, and delighted. But at the moment, we're planning this is a year off, of consolidation and licking our wounds before we can get back to plan a. So that's really the short term, but the long term is still to grow the agency. We're 60 or so people at the moment, and still have aspirations to be double that in two or three years time.
Robert Craven 47:57
And finally final question or questions because it's kind of a question and several questions. What are your top tips? What are your golden nuggets? What are the things you wish you told yourself? All those years ago? So it's really tough? What are the top tips for agency leaders that are?
Paul Stephen 48:17
Yeah, I mean, I'm I suppose I'm repeating myself a little bit. But firstly, having a plan. Firstly, having a plan is the number one tip, I say to anybody who asked me that question, because without our plan, you don't even know what you're heading for. Because if you don't have a plan, right, we want to be this type of agency, or this size, or whatever it is, whatever your vision is, for two or three years time or whatever. If you don't have a plan, you can't build a marketing plan that drives you towards that. You can't articulate that to your staff who go well, why am I here? What's in it for me? Because you haven't got a plan. So you have to be able to articulate that without a plan. You can't sell that to somebody because you can't market it or know you're selling it for. So the plan and having a vision sounds really like it's one of those things in order now to write a business plan or a vision statement or whatever. It's not that complicated, because it is one sheet of a4, right. Okay, these are the core things we're going to sell. These are the core things and there's literally a sheet with five bullet points for each of those items on it. It's not an essay I'm not trying to do in my thesis with a degree. So by having a plan, everything else comes from that and other people who work with you can go oh, okay, that's what we're selling. Okay. Oh, in that case, this is what I want to do. And this is how I build out the team to be able to support that proposition. It is our way to introduce training into the business to support that proposition. So having a plan is the big thing that we never had. We just kind of did good work for good people. And as the referrals came in, we sort of tried to win everything that came across our door. And yeah, then you've got to make the plan. And we have a vote, you know, and again, this is only really taken from the book Get a grip and traction on the EOS system of the weekly month. To the quarterly cadence of making sure you stay on that plan. And during the quarterly away days and all that stuff, which sounds like you haven't got time to do it, but to us if the without it, we wouldn't have us all rowing in the same direction, you would just be an idea in Nick and I's head and nobody else would have that be be rowing in the same direction as us.
Robert Craven 50:20
Absolutely. Spot on. I mean, absolutely. Spot on. That's great. I think you know, that whole thing about taking time to plan it's like, you know, having a, buying a plot of land and some bricks without having an architect.
Paul Stephen 50:36
Yeah, yeah. Oh, thank you changes the play, you know, just to say, really, so you have a plan. I mean, like this period, we've had to do it, we've had a plan. And that was what we're going to work on. So we all knew where we're heading. And what happens with all plans, is you don't quite hit the plan. But my point is, if you start here, and you're heading for here, if you end up over here, then that's fine. You were still reading this treasure list, you didn't end up over here, which was just what some people might have thought we were going. So having a direction of travel is kind of really, really important. And then obviously, like any business owner, you have to then look at it. Okay, this plan is not working. What do we need to get us back on track and hopefully you end up somewhere near the objective.
Robert Craven 51:19
That's brilliant. That's like gold dust. Thank you so much, Paul, a huge thank you from all of us for your time, your wisdom, showing us your guitar collection. And that's brilliant. And Paul's details are on afterwards.
Paul Stephen 51:39
Yeah. Thanks, Rob. I really enjoyed it. I mean, I hope some of what I've said is some little things in there that you go actually I do that or we should do that more or whatever. Anything. Yeah, no, no, anybody wants to reach out to me and ask me a question about any of that and please do it's fine.
Robert Craven 51:55
That's been brilliant. And you know, Paul's business and Sagittarius is for me like one of the case studies of how to grow an agency. So
Paul Stephen 52:04
I was on table with you with Suhaila man Ricky from push. We were all part of your success that we rob drinks.
Robert Craven 52:14
Okay, take care.
52:15
Thank you. Bye