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Erik's Marketing Agency Triumph Scaling to $500M and Beyond
10th December 2023 • The Google Ads Podcast • Solutions 8
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Kasim and Ralph sit down with Erik Huberman, the founder and CEO of Hawke Media, to talk about the challenges agency owners face as they scale their business. Erik also shares the strategies they employed to build a $500M Marketing Agency. From the importance of authenticity and expertise to the power of effective communication, Erik unveils all his secrets.

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3 Steps to How Erik Huberman Built a $500M Marketing Agency | EP 515:   

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0:00 Erik's Marketing Agency Triumph: Scaling to $500M and Beyond

3:33 The importance of margins

4:45 Good communication trumps good marketing

7:34 Specific processes for good communication


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Transcripts

Kasim: 00:00:11

So talk to me about that stair step of growth for agency

2

:

owners that are listening here.

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:

, I think a lot of them are sort

of stuck at individual levels.

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:

Like it's always, I don't know who

said it, but it's every time you three

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:

X, you basically everything breaks

if not in and around that point.

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:

So zero to a hundred thousand to 300, 000

to a million it just goes on from there.

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One of the things that.

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I think a lot of agency owners really

struggle with is that CX component is

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that customer satisfaction component?

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And where do you double down on

that in that evolution of growth?

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Which is a challenge because

this is a service based business.

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And, going back to Customs original

premise, which is obviously not

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:

accurate based upon your success and

the success of the Baines of the world.

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And the McKinsey's of the world is that

service businesses can't scale because

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you always have that CX component.

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:

So talk to me about each individual

step, like where your challenges

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:

were, if you can remember that far

back, it was CX always a component.

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Of it, or did you wait it more in

one stage of growth versus another?

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And how did you navigate through that?

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I would say we you always need

to do good work people ask,

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like, why is Hawkins so successful?

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It's because frankly, 99 percent of

marketers have no idea what they're doing,

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and so it's not hard to, compete with a

bunch of charlatans, when people come in

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and work with us, they're like, Oh, wow.

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You actually deliver what you say you're

going to the fact that's a novel idea is

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crazy, when I talk to a lot of the new

agency owners, a lot of times they don't

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actually know anything about marketing.

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There's no barrier to

entry to start an agency.

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They see a Tai Lopez video and

they go, Oh, I can start one too.

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And then they see, we talked about

this before getting on, but like

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someone driving a Lamborghini

and talking about their agency.

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And it's Oh, that could be me.

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I was like Whoa, Whoa.

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You forgot the key ingredient here.

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You need to actually know what

you're doing in marketing.

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That's important.

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I know that there's no barrier.

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It's crazy to me that need a license

to cut hair or actually deliver

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milk in the U S but you don't need

a license to manage half a billion

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dollars in marketing budgets.

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It's absurd to me, but here we are.

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That has been one of

the biggest challenges.

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And that's where I see a

lot of agencies struggle.

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That's number one.

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It's like you're churning through

clients because you're not doing good

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work and you can only keep up so fast.

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At some point you hit.

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You can only bring in so much business

and you're losing it all the back door

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and you hit this, equilibrium where

you can't grow the business your

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sales can't keep up with your churn

and that is a rough business to run.

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And that's why you see a lot

of burnout and agency owners.

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You see a lot of plateaus like that's

number one, if you're not able to keep

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your business now, that being said, we

deal with churn too, because we also work

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with small and medium businesses that

they, by nature are all over the place.

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And so regardless of how well

we're doing a lot of times,

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small and medium businesses.

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Are shifting.

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So if that's, let's assume you're doing

good work and that's, table stakes, the

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next piece is having that sales funnel to

replace that business and to keep growing.

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And I'd say that's an important piece

that I know we've really nailed in terms

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of we've been able to grow a lot because

we're able to, drink our own punch.

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Turns out we know how to do marketing.

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So we market ourselves and it works.

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And then the last piece of that I

think people miss is the margins.

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lot of people don't understand the

importance of having decent margins on

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your agency so that you can reinvest

in marketing sales so that you can

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invest in the future so that you can

invest in growth and hire people and

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have some bandwidth because a lot of

people don't think about that ahead

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of time and they end up a slave to

their own business because they're

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paying their people way too much.

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Like we saw it in the

Rick great resignation.

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We refused to pay these rates that we

were getting competitors paying because

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we knew it didn't pencil for the business.

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We're like, Hey, if I get it, if you're

going to make three times as much money

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in another company, go hope it cope.

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It lasts six months and you've

got a year and a half of pay.

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Like I get it, leave, but

we're not going to match that.

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we have our MNA side.

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We look at hundreds of agencies books

throughout the year, if not thousands.

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And there are a lot that ended up

giving these raises and promotions

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and paying people too much.

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Now they can't run a profitable

agency because there's no way that

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they can charge clients enough

to then build that person out

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enough to actually make any money.

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And so margins, marketing, and client

retention, I'd say, are the three.

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Now, client retention, again, servicing

them well and communicating with

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them well are the two biggest things.

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Communication, I think, actually

trumps actually doing good marketing.

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If you're good at communicating

and aligning and talking to your

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clients, you'll keep them longer.

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We've seen this in the data constantly.

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If we're good at communicating and talking

to our clients, they're going to stay

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a lot longer regardless of performance.

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And so that's key there.

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And then if you go over those three

things, I think you're actually

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going to be doing all right.

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Y'all, this is maybe the most

important thing that's ever

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been said on perpetual traffic.

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Hey, so if you're listening to this

and you're an agency owner, honestly,

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if you're a business owner, stop

the car, pull over, write this down.

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Communication is more

important than good marketing.

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communication is more important than

deliverable, and I've seen this too.

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My biggest fail point in early stage

at Google Ads, we were phenomenal.

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We crushed life.

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But we spent so much time,

we're deep, dark, cave dwelling,

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nocturnal, over caffeinated

engineers that like to work at night.

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And so we're sitting there really

doing the work, but not telling the

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client we were doing the work, and

the client was always pissy with us.

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And then we got really good

at communication, and they

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preferred that to the good work.

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I can do C minus work and good

communication and rather have that than

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A plus work and B minus communication.

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It's so critical.

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Build that into the fabric

and ethos of your business.

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It's important to understand as human

nature, we use logic to justify emotions.

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If I feel good about you, I'm

going to find a reason why I

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want to keep working with you.

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If I don't feel good about you,

I'm going to find a reason why

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I shouldn't be working with you.

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And so making sure you like the

communication side plays to that emotion.

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Why are people hiring you?

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Because they don't want to manage this.

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It's a bandwidth or expertise thing.

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They either need bandwidth because

they don't have enough time to manage

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all their marketing, even if they're

an expert, or they need expertise

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because they're not an expert.

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So one way or another, you need to satiate

that desire to be like, I need help.

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And so they need to feel like

you're that one, that you're

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better at doing this than they are.

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You have taken this off their plate.

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And you are the expert and you

are helping them save time.

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And if you don't fulfill that,

you're out and they're going

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to find a reason to be out.

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Dude.

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That's another writer downer.

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Agencies are banned with your expertise.

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That's it.

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Or actually we always talk about

bandwidth expertise or a punching bag.

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Some people just want to

hire someone to yell at.

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that's a little bit of expertise though.

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I need you to know how to take a punch.

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Yeah.

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Touche.

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That's fine.

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That it's even if you're not getting

the success, it's having the enthusiasm.

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And the idea is to say, all right we tried

this didn't work, but here's what we're

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going to do next because we actually care.

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And it's like the thing that ends

up being the real linchpin for

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retention is that these guys just

give a shit, like they actually care

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about what it is that I'm doing.

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Here.

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you can infuse that in your smaller

agency, that's one of the keys

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to successes is what I'm hearing.

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How do you do that, Eric?

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What specific systems do you have in

place to process size communications?

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There's something like that at

Hawk, or is it just I hire smart

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people that know how to do this?

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No, we have a ton of process to it.

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And we have a whole AI system

that monitors our client

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communications and flags.

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When we flag correlations between

when we lose clients and what the

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communication was like, and so that

we can actually say for example, we

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thought apologies would be a bad sign.

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If we're saying, I'm sorry, and our

communication will ship, we screwed up.

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And so we monitored all these apologies

that were going out and then we monitored

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how the clients retained and we found

actually apologizing did the opposite.

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When we take ownership and

apologize, clients were like, Oh,

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you actually took ownership and we

can trust you because you actually.

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Owned it that actually had a positive

effect on the relationship, even though

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we were apologizing because we made

a mistake or something happened, the

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fact that we just apologized actually

retained clients better, even though we

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thought it'd have the opposite effect,

which meant, so we're apologizing.

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We did something wrong.

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We're going to lose a client.

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It was the opposite.

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So it's things like that we actually

monitor using AI now that allows

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us to actually See what is causing

us to lose clients and your tech,

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or is that something we can go by?

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I don't know if it's public yet.

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I can't share it yet, but it's a

friend of my co founders that we

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installed and it's pretty cool tech.

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It's not being used much in

the agency world, but if I

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can, I'll follow up with that.

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Dude.

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We'll pimp it out all to death cause

I'd be the very first public customer.

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That sounds amazing.

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. It's not even sentiment analysis because

not giving us a dashboard of here's

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all the sentiment of your clients.

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It's literally like these things

were said heads up or when

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we set up all the triggers.

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So like we haven't responded to

a client in 24 hours is a trigger

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which we know is kryptonite.

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We're not responsive game over.

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And so now we have a trigger to let us

know if an email is et cetera that then

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pings the person goes, Hey, heads up.

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Yeah.

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This person hasn't been responding

to you need to get on top of

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