“Making a Difference” with Drew McLellan from the Agency Management Institute

Each week on Making a Difference, our host Mike White talks to experts in the media industry. Today, Mike talks to Drew McLellan from the Agency Management Institute. Agency Management Institute or “AMI” is a consultancy/educational organization designed to help independent agency owners run/grow their agency in a more profitable, stable way. To learn more, visit https://agencymanagementinstitute.com


So tell us about the agency Management Institute and what services you provide your customers.


So Agency Management Institute or AMI basically accepts the reality that for most agency owners, they’re accidental business owners. They were great and are great at the client facing stuff, but a lot of times running the business part of their business is not what they went to school for, it’s not what they studied as they were coming up in their career. Somehow they ended up owning an agency. We help them run the business. We teach them agency math, the metrics that matter to making a profitable agency. Helping them figure out how to hire, when to hire, who to hire, those sort of things. We teach a lot of workshops around subjects like how to write proposals that get purchased, those kind of things.


Are there certain non-profits that stands out, that you really enjoy getting involved with and understand and appreciate the values they deliver to the community?


Yes. So I am a firm believer that we should support the communities that we live in that we have a responsibility and an obligation to give back and to use our time and talents and treasures when it comes to money to help our communities be better places. We have a program called Adopt a Charity where we literally have charities apply every year and then we adopt them as a client for a full year so they get about one hundred thousand dollars of free agency services and then at the end of the year like a baby bird we sort of send them out of the nest so we can get the new baby bird. So a lot of those charities have become sort of close to our heart because we spent time with them one of them is a charity called YESS, or Youth Emergency Shelter Services, and they take kids in who are at risk. They might be homeless, they might be in an abusive situation at home, they might be just having conflict with their parents and need a break from each other. Sometimes it’s court appointed but it’s a safe place for these kids to live and go to school and go to counseling and help them get back on their feet.


When agencies come to you, what are three things that causes them to fail at first that you’ve seen with your experience.


I’m going to say this is not a first year thing. I think there are many agencies that have been around for 20 years that still struggle with working super hard, but can’t seem to be profitable on a consistent basis. One of the metrics that we recommend is that every agency should be able to make 20 percent net profit. Alot of agencies will say, well I’ve never even gotten close to that. So part of that is they don’t understand how to look at their PNL now from an agency lens and see what it tells them about how they’re running their business. Number two probably the most violated metric of all agency metrics are that an agency should have a hundred and fifty thousand dollars of AGI per full time person. Most agencies are overstaffed which is exactly why they’re not profitable. And the third thing is most agencies rely on referrals as opposed to having an actual new business program that they are executing every single day to make sure that the sales funnel stays you know fat and happy and fed. I think one of the things that we’re seeing is clients are taking a longer time or prospects or taking a longer time to say yes and an even longer time to sign the contract or the scope of work. So you’re just gonna to have more at bats so that you are constantly winning enough business to feed the family.

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