Is your firm too focused on acquisitions while neglecting the power of organic growth?
Kelly Waltrich welcomes John Wernz, a "reformed CMO" who now works with private equity firm Great Hill Partners as an Entrepreneur in Residence. Together, they explore a common pitfall in the financial advisory industry: prioritizing acquisitions and inorganic growth at the expense of developing strong organic growth capabilities. John shares insights from his experience working with firms looking to grow organically and sitting on several industry boards, offering a valuable perspective on balancing growth strategies.
Kelly and John discuss:
0:32 John's current role at Great Hill Partners
1:56 The problem of firms skipping foundational marketing and jumping straight to advanced strategies
4:09 Indicators that show a firm is ready for organic growth investment
5:02 The most common successful marketing channels for advisory firms
6:13 Realistic marketing budgets for firms
8:16 The often-overlooked "soft costs" of implementing marketing strategies
9:20 The importance of having firm leadership involved in marketing efforts
10:03 Why both John and Kelly appreciate working with empowered marketing roles
13:21 John’s "Don't Do That": Getting caught up in inorganic growth at the expense of organic growth
15:26 Why some firms rush to acquisitions before establishing their core marketing
16:38 How to determine if your firm is ready for M&A
19:22 The need to have a defined marketing playbook before pursuing acquisitions
20:18 Why an acquisition integration plan must include organic growth targets 22:06 The benefits of applying recruitment marketing principles to M&A
26:25 John's Final advice
Connect with Kelly Waltrich:
Connect with John Wernz:
About Our Guest:
With over 25 years of experience in leading and transforming marketing and growth strategies for various businesses, John is currently an Executive in Residence at Great Hill Partners, a private equity firm that invests in high-growth companies in the financial services, technology, consumer, and healthcare sectors.
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Wernz (00:00):
One of the coolest things about organic growth to
me, is it in the brand, is itactually ties right into the
culture of the firm. Like, it'smore than just like this tool on
the side. Like, if you have afirm that's growing organically,
I guarantee the odds of thatfirm is more integrated, both
operationally, but culturally,is higher. Like, if you're
(00:22):
trying to like, as these firmsgrow, you're trying to a lot of
people want to grow, but theywant like, to not lose the firm,
right? You don't want to losewhatever makes you special. I'll
argue organic is a part ofkeeping that.
Kelly Waltrich (00:36):
Welcome to the don't do that podcast. I'm Kelly
Walter, CEO and co founder ofintentionally and like me, this
show is no fluff and no BS, justsmart advice to help you learn
from the best and level upfaster. So what are we not doing
today? Let's find out. Hieveryone, and welcome to this
(00:57):
episode of The don't do thatpodcast. I'm your host, Kelly
Walter and I have with me afellow, reformed CMO. John
words, Hello, John. How youdoing today?
John Wernz (01:08):
Good morning, Kelly.
This is so fun to get togetherwith you. I'm excited to catch
up. Is that
Kelly Waltrich (01:12):
a fair way to describe who you are? I feel
like that's how people describeme. I
John Wernz (01:16):
Right. I You never quite Shut it, do you? And
whether it's a reformed CMO, Ithink a reformed even like sales
side, marketing side, all of theabove. Yes, I checked those.
Kelly Waltrich (01:29):
All right, everybody, John and I have a
have a great relationshiptalking all things marketing we
I don't know how we got to knoweach other, but it's been a
great relationship in terms ofhelping each other keep the
pulse on what's happening interms of growth in the industry,
sales and marketing and andacquisitions and everything in
between. And so he's a valuablesounding board for me, and I
(01:51):
want to give you a little bit ofa glimpse into what that looks
like today. So John, tell uswhat you're up to these days.
What do you? What do you? Whatare you working
John Wernz (01:57):
on? Oh my gosh.
Well, it's a long list, solet's, let's not burn the whole
pod talking about that. So mymain job is I work for a private
equity firm. I've been told thatmy title is made up. It is not.
It is an entrepreneur inresidence that is a real title.
Cool. And we're really trying tofind and partner with RIAs, who
are looking to grow organically.
(02:18):
So we're really leaning intothat area. In addition to that,
I'm on a number of boards acrossthe industry, mostly around
organic growth. So firms nameddata line testimonial IQ, a firm
I work with that we both knowreally well. Light Field just
was sold to SCI socongratulations to them. And
then I'm also do some FinTechbanking. So I've got a little
bit of a hand in a bunch ofdifferent things currently.
Kelly Waltrich (02:39):
That's awesome.
Okay, so you have your hand in alot of different things. Give us
a sense of, like, what are youseeing out there? What are some
trends? What are some things weshould be keeping our eye on?
What are some sleeper thingsthat maybe nobody's seeing, that
you are
John Wernz (02:50):
I still think, I mean, I know, and I've heard you
talk about AI and where we'regoing, and I am very excited
about it, but I still see somany people missing the basics.
Sometimes it's hard for me tojump into the advanced bucket
where it's like, people aren'teven crossing those, those basic
buckets. And what I mean bythat, and it's something I know
you, we both talked about atconferences, are there is people
(03:12):
keep skipping foundationalmarketing and jumping into the
advanced pool way before they'reready. And it's I do some of the
board work is in that area. Andso I see these people, they're
like, I want leads now, and I'mgoing to close a bunch of leads.
And you're like, you're I dotoo. I do too. Trust me, we all
do right? We're ROI drivenmarketers, but you're not ready
yet. So I know that's not a newone, but it's amazing how much
(03:34):
it's like, I still see it everyday.
Kelly Waltrich (03:37):
Oh my gosh. You and I could talk about this all
day. You know, as an agencyowner like this is one of my
biggest challenges, because Iknow that, and I have to choose
every day from between takingthe business and not because of
that reason. And that's reallyhard too. You know, I had a
client email me yesterday, andhe's going to know who he is,
because he's probably listeningto this. I love you know that.
(03:59):
But he sent an email, and hesaid, Hey, I'm really worried
about the price of our leadsgoing from x to x. What can we
do? And I'm like, invest in yourbrand, because if all you are
doing is running ads, thenpeople are landing on an under
invested brand experience. And Icannot emphasize how important
(04:22):
that is, and so you nailed it.
You nailed it. For me, I need adrink, and it's only what time.
It's 1023, yeah, we
John Wernz (04:29):
had, we did have mimosas at the last conference
as part of our working session.
So it's okay. It was reallypretty we had a great,
productive session you invitedme to, so that'll work. Okay,
Kelly Waltrich (04:39):
so let's dig into the private equity what? So
you're looking for firms thatare looking to grow in
organically. So tell us aboutthe or organically. You said,
organically, organically, okay,so tell us some signs that you
see from the types of firms thatyou are trying to bring on that
that indicate that type ofgrowth mindset.
John Wernz (04:59):
Okay. A lot of them have tried tests and failed, and
that's not a bad thing, right?
That they are starting to putthe toe in the water and
learning, oh, I don't have theconversion funnel figured out,
or, Oh, I don't have my dripcampaign figured out, or my
technology, whatever it is,that's great. But they're
starting to either test a lot ofthe firms also that are of
interest, maybe have one thingworking, right? They have one
(05:21):
channel, so they're in San orwas, or they're, they have a
digital YouTube that they'repromoting, and it's, they're
actually getting some leadsfrom, like, they're doing
something, well, right? Yeah,something. But like, on, usually
it's one or two, and then our,you know, the goal of partnering
together is, let's make that456, and how do we get that so
we're well rounded.
Kelly Waltrich (05:43):
I love that. I think that's smart. So as you're
looking at firms, usually,what's the channel they're
getting right? If they'regetting something right? Because
I don't have a good answer tothat for the firms that I talk
John Wernz (05:52):
to, no, it's really distributed right. So you'll see
again, the limited firms thatare in San and was continue to
do well. And there's real valueif those programs are a fit. So
we'll definitely bump into firmsthere. There'll be firms that
are doing some type of COI orreferral marketing really well.
Again, usually they only haveall relationship or two, you
know, they have a coupleaccounting firms. They have a
(06:14):
couple relationships, butthey're not really
organizationally scaled in it.
And so I see that, and then I'llsee firms that are perhaps doing
outbound marketing or promotingthemselves really well, and so
that's exciting to see, kind oflike they're getting through
that, like we talked aboutfoundational, and they're kind
of ready to actually take leads.
So you'll see those different,maybe three different buckets.
(06:34):
Cool.
Kelly Waltrich (06:35):
Okay, so I feel like this might be better coming
from you than coming from me,since I am running the agency,
but give our listeners sort of asense of what they should be
expecting to spend, maybe at thefoundational level, and then at
the amped up level when you arelayering in some of the lead
generation components. And Iknow that the ranges are wild,
but just give, give people likea ballpark. I've heard you to do
(06:58):
this before, so I think it wouldbe helpful
John Wernz (07:01):
here. I mean it in.
I don't ever want to undersellit, because this is where you're
always investing in all thedifferent buckets, the
foundational bucket, the lead,like, it's not like, you really
check one off and then you,like, move to the next. Like,
you don't just put it away,right and come out there. Yeah,
I've done it both as a somepeople are as like, well, what
percentage of revenue should Ibe spending? And I'm like, What
I mean is your firm 10 millionin revenue or 100 million? I
(07:23):
mean, it's that's such a wildthing, because it's very to your
point. But I mean, people needto be spending 50 to 100,000
minimum to, really, if they'refrom scratch, minimum, to get
that foundation in place. Andit's often much more. And a lot
of that work isn't just the hardcost, it's actually doing it
right. It's taking that work andmaking it so your wonderful
(07:46):
person at the front desk says itthat way, and the person and
your little call center says itthat way, and the person in
Topeka says it that way, like,that's, you know, part of it is
the hard cost, but a lot of itis the effort to run it through
and be like, Okay, I actuallythink we're 80% tight on this
thing. Like, we've got this,
Kelly Waltrich (08:05):
yeah, and you and I have talked a lot about,
like, it really depends ongoals. Like I have. Foundational
to your point is not apercentage of revenue. In most
cases, foundational startingpoint is like, okay, what are
the goals that you're trying toaccomplish as part of that? Do
you want to walk away, like yousaid, with everybody singing
from the same playbook. Do youwant to we do want to walk away
with your baseline channelsreally up and running and
(08:26):
operational like, what does thatmean? What does that mean to
you? And what does success looklike? And what are your goals?
Because, you know, we have, I'msure you can imagine, I have
firms come into intentionallyevery day with some pretty wild
goals for the budgets they setforth, and I, I'm, you know, me,
I'm pretty straightforward whenit comes to what's possible with
(08:47):
the budget. And I'm not tryingto make a buck, and
intentionally, I'm trying to bereal with firms about, like,
what the work that it takes toget these things done. So So I
appreciate that. I thinkeverybody needs a little bit of
a wake up call in terms of whatit actually takes to get this
stuff done. And
John Wernz (09:04):
don't underestimate the soft costs, right? The costs
of of actually doing the work.
It's not something we're like,here's a check, thanks. Like,
that's not, that's not going toyield a good outcome, and
especially as you get intoactually promoting the firm,
right? So you need some helpfrom the firm on voice and
personality and those thingsthat aren't AI right, that are
right, that are the heart andsoul of what they do, and so
(09:24):
they really need to lean in.
Kelly Waltrich (09:27):
So it's so funny you say that I have a clause in
the intentionally contract thatsays, like, what we expect from
you, and it's very basic things.
It's like, you need to show upfor meetings, you need to answer
our questions, you need to havesomeone available to us. And
I've had multiple firms try totake that out, and that is a an
immediate sign to me that thoseare not firms that we want to be
(09:48):
working with. Like, if you canagree that you're going to be
available to support yourmarketing efforts, then this is
a failure from the start. Ialways that kind of, I mean, it
does. Kind of stink to get thatfar along in the process, and
they're about to sign anagreement, and they're like,
Hey, can you take out the partwhere we have to be involved?
John Wernz (10:07):
I know it's so great. I mean, it's so big, and
I've been so lucky that in theroles might reform cmo life, I
was very much an empowered CMO.
That makes sense and meaning, Iwas given a lot of rope, yeah,
and a lot of ability to dostuff. But I see, you know, you
run a lot of people headingmarketing words, marketing where
it's like they're at the whim ofthe CEO, and he or she may not
feel like it today, and that's arough that's a rough spot to be.
(10:29):
The other one is when you havethe mega brand and CA, CEO who
has some level of notoriety,those people can also be hard to
work with. So I was very lucky.
I worked with a very much agroup in my career that people
were all leaning in and I wasn'tfighting that fight, but I see
lots of people fighting thatfight for attention. Yeah,
Kelly Waltrich (10:51):
it's interesting. I just had Eric
Clark on as a guest. I thankedhim on the podcast for that very
thing, like realizing, you know,after starting intentionally,
how lucky I was to be asempowered as I was and
autonomous, and that that is arare find. It
John Wernz (11:06):
is, and you and I are both picky, so we, you know,
you and I probably require somelevel of that at some point in
our career where it's like, Ican't play that other game very
well, so I need to have somelevel of autonomy. It was great.
I had so much room. But therewas a couple of times a year
where my colleagues or themanagement team or the CEO would
give just a little tug on therope, yeah, and I listened. And
(11:27):
so usually when they did, it waslike, oh, I should probably
like, oh, I would think I'mmissing something here. It
wasn't like, ah, what are theydoing to me. It was like, oh,
like, they're usually leave mealone. So if they're actually
going to make a point, I betterlean in and really understand
it. And a lot of times therewas, like, huge value, like,
blind spot missed, or teammissing something. Yeah,
Kelly Waltrich (11:47):
and I coach a lot of marketers these days, and
I feel like I'm always tellingthem that that is something that
you look for in a CEO whenyou're when you're joining, but
more often it's earned, right?
It's I feel like my relationshipwas with Eric was ask for a
little prove, a little ask for alittle prove, a little ask for a
(12:07):
little blow the doors off, nothave to ask anymore, you know.
So it's definitely, I feel likeyou CEOs, you definitely know
which way they're they're goingto go, and if they have the
ability to put the trust insomeone, when you take a job, I
definitely tell any marketer,any good marketer that I that I
mentor, to look for that. But itis an earned situation, no
(12:30):
matter where you work, I think,or what role you're in, right?
And
John Wernz (12:37):
it's, it's something, yeah, you have to
understand, this is a, this ismaybe a horrible story. This is
when I was in my agencyenvironment. This is years ago,
Kelly before, like the WaybackMachine. Yeah, I had a CEO who I
had a hard time figure out wherehe or she were going at the
time, I did a bad thing. I stuckinto their office at different
times, and I saw what books theywere reading. Oh my gosh. And I
(13:00):
would go buy the books, and Iwould then read them, and all of
a sudden, I was able to totallytranslate a mysterious CEO,
because maybe they didn'tcommunicate why they were doing
this thing as well, but I couldfigure out their inputs. And I
gotta admit, it was superhelpful. Like, yeah, yeah.
Kelly Waltrich (13:17):
Was what my what management playbook Are you? Are
you abiding by Is it good? Youknow, Eric used to flip a napkin
over scribble some numbers whenI would ask for things, and then
come back to me with what hewould give me. And I don't know
what equation he was scribbling.
I don't even know if it was realor if he was just like messing
with me, but he had some formulainto in his mind in terms of
what he would give me and what Ineeded to get from it, and how
(13:40):
he was watching me. And I wasappreciative of it, appreciative
of it all along the way, becauseI had that in back in my mind. I
knew where I needed to get. Andso anyway, I feel like guys an
amazing CEO. Any listeners outthere? Amazing CEOs, they don't
come around often. So when youhave one, don't think the grass
is greener on the other side.
John Wernz (14:04):
Couldn't be more true. And very lucky to have big
chunks of my career with peoplethat are still friends today and
that are still mentors today. Soyeah, very, very lucky with
Kelly Waltrich (14:13):
that awesome.
You okay, John, you know, thepremise of this show is that we
learn better from our mistakesthan we do our wins, right? And
so we want to learn from eachother's what? What are we not
doing today?
John Wernz (14:34):
So this, there's a little irony in this one. And as
we were getting ready, I wasthinking about it, because I'm
going to say this one as anorganic marketer, you know,
Chief growth officer, typeperson, but the thing the don't
do that I've done is gettingcaught up in inorganic growth
over organic growth. And I knoweven for someone with our
(14:57):
backgrounds, that seems evencrazier, right? Because. Is,
like, we're the ones on thefront lines of the organic side,
but the inorganic market is soexciting, and doing acquisitions
and and bringing firms on andand the spreadsheet math of
that. I mean, it's really aseductive thing, right? I mean,
it's and it's easy to feel thepressure internally driven, not
(15:20):
from even outside forces, like,Oh, I gotta do this deal,
because then we're x, and thenwe have this, and then we have
this. The reason why I'm saying,I'm not saying, don't do in
organic, of course, like, Ithink it's a wonderful thing,
but I do see many firms doingit, either at the cost of
organic synergy or beforebuilding out organic, which is
(15:43):
also problematic, meaning that afirm is starting to put all
these pieces around, but theydon't really have that through
line that they can ever reallydo organic. And then it's like,
oh my gosh, I brought on allthese people, and we all, we
don't all have the same systemand and they don't understand
marketing, and they don't knowabout the playbook, and we're
not doing it right, and thenyou're digging out of a hole. So
(16:03):
I mean that takeaway is, I mean,the inverse is, don't I mean, or
the truth is, don't do inorganicat the cost of future or current
organic. And a lot of firmsactually are doing that right
now. Yeah,
Kelly Waltrich (16:16):
I see that every day too. I feel like, so is your
advice? Like, get your yourmarketing in order, before you
try to start acquiring firms.
That seems so obvious to me,right? I think have your brand,
have your brand it. Yeah, it ishard.
John Wernz (16:31):
It's like there's a firm, and I'm not going to name
the firm that's a leader inorganic marketing. And you know,
they're between five and 20billion in assets, and they do a
great job, but they literallylook at acquisitions and think,
number one, can they adopt ourorganic programs? Like, do they
have the tools? Do we and thesecond one is, do we have the
(16:53):
bandwidth to ensure they adoptthem? Right, right? Like, like,
Can we do the personal time andthe training and the, you know,
the systems and the integrationsto sure they can do it once
there are and so there's lotsthat firm. There are lots of
deals that they are offered thatthey say no based on that
screen, like they have a screen,and it's like, if it violates
(17:15):
the screen, no matter how goodthe price of the deal is or the
synergy, I'm not doing it ifit's going to disrupt my organic
and I have always been had a lotof admiration for firms that can
think like that.
Kelly Waltrich (17:26):
Yeah, that's amazing. So do you see So tell
me, and I have my own view onthis, but I'm curious. I feel
like you're closer to it. Do yousee the inorganic and the
organic sides talking insidebusinesses? Or do you see them
separate with separate budgets.
Like, what do you see? How isthat working? And how should it
work? It's
John Wernz (17:46):
usually, and I think to the point of the
recommendation separate. It'slike, get them on, and we'll
figure it out, and we'll workwith these people, and we'll
figure out what that is. And youknow, some of as you know, some
of acquisitions are not fullyeven integrated. So it's like,
if it's not fully integrated,how are you ever even going to
get to organic? And how is thatgoing to work? I was in a
position my career which washelpful but still imperfect,
(18:09):
which was, as the leader oforganic, I had the ability to
veto certain acquisitions, okay?
And the veto was, do you thinkwe can get them growing at our
goal organic rate in 12 months.
So that was the goal. Like, thatwas the goal. In other words, we
didn't want to do a bunch ofacquisitions that weighted down
the organic growth of the firmover time. That's still hard to
(18:33):
make that call. I'll say,meaning, yeah. Like you're,
you're judging, doing diligence,learning, what the firm learning
about the people, so you'regetting a good sense. But it's
still kind of, it's a little bitof a guess, like, I'd love to
tell you I could perfectlypredict. You know, this Firm A
is going to do, he's not goingto do great, and she is going to
do great. And, like, it was hardto get those into place, even
(18:53):
with an informed opinion. I
Kelly Waltrich (18:55):
bet you there are a lot of CMOS listening to
this that wish they had thatopportunity, because that's
rare.
John Wernz (19:01):
We did. Kelly gotta have slip story instead of, we
used to celebrate when we signedthe deal, right? So you are you
sign the Hey, there's thischampagne or whatever. Hey,
we're celebrating. Yeah, westopped and we started
celebrating all well, kind of,we had two, I don't exaggerate
too far. At the one year mark,we were checking on the organic
growth rate, and there was asecond celebration, meaning,
(19:22):
like that, did we really bringit in and did it really get up
to the speed of the organizationthat we want to keep growing at
through whatever vehiclemechanism we use to do that? Did
it happen or not? That's reallyawesome. And it was great,
right? So it was like partialparty, and then second party,
Kelly Waltrich (19:40):
full party.
Yeah, I love it. Okay, so youradvice for those listening, what
we're not doing today isinorganic at the price of
organic. And you know, not doingone or the other or prioritizing
inorganic over organic. So howdo you, how do you, how do you
know when a firm is ready? Todip their toe into M A what does
that look like like? What istheir what is their marketing
(20:04):
need to look like at that point?
What's the what's the go time? Ithink
John Wernz (20:10):
that, you know, for me, it's that it's a defined
playbook that there is like thiswe we have this brand, and, you
know, to your fund, to ourfoundational point, we have this
ways that we promote our firm,and then even perhaps, maybe, we
have these channels we use tobring in new clients, and that
those specific areas aredefined, whether it's written
down, and that there's a plan,and then when you're then doing
(20:31):
an acquisition, that is part ofthe integration plan. Now I
understand months one throughthree might be just getting, you
know, accounting over, andgetting right. So I understand,
like, there's, there's like thebusiness operating, but in if
you don't have an integrationplan that takes into account
your organic growth goals overthe first six months, 12 months,
18 months, then you shouldn't bedoing the deal. Would be my
(20:53):
argument that you should bewaiting until you have the
ability to have that integrationplan, even if you have to wait
three months to start it andyou're ready to go to help that
firm, the acquired firm, operateand market like you do, right?
Kelly Waltrich (21:06):
And I think John, what John is saying
nicely, what I'm going to saymore bluntly, is like, if you
don't have your marketing housein order, and you think to
yourself, oh, S, H, I, T, I amnot going to grow this way. I
have to acquire firms that is,like the dead wrong reason to go
about it, right? It's not a bandaid, because you're just piling
(21:28):
on to a business that doesn'tknow how to grow and to scale.
And that is such a recipe fordisaster. And we and
unfortunately, we see that everyday. So
John Wernz (21:37):
and if you want to go deep, Kelly, this is our deep
and I know you and I bothbelieve this, one of the coolest
things about organic growth tome is in the brand, is it
actually ties right into theculture of the firm. Like it's
more than just like this tool onthe side. Like, if you have a
firm that's growing organically,I guarantee the odds of that
firm is more integrated, bothoperationally, but culturally,
(22:02):
is higher, right? Like, ifyou're trying to like is these
firms grow. You're trying to alot of people want to grow, but
they want like to not lose thefirm, right? You don't want to
lose whatever makes you special.
I argue organic is a part ofkeeping that. It has a way of
that brand and the way the leadsgo and the connectivity, there's
something there that makes itmore one firm than a bunch of
(22:23):
acquired firms spread out.
Kelly Waltrich (22:28):
I agree with you so much so we have a little bit
of a niche in recruitmentmarketing. And intentionally, I
think I told you this, and mybelief is very much that firms
should be doing recruitmentmarketing like they do towards
investors, like they should beputting their values forth. They
should be showing their theirculture. They should be sharing
the services and and the waythat they go about supporting
(22:48):
advisors and firms as they comeon as a way to attract versus
waving around checks like at theend of the day. Think about how
much happier this industry wouldbe if people made decisions
fully on what you just said, onwhat they saw put forth from a
marketing perspective thatamplified their mission and
their vision and their valuesand their culture and all these
(23:09):
things that are so important tothe happiness of, you, know, a
happy marriage within M and A,
John Wernz (23:15):
I mean, I want to cry. It makes me I'm such a
strong believer in that, like,it's just like in saving firms
that pain, yeah, of the oppositeof that, just, you know, not
digging that hole even deeper sothat one day you have to figure
it out, and you're like, oh,boy, of this big, not growing
organization, like that's andyou do see firms slipping into
(23:36):
that,
Kelly Waltrich (23:36):
yeah, for sure.
I feel like I lived 1000 lives,and when it comes to M and I
now, listen, I was in a FinTech,in multiple fintechs, and not in
Ria, so it looks a little bitdifferent, but I've seen it done
well, and I've seen it donereally poorly, and it's like
life ruining on this on one sideof it, you're either building a
firm for the ages, or you areruining lives and careers. And
(23:58):
that sounds dramatic, but it isreal.
John Wernz (24:03):
I have to tell a private equity story, because,
trust me, there are, you know,there are good actors and bad
actors and high leverage and lowleverage and growth equity and
and, you know, checks andthere's all these things. But if
I go back to the GreatRecession, weg was, I worked at
wealth enhancement group. Wewere small firm, 2 billion
recession hits. By the way, Itook that job a few months
(24:24):
before that. This might be theworst career choice ever made by
any human being. By me, theprivate equity firm came in and,
you know, we're panic like, isthere a market tomorrow? Like
our client, like, what like, dowe have a business? What's
happening? We were in that samepanic, and private equity firm
came in and said, Hey, okay,here's the deal. This thing will
end at some point. We haveenough money for at least two
(24:45):
years. Everyone's keeping theirjob, and our belief is you can't
take care of clients unless youknow you're also secure, like as
much as that is. So let's leanin. We are going to cut some
investment spending, of course,but every single person has a
job. Go call all your. Clientsdo great work. And by the way,
we're actually going to keep themarketing budget, because we're
going to take market share, andthat's what I knew. I'm like, Oh
(25:07):
my gosh, I'm so lucky to be atthe place I'm at with best
decision, thinking like this,right? Where I was like, you
know, an hour before, I waslike, I probably don't have a
job like this, you know, I'mgonna to go back to my old job.
So, I mean, in in, it propelledgrowth, right? Great client
service, leaning in. Everyonefeeling, you know, as safe as
you could, professionally, toughtime, but then still, marketing
(25:28):
and rates were cheap. No oneelse was marketing. It was
phenomenal, phenomenal, right?
And so those are those storiesyou hear where it's like, if you
get in the right groups, whetherit's, you know, a private equity
firm or a larger entity. Thereare those stories out there and
they're amazing, and you justdon't hear them enough.
Kelly Waltrich (25:45):
Yeah, I love that. Oh my gosh. Feel like
marketers. I tell all themarketers I talk to, you need to
have a checklist of things thatyou're looking for in a firm.
Anytime you go in blindly, it'slike you are bound to end up in
a situation you do not want tobe in. So be ready. Have your
checklist, have your boundaries,what you're willing to, what
you're willing to bend on whatyou are not and in situations
(26:05):
like that, make me realize, youknow, it's so true, you need to
look for the right environmentsand the right partners. Okay, so
everybody that's listening, whatwe are not doing today with John
is prioritizing inorganic overorganic. So leave us with one
little tidbit for our listenersheading into the rest of our
week. What you know? What dothey need to think about? What's
(26:27):
their next step? How do theymake sure that they're not
falling into this trap?
John Wernz (26:32):
It's, it's the problem of spreadsheet math,
right? So I'm the spreadsheetmath on inorganic is often
extremely accretive, wonderful.
You know, great. Multiples.
Things look good. There's a sizemultiple. It's not. It's having
almost like our careerchecklist. Have your checklist
to make sure that you you'reready as a firm to do it, and
(26:53):
that's both operationallymarketing. There's a number of
things that need to be donebefore doing that, and so check
all those things off beforediving in, or else you're just
going to dig a deeper hole ofthings you need to correct in
your business. I
Kelly Waltrich (27:06):
love that. Thank you so much. And guys, you heard
it from John earlier. If you'rea firm that's looking for a
partner and you feel like you'vegot some things working on the
marketing front, but you want toorganic growth partner to help
you amp it up, give John a call,I'd love to talk Awesome. All
right. John, thank you so much.
John Wernz (27:24):
You're the best.
Kelly, thank you.
Kelly Waltrich (27:27):
Thanks so much for tuning in. If you enjoyed
today's show, subscribe to benotified when new episodes
become available, and pleaseconsider giving us a five star
review on Apple or Spotify. Thispodcast is sponsored by
intentionally, a financialservices growth engine, design
consultancy and agency. If youwant to learn more, please email
(27:48):
me at Kelly at growintentionally.com, thank you
again for listening and checkback to hear what we're not
doing next.
Unknown (27:57):
The information covered and posted represents the views
and opinions of the guest, anddoes not necessarily represent
the views or opinions of KellyWaltrip. The content has been
made available for informationaland educational purposes only
the.
One of the coolest things about organic growth to
me, is it in the brand, is itactually ties right into the
culture of the firm. Like, it'smore than just like this tool on
the side. Like, if you have afirm that's growing organically,
I guarantee the odds of thatfirm is more integrated, both
operationally, but culturally,is higher. Like, if you're
(00:22):
trying to like, as these firmsgrow, you're trying to a lot of
people want to grow, but theywant like, to not lose the firm,
right? You don't want to losewhatever makes you special. I'll
argue organic is a part ofkeeping that.
Kelly Waltrich (00:36):
Welcome to the don't do that podcast. I'm Kelly
Walter, CEO and co founder ofintentionally and like me, this
show is no fluff and no BS, justsmart advice to help you learn
from the best and level upfaster. So what are we not doing
today? Let's find out. Hieveryone, and welcome to this
(00:57):
episode of The don't do thatpodcast. I'm your host, Kelly
Walter and I have with me afellow, reformed CMO. John
words, Hello, John. How youdoing today?
John Wernz (01:08):
Good morning, Kelly.
This is so fun to get togetherwith you. I'm excited to catch
up. Is that
Kelly Waltrich (01:12):
a fair way to describe who you are? I feel
like that's how people describeme. I
John Wernz (01:16):
Right. I You never quite Shut it, do you? And
whether it's a reformed CMO, Ithink a reformed even like sales
side, marketing side, all of theabove. Yes, I checked those.
Kelly Waltrich (01:29):
All right, everybody, John and I have a
have a great relationshiptalking all things marketing we
I don't know how we got to knoweach other, but it's been a
great relationship in terms ofhelping each other keep the
pulse on what's happening interms of growth in the industry,
sales and marketing and andacquisitions and everything in
between. And so he's a valuablesounding board for me, and I
(01:51):
want to give you a little bit ofa glimpse into what that looks
like today. So John, tell uswhat you're up to these days.
What do you? What do you? Whatare you working
John Wernz (01:57):
on? Oh my gosh.
Well, it's a long list, solet's, let's not burn the whole
pod talking about that. So mymain job is I work for a private
equity firm. I've been told thatmy title is made up. It is not.
It is an entrepreneur inresidence that is a real title.
Cool. And we're really trying tofind and partner with RIAs, who
are looking to grow organically.
(02:18):
So we're really leaning intothat area. In addition to that,
I'm on a number of boards acrossthe industry, mostly around
organic growth. So firms nameddata line testimonial IQ, a firm
I work with that we both knowreally well. Light Field just
was sold to SCI socongratulations to them. And
then I'm also do some FinTechbanking. So I've got a little
bit of a hand in a bunch ofdifferent things currently.
Kelly Waltrich (02:39):
That's awesome.
Okay, so you have your hand in alot of different things. Give us
a sense of, like, what are youseeing out there? What are some
trends? What are some things weshould be keeping our eye on?
What are some sleeper thingsthat maybe nobody's seeing, that
you are
John Wernz (02:50):
I still think, I mean, I know, and I've heard you
talk about AI and where we'regoing, and I am very excited
about it, but I still see somany people missing the basics.
Sometimes it's hard for me tojump into the advanced bucket
where it's like, people aren'teven crossing those, those basic
buckets. And what I mean bythat, and it's something I know
you, we both talked about atconferences, are there is people
(03:12):
keep skipping foundationalmarketing and jumping into the
advanced pool way before they'reready. And it's I do some of the
board work is in that area. Andso I see these people, they're
like, I want leads now, and I'mgoing to close a bunch of leads.
And you're like, you're I dotoo. I do too. Trust me, we all
do right? We're ROI drivenmarketers, but you're not ready
yet. So I know that's not a newone, but it's amazing how much
(03:34):
it's like, I still see it everyday.
Kelly Waltrich (03:37):
Oh my gosh. You and I could talk about this all
day. You know, as an agencyowner like this is one of my
biggest challenges, because Iknow that, and I have to choose
every day from between takingthe business and not because of
that reason. And that's reallyhard too. You know, I had a
client email me yesterday, andhe's going to know who he is,
because he's probably listeningto this. I love you know that.
(03:59):
But he sent an email, and hesaid, Hey, I'm really worried
about the price of our leadsgoing from x to x. What can we
do? And I'm like, invest in yourbrand, because if all you are
doing is running ads, thenpeople are landing on an under
invested brand experience. And Icannot emphasize how important
(04:22):
that is, and so you nailed it.
You nailed it. For me, I need adrink, and it's only what time.
It's 1023, yeah, we
John Wernz (04:29):
had, we did have mimosas at the last conference
as part of our working session.
So it's okay. It was reallypretty we had a great,
productive session you invitedme to, so that'll work. Okay,
Kelly Waltrich (04:39):
so let's dig into the private equity what? So
you're looking for firms thatare looking to grow in
organically. So tell us aboutthe or organically. You said,
organically, organically, okay,so tell us some signs that you
see from the types of firms thatyou are trying to bring on that
that indicate that type ofgrowth mindset.
John Wernz (04:59):
Okay. A lot of them have tried tests and failed, and
that's not a bad thing, right?
That they are starting to putthe toe in the water and
learning, oh, I don't have theconversion funnel figured out,
or, Oh, I don't have my dripcampaign figured out, or my
technology, whatever it is,that's great. But they're
starting to either test a lot ofthe firms also that are of
interest, maybe have one thingworking, right? They have one
(05:21):
channel, so they're in San orwas, or they're, they have a
digital YouTube that they'repromoting, and it's, they're
actually getting some leadsfrom, like, they're doing
something, well, right? Yeah,something. But like, on, usually
it's one or two, and then our,you know, the goal of partnering
together is, let's make that456, and how do we get that so
we're well rounded.
Kelly Waltrich (05:43):
I love that. I think that's smart. So as you're
looking at firms, usually,what's the channel they're
getting right? If they'regetting something right? Because
I don't have a good answer tothat for the firms that I talk
John Wernz (05:52):
to, no, it's really distributed right. So you'll see
again, the limited firms thatare in San and was continue to
do well. And there's real valueif those programs are a fit. So
we'll definitely bump into firmsthere. There'll be firms that
are doing some type of COI orreferral marketing really well.
Again, usually they only haveall relationship or two, you
know, they have a coupleaccounting firms. They have a
(06:14):
couple relationships, butthey're not really
organizationally scaled in it.
And so I see that, and then I'llsee firms that are perhaps doing
outbound marketing or promotingthemselves really well, and so
that's exciting to see, kind oflike they're getting through
that, like we talked aboutfoundational, and they're kind
of ready to actually take leads.
So you'll see those different,maybe three different buckets.
(06:34):
Cool.
Kelly Waltrich (06:35):
Okay, so I feel like this might be better coming
from you than coming from me,since I am running the agency,
but give our listeners sort of asense of what they should be
expecting to spend, maybe at thefoundational level, and then at
the amped up level when you arelayering in some of the lead
generation components. And Iknow that the ranges are wild,
but just give, give people likea ballpark. I've heard you to do
(06:58):
this before, so I think it wouldbe helpful
John Wernz (07:01):
here. I mean it in.
I don't ever want to undersellit, because this is where you're
always investing in all thedifferent buckets, the
foundational bucket, the lead,like, it's not like, you really
check one off and then you,like, move to the next. Like,
you don't just put it away,right and come out there. Yeah,
I've done it both as a somepeople are as like, well, what
percentage of revenue should Ibe spending? And I'm like, What
I mean is your firm 10 millionin revenue or 100 million? I
(07:23):
mean, it's that's such a wildthing, because it's very to your
point. But I mean, people needto be spending 50 to 100,000
minimum to, really, if they'refrom scratch, minimum, to get
that foundation in place. Andit's often much more. And a lot
of that work isn't just the hardcost, it's actually doing it
right. It's taking that work andmaking it so your wonderful
(07:46):
person at the front desk says itthat way, and the person and
your little call center says itthat way, and the person in
Topeka says it that way, like,that's, you know, part of it is
the hard cost, but a lot of itis the effort to run it through
and be like, Okay, I actuallythink we're 80% tight on this
thing. Like, we've got this,
Kelly Waltrich (08:05):
yeah, and you and I have talked a lot about,
like, it really depends ongoals. Like I have. Foundational
to your point is not apercentage of revenue. In most
cases, foundational startingpoint is like, okay, what are
the goals that you're trying toaccomplish as part of that? Do
you want to walk away, like yousaid, with everybody singing
from the same playbook. Do youwant to we do want to walk away
with your baseline channelsreally up and running and
(08:26):
operational like, what does thatmean? What does that mean to
you? And what does success looklike? And what are your goals?
Because, you know, we have, I'msure you can imagine, I have
firms come into intentionallyevery day with some pretty wild
goals for the budgets they setforth, and I, I'm, you know, me,
I'm pretty straightforward whenit comes to what's possible with
(08:47):
the budget. And I'm not tryingto make a buck, and
intentionally, I'm trying to bereal with firms about, like,
what the work that it takes toget these things done. So So I
appreciate that. I thinkeverybody needs a little bit of
a wake up call in terms of whatit actually takes to get this
stuff done. And
John Wernz (09:04):
don't underestimate the soft costs, right? The costs
of of actually doing the work.
It's not something we're like,here's a check, thanks. Like,
that's not, that's not going toyield a good outcome, and
especially as you get intoactually promoting the firm,
right? So you need some helpfrom the firm on voice and
personality and those thingsthat aren't AI right, that are
right, that are the heart andsoul of what they do, and so
(09:24):
they really need to lean in.
Kelly Waltrich (09:27):
So it's so funny you say that I have a clause in
the intentionally contract thatsays, like, what we expect from
you, and it's very basic things.
It's like, you need to show upfor meetings, you need to answer
our questions, you need to havesomeone available to us. And
I've had multiple firms try totake that out, and that is a an
immediate sign to me that thoseare not firms that we want to be
(09:48):
working with. Like, if you canagree that you're going to be
available to support yourmarketing efforts, then this is
a failure from the start. Ialways that kind of, I mean, it
does. Kind of stink to get thatfar along in the process, and
they're about to sign anagreement, and they're like,
Hey, can you take out the partwhere we have to be involved?
John Wernz (10:07):
I know it's so great. I mean, it's so big, and
I've been so lucky that in theroles might reform cmo life, I
was very much an empowered CMO.
That makes sense and meaning, Iwas given a lot of rope, yeah,
and a lot of ability to dostuff. But I see, you know, you
run a lot of people headingmarketing words, marketing where
it's like they're at the whim ofthe CEO, and he or she may not
feel like it today, and that's arough that's a rough spot to be.
(10:29):
The other one is when you havethe mega brand and CA, CEO who
has some level of notoriety,those people can also be hard to
work with. So I was very lucky.
I worked with a very much agroup in my career that people
were all leaning in and I wasn'tfighting that fight, but I see
lots of people fighting thatfight for attention. Yeah,
Kelly Waltrich (10:51):
it's interesting. I just had Eric
Clark on as a guest. I thankedhim on the podcast for that very
thing, like realizing, you know,after starting intentionally,
how lucky I was to be asempowered as I was and
autonomous, and that that is arare find. It
John Wernz (11:06):
is, and you and I are both picky, so we, you know,
you and I probably require somelevel of that at some point in
our career where it's like, Ican't play that other game very
well, so I need to have somelevel of autonomy. It was great.
I had so much room. But therewas a couple of times a year
where my colleagues or themanagement team or the CEO would
give just a little tug on therope, yeah, and I listened. And
(11:27):
so usually when they did, it waslike, oh, I should probably
like, oh, I would think I'mmissing something here. It
wasn't like, ah, what are theydoing to me. It was like, oh,
like, they're usually leave mealone. So if they're actually
going to make a point, I betterlean in and really understand
it. And a lot of times therewas, like, huge value, like,
blind spot missed, or teammissing something. Yeah,
Kelly Waltrich (11:47):
and I coach a lot of marketers these days, and
I feel like I'm always tellingthem that that is something that
you look for in a CEO whenyou're when you're joining, but
more often it's earned, right?
It's I feel like my relationshipwas with Eric was ask for a
little prove, a little ask for alittle prove, a little ask for a
(12:07):
little blow the doors off, nothave to ask anymore, you know.
So it's definitely, I feel likeyou CEOs, you definitely know
which way they're they're goingto go, and if they have the
ability to put the trust insomeone, when you take a job, I
definitely tell any marketer,any good marketer that I that I
mentor, to look for that. But itis an earned situation, no
(12:30):
matter where you work, I think,or what role you're in, right?
And
John Wernz (12:37):
it's, it's something, yeah, you have to
understand, this is a, this ismaybe a horrible story. This is
when I was in my agencyenvironment. This is years ago,
Kelly before, like the WaybackMachine. Yeah, I had a CEO who I
had a hard time figure out wherehe or she were going at the
time, I did a bad thing. I stuckinto their office at different
times, and I saw what books theywere reading. Oh my gosh. And I
(13:00):
would go buy the books, and Iwould then read them, and all of
a sudden, I was able to totallytranslate a mysterious CEO,
because maybe they didn'tcommunicate why they were doing
this thing as well, but I couldfigure out their inputs. And I
gotta admit, it was superhelpful. Like, yeah, yeah.
Kelly Waltrich (13:17):
Was what my what management playbook Are you? Are
you abiding by Is it good? Youknow, Eric used to flip a napkin
over scribble some numbers whenI would ask for things, and then
come back to me with what hewould give me. And I don't know
what equation he was scribbling.
I don't even know if it was realor if he was just like messing
with me, but he had some formulainto in his mind in terms of
what he would give me and what Ineeded to get from it, and how
(13:40):
he was watching me. And I wasappreciative of it, appreciative
of it all along the way, becauseI had that in back in my mind. I
knew where I needed to get. Andso anyway, I feel like guys an
amazing CEO. Any listeners outthere? Amazing CEOs, they don't
come around often. So when youhave one, don't think the grass
is greener on the other side.
John Wernz (14:04):
Couldn't be more true. And very lucky to have big
chunks of my career with peoplethat are still friends today and
that are still mentors today. Soyeah, very, very lucky with
Kelly Waltrich (14:13):
that awesome.
You okay, John, you know, thepremise of this show is that we
learn better from our mistakesthan we do our wins, right? And
so we want to learn from eachother's what? What are we not
doing today?
John Wernz (14:34):
So this, there's a little irony in this one. And as
we were getting ready, I wasthinking about it, because I'm
going to say this one as anorganic marketer, you know,
Chief growth officer, typeperson, but the thing the don't
do that I've done is gettingcaught up in inorganic growth
over organic growth. And I knoweven for someone with our
(14:57):
backgrounds, that seems evencrazier, right? Because. Is,
like, we're the ones on thefront lines of the organic side,
but the inorganic market is soexciting, and doing acquisitions
and and bringing firms on andand the spreadsheet math of
that. I mean, it's really aseductive thing, right? I mean,
it's and it's easy to feel thepressure internally driven, not
(15:20):
from even outside forces, like,Oh, I gotta do this deal,
because then we're x, and thenwe have this, and then we have
this. The reason why I'm saying,I'm not saying, don't do in
organic, of course, like, Ithink it's a wonderful thing,
but I do see many firms doingit, either at the cost of
organic synergy or beforebuilding out organic, which is
(15:43):
also problematic, meaning that afirm is starting to put all
these pieces around, but theydon't really have that through
line that they can ever reallydo organic. And then it's like,
oh my gosh, I brought on allthese people, and we all, we
don't all have the same systemand and they don't understand
marketing, and they don't knowabout the playbook, and we're
not doing it right, and thenyou're digging out of a hole. So
(16:03):
I mean that takeaway is, I mean,the inverse is, don't I mean, or
the truth is, don't do inorganicat the cost of future or current
organic. And a lot of firmsactually are doing that right
now. Yeah,
Kelly Waltrich (16:16):
I see that every day too. I feel like, so is your
advice? Like, get your yourmarketing in order, before you
try to start acquiring firms.
That seems so obvious to me,right? I think have your brand,
have your brand it. Yeah, it ishard.
John Wernz (16:31):
It's like there's a firm, and I'm not going to name
the firm that's a leader inorganic marketing. And you know,
they're between five and 20billion in assets, and they do a
great job, but they literallylook at acquisitions and think,
number one, can they adopt ourorganic programs? Like, do they
have the tools? Do we and thesecond one is, do we have the
(16:53):
bandwidth to ensure they adoptthem? Right, right? Like, like,
Can we do the personal time andthe training and the, you know,
the systems and the integrationsto sure they can do it once
there are and so there's lotsthat firm. There are lots of
deals that they are offered thatthey say no based on that
screen, like they have a screen,and it's like, if it violates
(17:15):
the screen, no matter how goodthe price of the deal is or the
synergy, I'm not doing it ifit's going to disrupt my organic
and I have always been had a lotof admiration for firms that can
think like that.
Kelly Waltrich (17:26):
Yeah, that's amazing. So do you see So tell
me, and I have my own view onthis, but I'm curious. I feel
like you're closer to it. Do yousee the inorganic and the
organic sides talking insidebusinesses? Or do you see them
separate with separate budgets.
Like, what do you see? How isthat working? And how should it
work? It's
John Wernz (17:46):
usually, and I think to the point of the
recommendation separate. It'slike, get them on, and we'll
figure it out, and we'll workwith these people, and we'll
figure out what that is. And youknow, some of as you know, some
of acquisitions are not fullyeven integrated. So it's like,
if it's not fully integrated,how are you ever even going to
get to organic? And how is thatgoing to work? I was in a
position my career which washelpful but still imperfect,
(18:09):
which was, as the leader oforganic, I had the ability to
veto certain acquisitions, okay?
And the veto was, do you thinkwe can get them growing at our
goal organic rate in 12 months.
So that was the goal. Like, thatwas the goal. In other words, we
didn't want to do a bunch ofacquisitions that weighted down
the organic growth of the firmover time. That's still hard to
(18:33):
make that call. I'll say,meaning, yeah. Like you're,
you're judging, doing diligence,learning, what the firm learning
about the people, so you'regetting a good sense. But it's
still kind of, it's a little bitof a guess, like, I'd love to
tell you I could perfectlypredict. You know, this Firm A
is going to do, he's not goingto do great, and she is going to
do great. And, like, it was hardto get those into place, even
(18:53):
with an informed opinion. I
Kelly Waltrich (18:55):
bet you there are a lot of CMOS listening to
this that wish they had thatopportunity, because that's
rare.
John Wernz (19:01):
We did. Kelly gotta have slip story instead of, we
used to celebrate when we signedthe deal, right? So you are you
sign the Hey, there's thischampagne or whatever. Hey,
we're celebrating. Yeah, westopped and we started
celebrating all well, kind of,we had two, I don't exaggerate
too far. At the one year mark,we were checking on the organic
growth rate, and there was asecond celebration, meaning,
(19:22):
like that, did we really bringit in and did it really get up
to the speed of the organizationthat we want to keep growing at
through whatever vehiclemechanism we use to do that? Did
it happen or not? That's reallyawesome. And it was great,
right? So it was like partialparty, and then second party,
Kelly Waltrich (19:40):
full party.
Yeah, I love it. Okay, so youradvice for those listening, what
we're not doing today isinorganic at the price of
organic. And you know, not doingone or the other or prioritizing
inorganic over organic. So howdo you, how do you, how do you
know when a firm is ready? Todip their toe into M A what does
that look like like? What istheir what is their marketing
(20:04):
need to look like at that point?
What's the what's the go time? Ithink
John Wernz (20:10):
that, you know, for me, it's that it's a defined
playbook that there is like thiswe we have this brand, and, you
know, to your fund, to ourfoundational point, we have this
ways that we promote our firm,and then even perhaps, maybe, we
have these channels we use tobring in new clients, and that
those specific areas aredefined, whether it's written
down, and that there's a plan,and then when you're then doing
(20:31):
an acquisition, that is part ofthe integration plan. Now I
understand months one throughthree might be just getting, you
know, accounting over, andgetting right. So I understand,
like, there's, there's like thebusiness operating, but in if
you don't have an integrationplan that takes into account
your organic growth goals overthe first six months, 12 months,
18 months, then you shouldn't bedoing the deal. Would be my
(20:53):
argument that you should bewaiting until you have the
ability to have that integrationplan, even if you have to wait
three months to start it andyou're ready to go to help that
firm, the acquired firm, operateand market like you do, right?
Kelly Waltrich (21:06):
And I think John, what John is saying
nicely, what I'm going to saymore bluntly, is like, if you
don't have your marketing housein order, and you think to
yourself, oh, S, H, I, T, I amnot going to grow this way. I
have to acquire firms that is,like the dead wrong reason to go
about it, right? It's not a bandaid, because you're just piling
(21:28):
on to a business that doesn'tknow how to grow and to scale.
And that is such a recipe fordisaster. And we and
unfortunately, we see that everyday. So
John Wernz (21:37):
and if you want to go deep, Kelly, this is our deep
and I know you and I bothbelieve this, one of the coolest
things about organic growth tome is in the brand, is it
actually ties right into theculture of the firm. Like it's
more than just like this tool onthe side. Like, if you have a
firm that's growing organically,I guarantee the odds of that
firm is more integrated, bothoperationally, but culturally,
(22:02):
is higher, right? Like, ifyou're trying to like is these
firms grow. You're trying to alot of people want to grow, but
they want like to not lose thefirm, right? You don't want to
lose whatever makes you special.
I argue organic is a part ofkeeping that. It has a way of
that brand and the way the leadsgo and the connectivity, there's
something there that makes itmore one firm than a bunch of
(22:23):
acquired firms spread out.
Kelly Waltrich (22:28):
I agree with you so much so we have a little bit
of a niche in recruitmentmarketing. And intentionally, I
think I told you this, and mybelief is very much that firms
should be doing recruitmentmarketing like they do towards
investors, like they should beputting their values forth. They
should be showing their theirculture. They should be sharing
the services and and the waythat they go about supporting
(22:48):
advisors and firms as they comeon as a way to attract versus
waving around checks like at theend of the day. Think about how
much happier this industry wouldbe if people made decisions
fully on what you just said, onwhat they saw put forth from a
marketing perspective thatamplified their mission and
their vision and their valuesand their culture and all these
(23:09):
things that are so important tothe happiness of, you, know, a
happy marriage within M and A,
John Wernz (23:15):
I mean, I want to cry. It makes me I'm such a
strong believer in that, like,it's just like in saving firms
that pain, yeah, of the oppositeof that, just, you know, not
digging that hole even deeper sothat one day you have to figure
it out, and you're like, oh,boy, of this big, not growing
organization, like that's andyou do see firms slipping into
(23:36):
that,
Kelly Waltrich (23:36):
yeah, for sure.
I feel like I lived 1000 lives,and when it comes to M and I
now, listen, I was in a FinTech,in multiple fintechs, and not in
Ria, so it looks a little bitdifferent, but I've seen it done
well, and I've seen it donereally poorly, and it's like
life ruining on this on one sideof it, you're either building a
firm for the ages, or you areruining lives and careers. And
(23:58):
that sounds dramatic, but it isreal.
John Wernz (24:03):
I have to tell a private equity story, because,
trust me, there are, you know,there are good actors and bad
actors and high leverage and lowleverage and growth equity and
and, you know, checks andthere's all these things. But if
I go back to the GreatRecession, weg was, I worked at
wealth enhancement group. Wewere small firm, 2 billion
recession hits. By the way, Itook that job a few months
(24:24):
before that. This might be theworst career choice ever made by
any human being. By me, theprivate equity firm came in and,
you know, we're panic like, isthere a market tomorrow? Like
our client, like, what like, dowe have a business? What's
happening? We were in that samepanic, and private equity firm
came in and said, Hey, okay,here's the deal. This thing will
end at some point. We haveenough money for at least two
(24:45):
years. Everyone's keeping theirjob, and our belief is you can't
take care of clients unless youknow you're also secure, like as
much as that is. So let's leanin. We are going to cut some
investment spending, of course,but every single person has a
job. Go call all your. Clientsdo great work. And by the way,
we're actually going to keep themarketing budget, because we're
going to take market share, andthat's what I knew. I'm like, Oh
(25:07):
my gosh, I'm so lucky to be atthe place I'm at with best
decision, thinking like this,right? Where I was like, you
know, an hour before, I waslike, I probably don't have a
job like this, you know, I'mgonna to go back to my old job.
So, I mean, in in, it propelledgrowth, right? Great client
service, leaning in. Everyonefeeling, you know, as safe as
you could, professionally, toughtime, but then still, marketing
(25:28):
and rates were cheap. No oneelse was marketing. It was
phenomenal, phenomenal, right?
And so those are those storiesyou hear where it's like, if you
get in the right groups, whetherit's, you know, a private equity
firm or a larger entity. Thereare those stories out there and
they're amazing, and you justdon't hear them enough.
Kelly Waltrich (25:45):
Yeah, I love that. Oh my gosh. Feel like
marketers. I tell all themarketers I talk to, you need to
have a checklist of things thatyou're looking for in a firm.
Anytime you go in blindly, it'slike you are bound to end up in
a situation you do not want tobe in. So be ready. Have your
checklist, have your boundaries,what you're willing to, what
you're willing to bend on whatyou are not and in situations
(26:05):
like that, make me realize, youknow, it's so true, you need to
look for the right environmentsand the right partners. Okay, so
everybody that's listening, whatwe are not doing today with John
is prioritizing inorganic overorganic. So leave us with one
little tidbit for our listenersheading into the rest of our
week. What you know? What dothey need to think about? What's
(26:27):
their next step? How do theymake sure that they're not
falling into this trap?
John Wernz (26:32):
It's, it's the problem of spreadsheet math,
right? So I'm the spreadsheetmath on inorganic is often
extremely accretive, wonderful.
You know, great. Multiples.
Things look good. There's a sizemultiple. It's not. It's having
almost like our careerchecklist. Have your checklist
to make sure that you you'reready as a firm to do it, and
(26:53):
that's both operationallymarketing. There's a number of
things that need to be donebefore doing that, and so check
all those things off beforediving in, or else you're just
going to dig a deeper hole ofthings you need to correct in
your business. I
Kelly Waltrich (27:06):
love that. Thank you so much. And guys, you heard
it from John earlier. If you'rea firm that's looking for a
partner and you feel like you'vegot some things working on the
marketing front, but you want toorganic growth partner to help
you amp it up, give John a call,I'd love to talk Awesome. All
right. John, thank you so much.
John Wernz (27:24):
You're the best.
Kelly, thank you.
Kelly Waltrich (27:27):
Thanks so much for tuning in. If you enjoyed
today's show, subscribe to benotified when new episodes
become available, and pleaseconsider giving us a five star
review on Apple or Spotify. Thispodcast is sponsored by
intentionally, a financialservices growth engine, design
consultancy and agency. If youwant to learn more, please email
(27:48):
me at Kelly at growintentionally.com, thank you
again for listening and checkback to hear what we're not
doing next.
Unknown (27:57):
The information covered and posted represents the views
and opinions of the guest, anddoes not necessarily represent
the views or opinions of KellyWaltrip. The content has been
made available for informationaland educational purposes only
the.
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