In this episode of Kaffeen Espresso, we’re joined by Jonathan Baker, head of the M&A practice at Punctuation and a former craft brewery owner. Jonathan shares invaluable insights on firm valuation, the emotional complexities of the M&A process, and why deal terms often matter more than valuation.
As an expert in helping small- to mid-sized marketing services firms navigate acquisitions, Jonathan unpacks what agency owners should focus on to make their businesses sellable and scalable. Whether you’re considering a future sale, planning succession, or just curious about how to increase your agency’s value, this episode is packed with actionable advice.
What You’ll Learn:
- How buyers assess agency value (and what surprises most sellers).
- The critical importance of deal terms over valuation alone.
- Why agency founders need to focus on reducing their reliance on the business.
- The role of inbound marketing in boosting firm value.
- Navigating the emotional toll of selling a business and separating personal identity from the agency.
Resources & Links:
- Visit Punctuation’s website: punctuation.com
- Check out Punctuation’s insights: punctuation.com/insights
P.S. Whenever you’re ready, here are four ways I can help you attract more high-value clients—without the hustle:
📚 Start with my free book
Join 3,000+ service providers and agency owners who’ve downloaded Client Magnet: 97 Proven Strategies and Tactics to Attract New Business and Scale Your Creative Agency Revenue.
(It’s written for agencies, but packed with advice any service provider can use.)
👉 Grab it free: https://kaffeen.co/book
🚀 Build your lead system with LinkedIn Lead Liftoff
A done-for-you lead generation system that brings in high-quality leads from LinkedIn—no content, cold calls, or awkward DMs required.
We’ll build it, set it up, and show you how to run it in under 30 minutes a day.
👉 Learn more: https://kaffeen.co/llo
🎧 Tune into the podcast
Get honest advice, expert interviews, and actionable tips to grow your service business with more clarity and less noise.
👉 Follow here: https://open.spotify.com/show/7upjztW0B3hQi2YlHTVdNn
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Charlotte Ellis Maldari (00:00):
Hi and welcome to today's episode of
the Kaffeen Espresso podcast.
today we welcome Jonathan Baker,who's the head of the M& A
practice at Punctuation, whichis a consultancy specializing in
small to mid sized marketingservices firms.
he's an Emory Universitygraduate and a former craft
brewery owner.
My husband would have a lot tochat about with you on that
(00:21):
front, I'm sure.
And Jonathan sheds light oncrucial aspects like how buyers
determine firm value, theemotional toll.
During the M& A process and thesignificance of deal term terms
over valuation.
I'm really excited for you tojoin us as we navigate the
intricate world of firmvaluation and strategic decision
(00:42):
making, which I know are on theminds of a lot of the people
listening today whooverwhelmingly are agency
leaders.
So welcome Jonathan.
Jonathan Baker (00:52):
Thank you.
Thanks for having me.
Charlotte Ellis Maldari (00:54):
So I've not met Jonathan before, apart
from on our pre chat before werecorded, but I'm a huge fan of
his colleague's work over atPunctuation.
I've got a couple of David CBaker books knocking around.
I don't actually have one on mydesktop right now.
And He's somebody I followedthroughout my career, as well as
Blair Enns, who, of course, ishis co co host on the Two Bobs
(01:16):
podcast, which I'm sure many ofour listeners would also be
familiar with.
So it's an honor to be speakingto somebody over at Punctuation.
So can you tell us a bit moreabout your journey and what led
you to your current role atPunctuation, Jonathan?
I really want to hear more aboutthe the steer from Craft Brewery
into M& A.
Jonathan Baker (01:36):
Yeah steep left turn.
So I started my career doingmarketing strategy consulting
and then left in 2011 to start abrewery, Monday Night Brewing
based in Atlanta.
We grew that up.
I have two business partnersthere actually still own it, but
I'm not running it.
So two business partners runningthe day to day.
(01:59):
And we went through the M& Aprocess.
We were approached.
A while back at this point, wentthrough the whole process ended
up getting left at the altar.
But that experience reallypiqued my interest in MNA and it
was a lot more.
I think squishy and subjectivethan I was expecting it to be
(02:22):
and I saw an opportunity to jumpon board with my father, David
C.
Baker, to help other agencyowners.
help navigate the process aswell.
About five years now ago Ipivoted to start to build out
and put a little bit more rigorbehind our M&A practice at
(02:43):
punctuation.
Charlotte Ellis Maldari (02:43):
I have also been through that process,
albeit on a very small scale andnot within an agency When I left
agency world initially, I set upa consumer facing business,
probably the first and last timeI'll ever do that, definitely a
B2B person.
It turns out, but yeah Iactually sold my firm that I
(03:04):
founded like a week before Igave birth to my first child.
Talk about a hard deadline, butit was yeah, it was a really
interesting process and ithelped me to appreciate when I
set up my next business, justwhat metrics are important
because I feel like as businessowners, if you've not been
through that process before,there are certain things we have
in mind that we think are goingto be important and valuable.
And actually when it comes downto it, It's a whole set of other
(03:27):
metrics.
it's interesting to startanother business after having
been through it was not a bigsell by any stretch of the
imagination, but having beenthrough that process and just
looking at it through adifferent lens.
Yeah really excited to have thischat today.
So taking a step back frombefore.
I guess before your involvementat Punctuation, what inspired
Punctuation's focus onindependent agencies and how has
(03:48):
this shaped your approach?
I'm curious because this is alsowhat we tend to focus on here at
Kaffeen.
Jonathan Baker (03:54):
Yeah, it was a pretty honest way in.
My father owned an independentagency in the mid 90s and
recognized that at the timethere really weren't a lot of
smart.
Voices speaking to the owners ofthose firms.
he wanted to, be that voice.
And so starting in the latenineties, started up a practice
(04:15):
and wasn't necessarily focusedon marketing firms at the
beginning, right?
You're just trying to takewhatever work you can get, but
over time was able to narrowfocus and now I think is really,
well known in the space.
Charlotte Ellis Maldari (04:29):
Yeah, absolutely.
Very much when I became amarketing director at a agency
first time, which was back in2011, the very beginning of
2011, there were only a coupleof names on my radar.
people who were supportingagencies that, and who I went
along to listen to speak whenthey came to the UK.
So yeah, certainly resonate withthe fact that there wasn't a lot
(04:52):
of support around early days.
But yeah, that's it'sinteresting to see that you've I
guess Tighten the grip onindependent agencies.
That sounds awful when I say itlike that, but really focusing
and niching down knowing whatyour specialism is and being
able to lean into that is amassive asset for my clients,
when we're helping them to focuson one particular area and speak
(05:13):
to the challenges of theirclients.
So for independent agency ownerswho are considering M& A, what
are the key factors to be M& Aready in your opinion?
Jonathan Baker (05:24):
It depends on where you're starting from,
right?
But I would say some of the keythings that we help agencies
think through is cleaning upyour financials and making sure
that they're presented in theright way and that you also are
separating business and personalto the extent possible.
Charlotte Ellis Maldari (05:44):
That's a challenge.
Jonathan Baker (05:45):
It can be, because there are tax advantages
sometimes to running personalthrough the business.
Positioning is certainly an areaof focus because the tighter the
positioning, usually the higherthe value of the firm, or at
least the higher the multiplegiven a similar size firm.
We want agency owners to paythemselves a market rate.
(06:07):
That's something that we oftenhave conversations around.
And, there's really good reasonswhy you should start doing that
now if you're not.
And, I think the last thing I'llmention is just reliance on the
founder can be a big concern,particularly for smaller firms.
And how have you demonstratedthat the firm is not reliant on
(06:28):
you?
Do you have business developmentprocesses in place?
Do you have, other people doingsome of this work?
Cause otherwise you're gonnaeither scare buyers away or set
yourself up for a low balloffer.
Charlotte Ellis Maldari (06:43):
Yeah.
in the chat prior to thisrecording talked about, I know I
talked about at least that thisis really fascinating moment for
me when I've spent my entirecareer working with agencies
apart from that blip with theconsumer facing business.
it's always fascinating to methat the money is In the the
(07:03):
imagination of your design team,come from a particular design,
particularly design focusbackground, and the
relationships that the seniorleaders have and the rapport
that they have.
And really it, apart from theMacs and the MacBook pros that
are sat on desks, that is almostthe beginning and the end of it,
as far as I can see, like somuch of it is wrapped up in who
(07:24):
your team is and what therapport is and how much you're
creative team get the clientbriefs.
And I find that a reallyfascinating thing.
Often we talk about the magicthat a creative agency brings to
a brief.
And that being the differencebetween a successful project or
not.
when clients typically arecoming to me, it's either when
they're thinking about growing,or they are thinking about
(07:46):
succession planning and how toextricate the lead personality
in the business from thebusiness, from their client's
perception of that separationyou're talking about.
I find that is often a realstruggle because so much of the
ego is tied up in it as well, sowho they've been for so long,
then trying to remove himselffrom that to get a good sale
price is exceptionally difficulton an emotional and mental
(08:09):
health level.
What advice would you give toleaders who are transitioning
their agencies to maybemanagement buyout, or maybe
they're looking to be acquired.
especially those who have kindof founder led branding, as we
know many agencies actually, theliteral name of the agency Are
the surnames of the people whofounded it.
And that's not an uncommonscenario.
(08:30):
Do you have any advice in thatsituation?
Jonathan Baker (08:33):
Yeah, I think first there's a misconception
that in order to be the mostsellable, you need to be the
most withdrawn from your firmand that is not the case like
we, we don't want the foundercompletely out of the business.
We want the founder focused onthe things that a founder should
be focused on, which is, thestrategic direction of the firm
high level financials andbusiness development and sales.
(08:57):
Those are usually the mainthings.
And Part of it is just makingsure that they are putting
systems in place in order to beable to scale the agency.
And I think regardless of theindustry, scale requires the
founders giving up control,right?
So that's not unique tomarketing services.
(09:18):
And buyers are looking forfounders who are willing to give
up that control.
So that They can achieve somescale.
You're right about the personalnature of this, right?
Like it's your baby in a lot ofways.
And I don't necessarily havespecific advice there because it
really is so dependent on theperson and their personality and
(09:39):
how much they're, Their selfidentity might be tied up in the
business.
Yeah.
We try to coach folks, don't tieyour personal identity up in the
business, right?
That's just what you do.
But who are you?
Charlotte Ellis Maldari (09:49):
Easier said than done.
Yeah.
Yeah.
Jonathan Baker (09:52):
What?
Get a hobby.
I don't know.
Charlotte Ellis Maldari (09:54):
Yeah.
Absolutely.
I'll get a therapist.
I've won all the other ones.
Jonathan Baker (09:58):
Yeah, and we function as therapists
throughout the process.
That's our role in a lot of waysbecause there's really no one
else that's understands whatyou're going through and can
talk through it with you.
Charlotte Ellis Maldari (10:09):
It's counsel.
Jonathan Baker (10:10):
Yes.
Charlotte Ellis Maldari (10:12):
Okay.
And we talked about, you talkedin you touched very briefly upon
the fact that you should sorry,I'm going to be paraphrasing
now, but that you would thinkabout scaling your business.
be intentional about it shore uprelationships with existing
clients and ensure that you'reattracting clients.
people on an ongoing basis toyour firm.
Do you have any tips on how toensure that agencies are
(10:35):
building long term value toattract potential buyers aside
from potential clients?
Jonathan Baker (10:43):
A lot of the things that make a business more
sellable are the same thingsthat make a business well run.
And so if you're building a wellrun business for the future in
all likelihood, you're buildinga sellable business.
So if you go through the thoughtexercise of, if I went through,
if I want this business to behere in a hundred years, what do
(11:04):
I need to do now in order tohelp inch my way towards that?
We, you mentioned founder ledbrands and.
We do at times recommend namechanges.
If you're far enough away froman exit that can make things a
little bit easier.
And even if it's not, it mightbe mostly symbolic, but just
(11:27):
saying that the founder is noteverything and not everything is
completely integral to thisthing, and it's not going to
fall apart if the founderleaves.
Charlotte Ellis Maldari (11:37):
You just mentioned, being far enough
out from a potential exit.
what stage should people startseeking counsel around this?
It doesn't sound like it's whenyou're ready to retire, It
sounds like it's more worthwhileand profitable to be considering
this well in advance.
You can give me an idea of thetimeframe, what that looks like
in an ideal scenario.
Jonathan Baker (11:57):
Yeah, so first you got to recognize that most
of these deals involve some sortof earn out and so you're going
to be required to stick aroundfor two to three years
afterwards, To get the fullvalue.
factor that two to three yearsin and then back up another two
to three years.
we like working with firms, twoor three years away beyond that.
the future is a little hard topredict, But two to three years
(12:19):
still gives you enough runway toshow some positive results.
and make decisions that willshow up when you start to sell
your business.
Charlotte Ellis Maldari (12:30):
one of the things that we did talk
about in our conversation inadvance was about inbound
marketing.
I love the inbound marketingstrategy that Punctuation itself
has, but you talked about itthrough the sense of your agency
clients.
can you give me an idea of whatkind of role that plays in
making an agency more sellable?
Jonathan Baker (12:49):
Having a strong inbound marketing plan is a
signal to buyers that Sales isnot reliant on the relationships
of the founder, for one.
Two, it also makes things andsmooths out areas where you
might have, slight downturns inrevenue.
(13:09):
Having an inbound plan in placecan help speed up a recovery.
And it also just gives buyersconfidence that the business is
paying off.
being well run, that it'sprocess minded, and that there
are multiple people have theirhands in sales effectively.
the more people that have theirhands in sales the less risky
(13:31):
the investment looks
Charlotte Ellis Maldari (13:32):
Yeah, absolutely.
To me, having an inboundmarketing strategy feels like an
insurance policy.
It feels like something thatyou've got running in the
background consistently, and youcan always pull the lever of
outbound when you need to topup.
That's right.
it doesn't feel like that frommy experience to a lot of
people.
it's interesting industry toindustry and we're increasingly
being referred work outside ofcreative agency world Where
(13:55):
people seem a little more opento inbound marketing, in the
past, I've heard and it's what Irecommend, And it's what we do
as well.
So I'm not knocking it at all.
some people feel like it'sdesperate to be doing their own
marketing, to be talking talkingnot about themselves, but about
themselves.
Just going out there and doingstuff.
They're like if we were busy, wewouldn't need to do this.
(14:16):
So isn't this an indicator thatwe are not busy enough and need
to get more work in.
I'm like if we consider thealternative, which is you
literally don't have any workand you're having to call people
for referrals, What ispreferable?
Is it not better that you havethat as a last resort?
I don't know how you'veexperienced this year, but what
I've seen is a lot of peoplecoming to Kaffeen to chat
(14:38):
because they've always dependedon referrals, and this year
referrals have dried up.
It's been a big trend from thestart of the year.
with referrals drying up and newbusiness from existing clients
slowing down, people whowouldn't have considered an
inbound marketing strategybefore reconsidering that.
Because they see the benefit ofit.
Now, this is not really aquestion, it's just an
(15:00):
opportunity for me to rantbecause the irony is that the
best time to start an inboundmarketing strategy that actually
brings you revenue is like ayear ago, right?
Or longer.
It's a bit like, when's the besttime to build a tree, to plant a
tree.
So yeah, I guess my nextquestion was going to be how do
you or how do you recommendeffectively balancing inbound
(15:20):
and outbound strategies outboundbeing the levers we pull when we
need clients pretty directly andwe need to just go and ask for
it particularly for high ticketcreative services we're not
talking here about things thatcost a grand we're talking about
£40k To millions per project,what does that look like to you?
Do you have any recommendations?
Jonathan Baker (15:41):
Yeah.
You hit the nail on the head,but one of the challenges that
these are high ticket items.
And so outbound.
You might get a lead in, butyou're not going to be able to
convert that lead immediately,at least for any considerable
amount of money.
The thing about inbound is itallows you to have a
conversation and a relationshipwith a prospect over time.
(16:03):
they get to know you, they dotheir screening as time goes on.
And it shortens that sales cyclewhen they're ready to buy,
right?
I think that inbound needs to besomething that you make a
certain amount of time forconsistently.
And if you're not doing itconsistently, it's not going to
work.
Outbound, you're right, can youcan, Spike it up, spike it down
(16:26):
like you invest money in it ordon't as necessary, but it
really needs to be on a strongfoundation of inbound cause
those outbound folks also aregoing to hopefully convert to,
inbound.
When we are doing outboundmarketing, we're pushing folks
to sign up for our inboundmarketing, like our newsletter
(16:47):
lists, our podcasts, our books.
So it all leads back to buildingthe lists that we own and have
some sort of control over.
Charlotte Ellis Maldari (16:55):
Yeah, absolutely.
do you see any misconceptionsaround inbound marketing amongst
agency owners?
And before you answer, I justwant to proffer one that I've
got.
I see two of the most successfultools for inbound for agencies
being podcast hosting andwriting a book, even a very slim
tone, but something that putsyour stamp of authority, it
(17:18):
makes it easier to get the sealof approval from prospective
clients To self select if theydecide to work with you, they've
already got an idea of yourpersonality, your views, you are
less likely to be in a pitchscenario.
What I find is that often peoplethink they're not qualified to
do either of those things yet.
people are paying you to do thisthing.
And in a specific service with aspecific industry.
(17:40):
They are paying you to be anexpert.
So what makes you think thatother people with similar needs
don't want to hear yourexpertise as well?
that's my beef about the biggestcommon misconception around
inbound marketing that I see.
Do you have any othermisconceptions that you see
amongst agencies when they'reapproaching inbound marketing?
Jonathan Baker (17:58):
imposter syndrome is real.
Everyone faces it to somedegree, but there's a lot of
value and expertise to be gainedin doing the thing, right?
just writing the book, you'regoing to be learning and
becoming an expert, just hostingthe podcast.
(18:20):
You're going to be talking toreally interesting folks like me
and learning as you go.
those are two very effectivetools.
One thing that we steer ourclients towards are inbound
tools that match up well withtheir personalities because for
inbound, in order to beeffective.
(18:40):
it has to be an ongoing thingand a founder is not going to do
an ongoing thing if they hateit.
it has to be something like dothey like writing, do they like
speaking, do they like being infront of large groups, do they
like more one on one typescenarios?
You can weigh all that to figureout what's the best sum of
inbound ideas for a particularpersonality.
Charlotte Ellis Maldari (19:04):
Yeah, absolutely.
the reason I mentioned podcastand book is I know book you
automatically think actually theway we do it when we work with
clients to write a book is tointerview them prepare questions
and chat through.
then the transcript of thatconversation becomes almost the
first draft that we edit down.
a lot of it is aroundconversation and a lot of agency
(19:24):
owners, I find much moreinclined to speak than they are
to And especially in a containedenvironment, not on a stage
that's not for everybody.
But have a kind of direct one toone conversation rather than put
pen to paper.
So that's typically why we endup going down that route with
clients, but completely agree ithas to be based on the
personality type.
Otherwise you're going to avoidit and
Jonathan Baker (19:44):
The
Charlotte Ellis Maldari (19:45):
word that keeps coming up for us is
consistency.
If you're inbound marketing towork, you need to be consistent.
You need to consistently beshowing up regardless of whether
you're feeling like it or not.
And, being prepared in advancefor the busy times, doing things
in batches, et cetera.
you mentioned a couple of otherthings that about imposter
syndrome and my next couple ofquestions we're going to be
around The difference betweenworking with US and UK agencies,
(20:09):
but before I get into that,because imposter syndrome I can
say as a British person is, itis definitely an issue for a lot
more people I feel on this smallisle than it is in the US.
From my experience of workingwith clients, but also just want
to say, I also really admirepeople who speak up about the
impact on, their mental health,Putting themselves outside of
their comfort zone, going beyondthat imposter syndrome.
(20:31):
And I have to say, kudos to DCB,your dad, because that is part
of his message.
When I listened to him speak andwhen I read his books, his
vulnerability and openness abouthis experiences in terms of
mental health have a massiveimpact on me.
it feels like a more inclusiveenvironment because it's hard to
(20:53):
stand up and show up.
It's really easy to criticizeand a lot of agencies with this
constant struggle, because somuch of the work that we produce
as creative agencies is open tosubjective opinions and there's
a lot of.
Throwing of stones from glasshouses, this is the reason that
a lot of people in myexperience, don't show up, don't
(21:14):
create content, don't do themore kind of inbound y,
attracting stuff.
Because they're like it's abouttheir peers and what their peers
are going to think, rather thanwhat their actual clients are
going to think.
Jonathan Baker (21:25):
for
Charlotte Ellis Maldari (21:25):
me, a big shift Is the focus from what
our peers think to caring aboutour clients, caring about the
people that actually give usmoney thinking about.
Jonathan Baker (21:36):
You Brits over there don't focus enough on that
part.
Charlotte Ellis Maldari (21:40):
Yeah, for sure.
For sure.
Yeah.
I'm reading an amazing book atthe moment.
That's another business leaderrecommended actually.
It's called The First Rule ofMastery and it's published by
the Harvard Business Press, thesubtitle is How to Stop Caring
About Other People's Opinions.
And the whole concept of FOPO.
you can take the dust jacket offand you can go on the tube and
(22:02):
everyone's Ooh, she's readingsomething from the Harvard
Business Press.
But actually it's about, I lovethat they've published that.
It's about the recognition ofthe fact that the first rule of
becoming a leader in your fieldof becoming better at your job
is overcoming this fear of otherpeople's opinions to a healthy
degree, not to the megalomaniacdegree, but, being able to do
(22:23):
the thing and stay in your lane,
Jonathan Baker (22:26):
And learn as you go.
Charlotte Ellis Maldari (22:28):
Yeah, absolutely.
So anyhow, moving on to U S andUK dynamics, and I don't want to
put you on the spot here, butI'm really fascinated because
you work with People on bothcontinents agencies on both
continents.
And I wanted to hear from yourperspective, what the major
differences are between the twomarkets regarding pricing client
expectations and businessculture beyond the imposter
(22:51):
syndrome stuff.
Jonathan Baker (22:53):
I think one of the most tangible differences we
see is that agency principals inthe UK don't pay themselves
nearly as much as what agencyprincipals in the U.
S.
pay themselves.
And staff salaries arerelatively even, but it's just
what you pay yourself.
About 20 percent is what we'vefound.
(23:14):
I think what drives a lot of theother differences is really the
client pool.
So in the U.
S., you've got a differenteconomy, right?
You've got this huge techsector.
I think generally you've got alittle bit more acceptance of
(23:35):
business risk.
And so you've got a reallystrong startup scene and
marketing is always needed forstartups.
And so in terms of the pool ofpotential.
Buyers of the work, the U.
S.
has a bit of a leg up.
It's also just a larger market.
(23:56):
And we see UK firms trying totap into that market a lot.
And I think if you're focusedonly on the UK, it can be really
easy to compete on price or tonot, make big bets to not niche
down like maybe you should.
(24:16):
niching down usually means,You're going to have to find
some international clients.
Charlotte Ellis Maldari (24:21):
Yep.
Jonathan Baker (24:22):
So yeah, that's
Charlotte Ellis Maldari (24:25):
No, I thought about five follow up
questions I wanted to ask you,but I didn't want to put you on
the spot about the US versus theUK, I am really curious about
exploring pricing a bit more.
One of the things that I'mconscious of is the difference
between, pricing models thatreflect the value that the
agency provides to the clientversus the UK.
the majority of agencies I thinkwould say that they've evolved
(24:47):
beyond time based billing, butthe reality is quite different.
they may not be sendingtimesheets across to clients,
but certainly in terms of theinternal pricing, they're
thinking about how long it'sgoing to take when they quote a
client, rather than what valueit's likely to bring that
client.
Can you speak to that Do youhave any recommendations
Jonathan Baker (25:05):
Yeah, You're right that people are still
building quotes based on hours,but I don't think that in and of
itself is bad.
What is bad is if you're notgetting paid for all the hours
you are putting into A client ora project.
(25:25):
we'll see firms building outtheir estimate, but then giving
the client way more hoursbecause they want to be good
people or are very bad atestimating.
This chronic over servicing ofclients can get you in trouble.
Even if you have a high hourlyrate, the first step is to Make
sure you're capturing all thehours that you are saying you're
(25:46):
working and make sure thatyou're estimating correctly And
then you can start inching upyour hourly rates, and then
maybe you start moving to moreof a value based pricing model,
but that is, light years aheadwhere most folks need to be, I
would say.
You really need to be focused ongetting paid for the work you're
doing first.
Charlotte Ellis Maldari (26:05):
And to me, this is inextricably linked
with imposter syndrome and theFOPO, the fear of other people's
opinions wanting to pleaserather than just get the job
done.
But at least that's what I seewhen I'm working with people.
it's interesting because I thinkyou're not going to solve that
problem with just a logicalsolution.
I think it needs to address theemotional side of it as well for
(26:26):
the people that is relevant todo you have to do that with your
firm much?
how do you address that whenthat comes up?
Jonathan Baker (26:32):
Yeah, we do all the time.
And it is personality specificsometimes if we're getting the
right signals, we might givethem a real kick in the pants.
Sometimes we might be a littlebit softer about it and try to
use data.
a lot of times these businessowners actually know this stuff.
(26:52):
They just don't necessarily wantto believe it or think that
there's an easier way to getaround it.
when they pay us money, they'repaying us to tell them stuff
they already know, but they justneed someone, in authority to
solidify it
Charlotte Ellis Malda (27:07):
Sometimes you just need permission to do
it.
This is what I found.
Okay, great.
Then moving on to you, I talkeda little bit about your own kind
of co podcast that you havebetween punctuation and when
without pitching just blur endscompany.
I'd be really curious to hearmore about this.
how has it contributed to yourmarketing and business
(27:28):
development efforts?
Jonathan Baker (27:32):
The two Bobs podcast is a pretty important
kind of leg of the stool interms of its contribution.
But beyond that, Blair and myfather just have a really strong
personal relationship andrespect each other.
they would be having thoseconversations.
Maybe they just wouldn't berecorded which is what makes it
fun.
(27:52):
we'll go on other people'spodcasts as well, which is what
I'm doing now.
you can get access to differentmarkets that way without having
to build them yourself in termsof, where it sits, it's probably
number two on our marketing toollist with number one being the
weekly newsletter and the blogposts that we create out of
(28:16):
those newsletters.
Charlotte Ellis Maldari (28:18):
And you talked about the stall and the
legs off.
what would the third thing be ifwe're talking about a milking
stall?
Jonathan Baker (28:25):
For us, it's paid media.
we use.
LinkedIn marketing and someGoogle marketing as well.
Charlotte Ellis Maldari (28:32):
Okay.
Not meta ads.
Jonathan Baker (28:35):
No, we've experimented, but you mentioned
B2C and B2B.
we haven't had much luck withB2B on Facebook.
Charlotte Ellis Maldari (28:42):
We should chat about that.
there's something that I thinkwould work for you.
Podcast related, but we'll dothat separately.
I was curious because I have acouple of.
Your dad's books.
Do you feel like they'reimportant?
what role do they have?
Whether they're attractingpeople initially, or shoring up
relationships with potentialclients how does it figure?
Jonathan Baker (29:00):
books are interesting.
They have a lot more longevitythan, a podcast episode, the
fact that you've written a bookis sometimes more important than
the content My father loveswriting and so part of it is
really personality based forhim, and it's a way for him to
structure his thinking.
It could be something that he'sjust really interested in,
(29:22):
doesn't necessarily have a firmpoint of view until he writes
about it.
it's important, but more of along tail kind of important and
it's not like we're relying onleads from books.
They're more of a way to helpprop up some of these other
other ways of marketing.
I
Charlotte Ellis Maldari (29:40):
had this experience recently where
an agency leader wanted to workwith me, but he had to convince
his other.
And we'd done some light workingtogether in advance, but he
wanted to move to something thatwas going to be much more time
and financially intensive forthe business.
he asked me to write a proposalfor this piece of work.
And then he said and I queuedthis up in our last board
meeting and I gave everybody acopy of your book and I was
(30:03):
like, wow, okay.
I never even thought of thatscenario for us, it's always
been, the beginning of thatmarketing process, it's been a
lead magnet effectively, wewould call it.
yes, it is availablecommercially to purchase, but
for us, it's been somethingwe've given away to people that
we'd like to introduce ourselvesto and build some goodwill with
initially.
hopefully it will lead tosomething.
I definitely think that isunderlining the point It's the
(30:26):
fact you've written something.
It's less about the content.
Although, it doesn't feel likethat when you're writing it,
it's not like you're justputting any fluff in it.
the fact that you've taken thetime to do it, and the fact that
it even exists physically isnormally like it is that kind of
like stamp of authority thatyou've done it.
Even if it's self published orwhatever else, you've gone to
(30:47):
the lengths to do something.
It's interesting the impact ithas and not necessarily
something that I'd anticipatedin advance.
what are the most commonchallenges that independent
agencies face in their growthjourneys and how do you address
them?
So I guess I'm thinking aboutbefore they even come into
contact with you, which would bethe, two to three years before
(31:08):
they want to retire fully andthen two to three years further
when they're starting to consultwith you about how to make
themselves more sellable.
are there any other challengesthat they face in their growth
journeys?
And do you have advice on how toaddress them?
Jonathan Baker (31:22):
I think the challenges are tied to
themselves.
And you have to, first get outof your own way.
We see a lot of folks that aretoo focused on building the
right culture and not as focusedon building the right firm.
they can end up accidentallybuilding a poor culture coddling
(31:42):
employees or giving them toomuch grace, letting them stick
around for too long, instead ofbuilding a team with a specific
goal, which is to do great workfor clients and make money.
And so trying to.
Get people into the rightmindset of, it's okay to build
accountability with your team.
(32:02):
It's okay to put structure inplace and, require things.
we're also okay with firms thatare, still clinging to the brick
and mortar idea of, in personcollaboration, Everyone's going
remote, but.
I don't think that's the rightmove for everyone.
So we're okay making that a partof how you manage.
(32:24):
as long as you are not,consistently writing checks to
prop up the business, it can beeasy to ignore the financial
side of things, particularly ifyou are a creative you're doing
yourself a disservice if you'renot educating yourself about the
finances of the business,catching something now can mean
saving lots of money in the longrun.
(32:46):
engaging with the parts of thebusiness that you know are
important but aren't as funearly on is really important.
Charlotte Ellis Maldari (32:54):
I have a lot of thoughts about this.
One of them was, I interviewedsomebody recently for the
podcast who works, he used to beagency side and he's a
strategist who now worksdirectly with clients.
He said I don't think that manybusiness leaders, CEOs realize
they need to be spending about70 to 75 percent of their time
(33:14):
selling.
certainly not the CEOs ormanaging directors of most
design agencies They usuallystart a business because they
want to do more of thecreativity, not more of the
business stuff.
They've had very little exposureto that.
They just don't want to becreatively censored anymore.
So they start a business andthen they're wearing about 30
other hats and they've got evenless time for creativity.
(33:36):
I do some guest lecturing atuniversities because so many
people are leaving with a degreeand saying, I just want to sit
at my own practice.
I don't want to work for anybodyelse.
I'm aware that they're leavingwith zero business skills, like
zero understanding of What ittakes to attract and win clients
for a creative agency.
they're going into the worldwith none of this experience.
So we do an intensive sessionwhere we give them the advice
(33:59):
around that.
Part of that is go get at leastfive years in another agency
before you decide to do this.
But.
my experience is that it's notjust about knowing the stuff.
It's also about, coming back toidentity again.
I think so this, for me, this isfascinating.
So much of this stuff is tied upwith with the ego and the mental
and emotional side of it.
(34:19):
if you identify as a creative,you naturally, I've seen people
avoid the skills that are morebusiness focused.
they're not thinking about, theydon't have their eyes on the
prize I hear what you're talkingabout with the over catering to
your workforce and ending upwith further complications,
(34:40):
under the guise of creating agreat culture.
I think that has been a bigchallenge over the last four
years, at least with hosting inthe UK.
partially because of the greatresignation and partially
because, you spoke about bricksand mortar versus digital.
many employees now have theoption of working anywhere
because they've got these remotefirst options.
and then there's a generationalthing, which I can't really get
into because I don't manageanybody of the younger
generations, but I hear friendsspeak to.
(35:03):
There's a lot of kind of thingshave all come together, which
make, I think, the industryreally right for over catering
to staff and losing sight of thebigger mission and goal of the
business and what your missionand goal are as an agency leader
in terms of what you want yourexit to look like.
I find that fascinating.
And I think there's it'sprobably Workshop afternoon on
how to define like how far youare away from your goal and
(35:27):
mission as a business and whatyou need to do to get back on
track.
from a culture perspective.
So you talked about consistencyand you talked about, leaning
into the skills that areimportant.
So that you you appreciate andcome naturally to you as a
business.
An agency leader, do you haveany other recommendations about
(35:48):
being consistent with youragency's marketing efforts,
particularly for busy agencyleaders, what I hear a lot is we
were so busy, we stopped doingthat and now we're paying the
price for it.
Jonathan Baker (36:00):
Yeah, I think, the first is practice what you
preach.
we're telling them to dosomething consistently, but we
have to be doing it ourselvesconsistently.
And then we can speak to howthis has helped us through, some
of the rougher patches we've hador over time how it builds on
each other.
When we do our total businessreset program, we also do.
(36:23):
anonymous interviews of thestaff.
sometimes we can use staffquotes instead of us saying it
to show that consistencymatters, Everyone on your team
is asking you to spend more timeon business development so that
we can start getting the righttype of clients or projects And
that can only happen if you'redoing it consistently.
(36:43):
And yeah we show don't tell.
And then we also.
Don't tell with their own staff.
Charlotte Ellis Maldari (36:52):
Yeah, interesting.
a big thing for us is clientlistening, listening to not just
clients, but prospects andinterviewing them independently
to understand what they valueabout the business what
challenges they're facing, whatthey're hoping to address, what
their hopes are, dreams are, andfears and challenges, et cetera,
(37:13):
and then.
I think a lot of people do speakinto that in terms of marketing,
which makes you come across assome kind of psychic because
you're listening to them andthen you're repeating things
back to them.
But but also has the benefit ofgetting some incredible quotes
about the business or a podcast.
Objective understanding becauseit's normally an intermediary
having these conversations withclients to understand what is
possibly not working that can becourse corrected.
(37:35):
I personally, I don't know howyou find this as a business
leader, but I find it reallyhard getting feedback.
But I think it's integral togrowth and
Jonathan Baker (37:44):
It's something you certainly have to get used
to.
I think most folks who startbusinesses have confidence or
else you wouldn't start thebusiness.
it's hard setting that asideintentionally and trying to take
feedback to make yourselfbetter.
But it's the only way to grow.
Charlotte Ellis Mal (38:01):
Absolutely.
Okay.
Amazing.
I've so enjoyed our chat today,Jonathan.
Thank you.
I have about 30 sub questionsbut perhaps for another
conversation and really want tothank you for being here.
is there any way you want todirect people to who are
listening to this, who want tofind out more about punctuation?
Jonathan Baker (38:18):
You can go to our website, punctuation.
com.
We've got a ton of free contentthere.
You can sign up for our weeklynewsletter.
You can contact us directly.
Bye.
Charlotte Ellis Maldar (38:26):
Amazing.
I love that you have the dot comfor that.
I'm currently wrangling over thedot com for my own business.
Jonathan Baker (38:31):
I get it.
Charlotte Ellis Maldari (38:33):
Great to speak.
Thank you.
Hi and welcome to today's episode of
the Kaffeen Espresso podcast.
today we welcome Jonathan Baker,who's the head of the M& A
practice at Punctuation, whichis a consultancy specializing in
small to mid sized marketingservices firms.
he's an Emory Universitygraduate and a former craft
brewery owner.
My husband would have a lot tochat about with you on that
(00:21):
front, I'm sure.
And Jonathan sheds light oncrucial aspects like how buyers
determine firm value, theemotional toll.
During the M& A process and thesignificance of deal term terms
over valuation.
I'm really excited for you tojoin us as we navigate the
intricate world of firmvaluation and strategic decision
(00:42):
making, which I know are on theminds of a lot of the people
listening today whooverwhelmingly are agency
leaders.
So welcome Jonathan.
Jonathan Baker (00:52):
Thank you.
Thanks for having me.
Charlotte Ellis Maldari (00:54):
So I've not met Jonathan before, apart
from on our pre chat before werecorded, but I'm a huge fan of
his colleague's work over atPunctuation.
I've got a couple of David CBaker books knocking around.
I don't actually have one on mydesktop right now.
And He's somebody I followedthroughout my career, as well as
Blair Enns, who, of course, ishis co co host on the Two Bobs
(01:16):
podcast, which I'm sure many ofour listeners would also be
familiar with.
So it's an honor to be speakingto somebody over at Punctuation.
So can you tell us a bit moreabout your journey and what led
you to your current role atPunctuation, Jonathan?
I really want to hear more aboutthe the steer from Craft Brewery
into M& A.
Jonathan Baker (01:36):
Yeah steep left turn.
So I started my career doingmarketing strategy consulting
and then left in 2011 to start abrewery, Monday Night Brewing
based in Atlanta.
We grew that up.
I have two business partnersthere actually still own it, but
I'm not running it.
So two business partners runningthe day to day.
(01:59):
And we went through the M& Aprocess.
We were approached.
A while back at this point, wentthrough the whole process ended
up getting left at the altar.
But that experience reallypiqued my interest in MNA and it
was a lot more.
I think squishy and subjectivethan I was expecting it to be
(02:22):
and I saw an opportunity to jumpon board with my father, David
C.
Baker, to help other agencyowners.
help navigate the process aswell.
About five years now ago Ipivoted to start to build out
and put a little bit more rigorbehind our M&A practice at
(02:43):
punctuation.
Charlotte Ellis Maldari (02:43):
I have also been through that process,
albeit on a very small scale andnot within an agency When I left
agency world initially, I set upa consumer facing business,
probably the first and last timeI'll ever do that, definitely a
B2B person.
It turns out, but yeah Iactually sold my firm that I
(03:04):
founded like a week before Igave birth to my first child.
Talk about a hard deadline, butit was yeah, it was a really
interesting process and ithelped me to appreciate when I
set up my next business, justwhat metrics are important
because I feel like as businessowners, if you've not been
through that process before,there are certain things we have
in mind that we think are goingto be important and valuable.
And actually when it comes downto it, It's a whole set of other
(03:27):
metrics.
it's interesting to startanother business after having
been through it was not a bigsell by any stretch of the
imagination, but having beenthrough that process and just
looking at it through adifferent lens.
Yeah really excited to have thischat today.
So taking a step back frombefore.
I guess before your involvementat Punctuation, what inspired
Punctuation's focus onindependent agencies and how has
(03:48):
this shaped your approach?
I'm curious because this is alsowhat we tend to focus on here at
Kaffeen.
Jonathan Baker (03:54):
Yeah, it was a pretty honest way in.
My father owned an independentagency in the mid 90s and
recognized that at the timethere really weren't a lot of
smart.
Voices speaking to the owners ofthose firms.
he wanted to, be that voice.
And so starting in the latenineties, started up a practice
(04:15):
and wasn't necessarily focusedon marketing firms at the
beginning, right?
You're just trying to takewhatever work you can get, but
over time was able to narrowfocus and now I think is really,
well known in the space.
Charlotte Ellis Maldari (04:29):
Yeah, absolutely.
Very much when I became amarketing director at a agency
first time, which was back in2011, the very beginning of
2011, there were only a coupleof names on my radar.
people who were supportingagencies that, and who I went
along to listen to speak whenthey came to the UK.
So yeah, certainly resonate withthe fact that there wasn't a lot
(04:52):
of support around early days.
But yeah, that's it'sinteresting to see that you've I
guess Tighten the grip onindependent agencies.
That sounds awful when I say itlike that, but really focusing
and niching down knowing whatyour specialism is and being
able to lean into that is amassive asset for my clients,
when we're helping them to focuson one particular area and speak
(05:13):
to the challenges of theirclients.
So for independent agency ownerswho are considering M& A, what
are the key factors to be M& Aready in your opinion?
Jonathan Baker (05:24):
It depends on where you're starting from,
right?
But I would say some of the keythings that we help agencies
think through is cleaning upyour financials and making sure
that they're presented in theright way and that you also are
separating business and personalto the extent possible.
Charlotte Ellis Maldari (05:44):
That's a challenge.
Jonathan Baker (05:45):
It can be, because there are tax advantages
sometimes to running personalthrough the business.
Positioning is certainly an areaof focus because the tighter the
positioning, usually the higherthe value of the firm, or at
least the higher the multiplegiven a similar size firm.
We want agency owners to paythemselves a market rate.
(06:07):
That's something that we oftenhave conversations around.
And, there's really good reasonswhy you should start doing that
now if you're not.
And, I think the last thing I'llmention is just reliance on the
founder can be a big concern,particularly for smaller firms.
And how have you demonstratedthat the firm is not reliant on
(06:28):
you?
Do you have business developmentprocesses in place?
Do you have, other people doingsome of this work?
Cause otherwise you're gonnaeither scare buyers away or set
yourself up for a low balloffer.
Charlotte Ellis Maldari (06:43):
Yeah.
in the chat prior to thisrecording talked about, I know I
talked about at least that thisis really fascinating moment for
me when I've spent my entirecareer working with agencies
apart from that blip with theconsumer facing business.
it's always fascinating to methat the money is In the the
(07:03):
imagination of your design team,come from a particular design,
particularly design focusbackground, and the
relationships that the seniorleaders have and the rapport
that they have.
And really it, apart from theMacs and the MacBook pros that
are sat on desks, that is almostthe beginning and the end of it,
as far as I can see, like somuch of it is wrapped up in who
(07:24):
your team is and what therapport is and how much you're
creative team get the clientbriefs.
And I find that a reallyfascinating thing.
Often we talk about the magicthat a creative agency brings to
a brief.
And that being the differencebetween a successful project or
not.
when clients typically arecoming to me, it's either when
they're thinking about growing,or they are thinking about
(07:46):
succession planning and how toextricate the lead personality
in the business from thebusiness, from their client's
perception of that separationyou're talking about.
I find that is often a realstruggle because so much of the
ego is tied up in it as well, sowho they've been for so long,
then trying to remove himselffrom that to get a good sale
price is exceptionally difficulton an emotional and mental
(08:09):
health level.
What advice would you give toleaders who are transitioning
their agencies to maybemanagement buyout, or maybe
they're looking to be acquired.
especially those who have kindof founder led branding, as we
know many agencies actually, theliteral name of the agency Are
the surnames of the people whofounded it.
And that's not an uncommonscenario.
(08:30):
Do you have any advice in thatsituation?
Jonathan Baker (08:33):
Yeah, I think first there's a misconception
that in order to be the mostsellable, you need to be the
most withdrawn from your firmand that is not the case like
we, we don't want the foundercompletely out of the business.
We want the founder focused onthe things that a founder should
be focused on, which is, thestrategic direction of the firm
high level financials andbusiness development and sales.
(08:57):
Those are usually the mainthings.
And Part of it is just makingsure that they are putting
systems in place in order to beable to scale the agency.
And I think regardless of theindustry, scale requires the
founders giving up control,right?
So that's not unique tomarketing services.
(09:18):
And buyers are looking forfounders who are willing to give
up that control.
So that They can achieve somescale.
You're right about the personalnature of this, right?
Like it's your baby in a lot ofways.
And I don't necessarily havespecific advice there because it
really is so dependent on theperson and their personality and
(09:39):
how much they're, Their selfidentity might be tied up in the
business.
Yeah.
We try to coach folks, don't tieyour personal identity up in the
business, right?
That's just what you do.
But who are you?
Charlotte Ellis Maldari (09:49):
Easier said than done.
Yeah.
Yeah.
Jonathan Baker (09:52):
What?
Get a hobby.
I don't know.
Charlotte Ellis Maldari (09:54):
Yeah.
Absolutely.
I'll get a therapist.
I've won all the other ones.
Jonathan Baker (09:58):
Yeah, and we function as therapists
throughout the process.
That's our role in a lot of waysbecause there's really no one
else that's understands whatyou're going through and can
talk through it with you.
Charlotte Ellis Maldari (10:09):
It's counsel.
Jonathan Baker (10:10):
Yes.
Charlotte Ellis Maldari (10:12):
Okay.
And we talked about, you talkedin you touched very briefly upon
the fact that you should sorry,I'm going to be paraphrasing
now, but that you would thinkabout scaling your business.
be intentional about it shore uprelationships with existing
clients and ensure that you'reattracting clients.
people on an ongoing basis toyour firm.
Do you have any tips on how toensure that agencies are
(10:35):
building long term value toattract potential buyers aside
from potential clients?
Jonathan Baker (10:43):
A lot of the things that make a business more
sellable are the same thingsthat make a business well run.
And so if you're building a wellrun business for the future in
all likelihood, you're buildinga sellable business.
So if you go through the thoughtexercise of, if I went through,
if I want this business to behere in a hundred years, what do
(11:04):
I need to do now in order tohelp inch my way towards that?
We, you mentioned founder ledbrands and.
We do at times recommend namechanges.
If you're far enough away froman exit that can make things a
little bit easier.
And even if it's not, it mightbe mostly symbolic, but just
(11:27):
saying that the founder is noteverything and not everything is
completely integral to thisthing, and it's not going to
fall apart if the founderleaves.
Charlotte Ellis Maldari (11:37):
You just mentioned, being far enough
out from a potential exit.
what stage should people startseeking counsel around this?
It doesn't sound like it's whenyou're ready to retire, It
sounds like it's more worthwhileand profitable to be considering
this well in advance.
You can give me an idea of thetimeframe, what that looks like
in an ideal scenario.
Jonathan Baker (11:57):
Yeah, so first you got to recognize that most
of these deals involve some sortof earn out and so you're going
to be required to stick aroundfor two to three years
afterwards, To get the fullvalue.
factor that two to three yearsin and then back up another two
to three years.
we like working with firms, twoor three years away beyond that.
the future is a little hard topredict, But two to three years
(12:19):
still gives you enough runway toshow some positive results.
and make decisions that willshow up when you start to sell
your business.
Charlotte Ellis Maldari (12:30):
one of the things that we did talk
about in our conversation inadvance was about inbound
marketing.
I love the inbound marketingstrategy that Punctuation itself
has, but you talked about itthrough the sense of your agency
clients.
can you give me an idea of whatkind of role that plays in
making an agency more sellable?
Jonathan Baker (12:49):
Having a strong inbound marketing plan is a
signal to buyers that Sales isnot reliant on the relationships
of the founder, for one.
Two, it also makes things andsmooths out areas where you
might have, slight downturns inrevenue.
(13:09):
Having an inbound plan in placecan help speed up a recovery.
And it also just gives buyersconfidence that the business is
paying off.
being well run, that it'sprocess minded, and that there
are multiple people have theirhands in sales effectively.
the more people that have theirhands in sales the less risky
(13:31):
the investment looks
Charlotte Ellis Maldari (13:32):
Yeah, absolutely.
To me, having an inboundmarketing strategy feels like an
insurance policy.
It feels like something thatyou've got running in the
background consistently, and youcan always pull the lever of
outbound when you need to topup.
That's right.
it doesn't feel like that frommy experience to a lot of
people.
it's interesting industry toindustry and we're increasingly
being referred work outside ofcreative agency world Where
(13:55):
people seem a little more opento inbound marketing, in the
past, I've heard and it's what Irecommend, And it's what we do
as well.
So I'm not knocking it at all.
some people feel like it'sdesperate to be doing their own
marketing, to be talking talkingnot about themselves, but about
themselves.
Just going out there and doingstuff.
They're like if we were busy, wewouldn't need to do this.
(14:16):
So isn't this an indicator thatwe are not busy enough and need
to get more work in.
I'm like if we consider thealternative, which is you
literally don't have any workand you're having to call people
for referrals, What ispreferable?
Is it not better that you havethat as a last resort?
I don't know how you'veexperienced this year, but what
I've seen is a lot of peoplecoming to Kaffeen to chat
(14:38):
because they've always dependedon referrals, and this year
referrals have dried up.
It's been a big trend from thestart of the year.
with referrals drying up and newbusiness from existing clients
slowing down, people whowouldn't have considered an
inbound marketing strategybefore reconsidering that.
Because they see the benefit ofit.
Now, this is not really aquestion, it's just an
(15:00):
opportunity for me to rantbecause the irony is that the
best time to start an inboundmarketing strategy that actually
brings you revenue is like ayear ago, right?
Or longer.
It's a bit like, when's the besttime to build a tree, to plant a
tree.
So yeah, I guess my nextquestion was going to be how do
you or how do you recommendeffectively balancing inbound
(15:20):
and outbound strategies outboundbeing the levers we pull when we
need clients pretty directly andwe need to just go and ask for
it particularly for high ticketcreative services we're not
talking here about things thatcost a grand we're talking about
£40k To millions per project,what does that look like to you?
Do you have any recommendations?
Jonathan Baker (15:41):
Yeah.
You hit the nail on the head,but one of the challenges that
these are high ticket items.
And so outbound.
You might get a lead in, butyou're not going to be able to
convert that lead immediately,at least for any considerable
amount of money.
The thing about inbound is itallows you to have a
conversation and a relationshipwith a prospect over time.
(16:03):
they get to know you, they dotheir screening as time goes on.
And it shortens that sales cyclewhen they're ready to buy,
right?
I think that inbound needs to besomething that you make a
certain amount of time forconsistently.
And if you're not doing itconsistently, it's not going to
work.
Outbound, you're right, can youcan, Spike it up, spike it down
(16:26):
like you invest money in it ordon't as necessary, but it
really needs to be on a strongfoundation of inbound cause
those outbound folks also aregoing to hopefully convert to,
inbound.
When we are doing outboundmarketing, we're pushing folks
to sign up for our inboundmarketing, like our newsletter
(16:47):
lists, our podcasts, our books.
So it all leads back to buildingthe lists that we own and have
some sort of control over.
Charlotte Ellis Maldari (16:55):
Yeah, absolutely.
do you see any misconceptionsaround inbound marketing amongst
agency owners?
And before you answer, I justwant to proffer one that I've
got.
I see two of the most successfultools for inbound for agencies
being podcast hosting andwriting a book, even a very slim
tone, but something that putsyour stamp of authority, it
(17:18):
makes it easier to get the sealof approval from prospective
clients To self select if theydecide to work with you, they've
already got an idea of yourpersonality, your views, you are
less likely to be in a pitchscenario.
What I find is that often peoplethink they're not qualified to
do either of those things yet.
people are paying you to do thisthing.
And in a specific service with aspecific industry.
(17:40):
They are paying you to be anexpert.
So what makes you think thatother people with similar needs
don't want to hear yourexpertise as well?
that's my beef about the biggestcommon misconception around
inbound marketing that I see.
Do you have any othermisconceptions that you see
amongst agencies when they'reapproaching inbound marketing?
Jonathan Baker (17:58):
imposter syndrome is real.
Everyone faces it to somedegree, but there's a lot of
value and expertise to be gainedin doing the thing, right?
just writing the book, you'regoing to be learning and
becoming an expert, just hostingthe podcast.
(18:20):
You're going to be talking toreally interesting folks like me
and learning as you go.
those are two very effectivetools.
One thing that we steer ourclients towards are inbound
tools that match up well withtheir personalities because for
inbound, in order to beeffective.
(18:40):
it has to be an ongoing thingand a founder is not going to do
an ongoing thing if they hateit.
it has to be something like dothey like writing, do they like
speaking, do they like being infront of large groups, do they
like more one on one typescenarios?
You can weigh all that to figureout what's the best sum of
inbound ideas for a particularpersonality.
Charlotte Ellis Maldari (19:04):
Yeah, absolutely.
the reason I mentioned podcastand book is I know book you
automatically think actually theway we do it when we work with
clients to write a book is tointerview them prepare questions
and chat through.
then the transcript of thatconversation becomes almost the
first draft that we edit down.
a lot of it is aroundconversation and a lot of agency
(19:24):
owners, I find much moreinclined to speak than they are
to And especially in a containedenvironment, not on a stage
that's not for everybody.
But have a kind of direct one toone conversation rather than put
pen to paper.
So that's typically why we endup going down that route with
clients, but completely agree ithas to be based on the
personality type.
Otherwise you're going to avoidit and
Jonathan Baker (19:44):
The
Charlotte Ellis Maldari (19:45):
word that keeps coming up for us is
consistency.
If you're inbound marketing towork, you need to be consistent.
You need to consistently beshowing up regardless of whether
you're feeling like it or not.
And, being prepared in advancefor the busy times, doing things
in batches, et cetera.
you mentioned a couple of otherthings that about imposter
syndrome and my next couple ofquestions we're going to be
around The difference betweenworking with US and UK agencies,
(20:09):
but before I get into that,because imposter syndrome I can
say as a British person is, itis definitely an issue for a lot
more people I feel on this smallisle than it is in the US.
From my experience of workingwith clients, but also just want
to say, I also really admirepeople who speak up about the
impact on, their mental health,Putting themselves outside of
their comfort zone, going beyondthat imposter syndrome.
(20:31):
And I have to say, kudos to DCB,your dad, because that is part
of his message.
When I listened to him speak andwhen I read his books, his
vulnerability and openness abouthis experiences in terms of
mental health have a massiveimpact on me.
it feels like a more inclusiveenvironment because it's hard to
(20:53):
stand up and show up.
It's really easy to criticizeand a lot of agencies with this
constant struggle, because somuch of the work that we produce
as creative agencies is open tosubjective opinions and there's
a lot of.
Throwing of stones from glasshouses, this is the reason that
a lot of people in myexperience, don't show up, don't
(21:14):
create content, don't do themore kind of inbound y,
attracting stuff.
Because they're like it's abouttheir peers and what their peers
are going to think, rather thanwhat their actual clients are
going to think.
Jonathan Baker (21:25):
for
Charlotte Ellis Maldari (21:25):
me, a big shift Is the focus from what
our peers think to caring aboutour clients, caring about the
people that actually give usmoney thinking about.
Jonathan Baker (21:36):
You Brits over there don't focus enough on that
part.
Charlotte Ellis Maldari (21:40):
Yeah, for sure.
For sure.
Yeah.
I'm reading an amazing book atthe moment.
That's another business leaderrecommended actually.
It's called The First Rule ofMastery and it's published by
the Harvard Business Press, thesubtitle is How to Stop Caring
About Other People's Opinions.
And the whole concept of FOPO.
you can take the dust jacket offand you can go on the tube and
(22:02):
everyone's Ooh, she's readingsomething from the Harvard
Business Press.
But actually it's about, I lovethat they've published that.
It's about the recognition ofthe fact that the first rule of
becoming a leader in your fieldof becoming better at your job
is overcoming this fear of otherpeople's opinions to a healthy
degree, not to the megalomaniacdegree, but, being able to do
(22:23):
the thing and stay in your lane,
Jonathan Baker (22:26):
And learn as you go.
Charlotte Ellis Maldari (22:28):
Yeah, absolutely.
So anyhow, moving on to U S andUK dynamics, and I don't want to
put you on the spot here, butI'm really fascinated because
you work with People on bothcontinents agencies on both
continents.
And I wanted to hear from yourperspective, what the major
differences are between the twomarkets regarding pricing client
expectations and businessculture beyond the imposter
(22:51):
syndrome stuff.
Jonathan Baker (22:53):
I think one of the most tangible differences we
see is that agency principals inthe UK don't pay themselves
nearly as much as what agencyprincipals in the U.
S.
pay themselves.
And staff salaries arerelatively even, but it's just
what you pay yourself.
About 20 percent is what we'vefound.
(23:14):
I think what drives a lot of theother differences is really the
client pool.
So in the U.
S., you've got a differenteconomy, right?
You've got this huge techsector.
I think generally you've got alittle bit more acceptance of
(23:35):
business risk.
And so you've got a reallystrong startup scene and
marketing is always needed forstartups.
And so in terms of the pool ofpotential.
Buyers of the work, the U.
S.
has a bit of a leg up.
It's also just a larger market.
(23:56):
And we see UK firms trying totap into that market a lot.
And I think if you're focusedonly on the UK, it can be really
easy to compete on price or tonot, make big bets to not niche
down like maybe you should.
(24:16):
niching down usually means,You're going to have to find
some international clients.
Charlotte Ellis Maldari (24:21):
Yep.
Jonathan Baker (24:22):
So yeah, that's
Charlotte Ellis Maldari (24:25):
No, I thought about five follow up
questions I wanted to ask you,but I didn't want to put you on
the spot about the US versus theUK, I am really curious about
exploring pricing a bit more.
One of the things that I'mconscious of is the difference
between, pricing models thatreflect the value that the
agency provides to the clientversus the UK.
the majority of agencies I thinkwould say that they've evolved
(24:47):
beyond time based billing, butthe reality is quite different.
they may not be sendingtimesheets across to clients,
but certainly in terms of theinternal pricing, they're
thinking about how long it'sgoing to take when they quote a
client, rather than what valueit's likely to bring that
client.
Can you speak to that Do youhave any recommendations
Jonathan Baker (25:05):
Yeah, You're right that people are still
building quotes based on hours,but I don't think that in and of
itself is bad.
What is bad is if you're notgetting paid for all the hours
you are putting into A client ora project.
(25:25):
we'll see firms building outtheir estimate, but then giving
the client way more hoursbecause they want to be good
people or are very bad atestimating.
This chronic over servicing ofclients can get you in trouble.
Even if you have a high hourlyrate, the first step is to Make
sure you're capturing all thehours that you are saying you're
(25:46):
working and make sure thatyou're estimating correctly And
then you can start inching upyour hourly rates, and then
maybe you start moving to moreof a value based pricing model,
but that is, light years aheadwhere most folks need to be, I
would say.
You really need to be focused ongetting paid for the work you're
doing first.
Charlotte Ellis Maldari (26:05):
And to me, this is inextricably linked
with imposter syndrome and theFOPO, the fear of other people's
opinions wanting to pleaserather than just get the job
done.
But at least that's what I seewhen I'm working with people.
it's interesting because I thinkyou're not going to solve that
problem with just a logicalsolution.
I think it needs to address theemotional side of it as well for
(26:26):
the people that is relevant todo you have to do that with your
firm much?
how do you address that whenthat comes up?
Jonathan Baker (26:32):
Yeah, we do all the time.
And it is personality specificsometimes if we're getting the
right signals, we might givethem a real kick in the pants.
Sometimes we might be a littlebit softer about it and try to
use data.
a lot of times these businessowners actually know this stuff.
(26:52):
They just don't necessarily wantto believe it or think that
there's an easier way to getaround it.
when they pay us money, they'repaying us to tell them stuff
they already know, but they justneed someone, in authority to
solidify it
Charlotte Ellis Malda (27:07):
Sometimes you just need permission to do
it.
This is what I found.
Okay, great.
Then moving on to you, I talkeda little bit about your own kind
of co podcast that you havebetween punctuation and when
without pitching just blur endscompany.
I'd be really curious to hearmore about this.
how has it contributed to yourmarketing and business
(27:28):
development efforts?
Jonathan Baker (27:32):
The two Bobs podcast is a pretty important
kind of leg of the stool interms of its contribution.
But beyond that, Blair and myfather just have a really strong
personal relationship andrespect each other.
they would be having thoseconversations.
Maybe they just wouldn't berecorded which is what makes it
fun.
(27:52):
we'll go on other people'spodcasts as well, which is what
I'm doing now.
you can get access to differentmarkets that way without having
to build them yourself in termsof, where it sits, it's probably
number two on our marketing toollist with number one being the
weekly newsletter and the blogposts that we create out of
(28:16):
those newsletters.
Charlotte Ellis Maldari (28:18):
And you talked about the stall and the
legs off.
what would the third thing be ifwe're talking about a milking
stall?
Jonathan Baker (28:25):
For us, it's paid media.
we use.
LinkedIn marketing and someGoogle marketing as well.
Charlotte Ellis Maldari (28:32):
Okay.
Not meta ads.
Jonathan Baker (28:35):
No, we've experimented, but you mentioned
B2C and B2B.
we haven't had much luck withB2B on Facebook.
Charlotte Ellis Maldari (28:42):
We should chat about that.
there's something that I thinkwould work for you.
Podcast related, but we'll dothat separately.
I was curious because I have acouple of.
Your dad's books.
Do you feel like they'reimportant?
what role do they have?
Whether they're attractingpeople initially, or shoring up
relationships with potentialclients how does it figure?
Jonathan Baker (29:00):
books are interesting.
They have a lot more longevitythan, a podcast episode, the
fact that you've written a bookis sometimes more important than
the content My father loveswriting and so part of it is
really personality based forhim, and it's a way for him to
structure his thinking.
It could be something that he'sjust really interested in,
(29:22):
doesn't necessarily have a firmpoint of view until he writes
about it.
it's important, but more of along tail kind of important and
it's not like we're relying onleads from books.
They're more of a way to helpprop up some of these other
other ways of marketing.
I
Charlotte Ellis Maldari (29:40):
had this experience recently where
an agency leader wanted to workwith me, but he had to convince
his other.
And we'd done some light workingtogether in advance, but he
wanted to move to something thatwas going to be much more time
and financially intensive forthe business.
he asked me to write a proposalfor this piece of work.
And then he said and I queuedthis up in our last board
meeting and I gave everybody acopy of your book and I was
(30:03):
like, wow, okay.
I never even thought of thatscenario for us, it's always
been, the beginning of thatmarketing process, it's been a
lead magnet effectively, wewould call it.
yes, it is availablecommercially to purchase, but
for us, it's been somethingwe've given away to people that
we'd like to introduce ourselvesto and build some goodwill with
initially.
hopefully it will lead tosomething.
I definitely think that isunderlining the point It's the
(30:26):
fact you've written something.
It's less about the content.
Although, it doesn't feel likethat when you're writing it,
it's not like you're justputting any fluff in it.
the fact that you've taken thetime to do it, and the fact that
it even exists physically isnormally like it is that kind of
like stamp of authority thatyou've done it.
Even if it's self published orwhatever else, you've gone to
(30:47):
the lengths to do something.
It's interesting the impact ithas and not necessarily
something that I'd anticipatedin advance.
what are the most commonchallenges that independent
agencies face in their growthjourneys and how do you address
them?
So I guess I'm thinking aboutbefore they even come into
contact with you, which would bethe, two to three years before
(31:08):
they want to retire fully andthen two to three years further
when they're starting to consultwith you about how to make
themselves more sellable.
are there any other challengesthat they face in their growth
journeys?
And do you have advice on how toaddress them?
Jonathan Baker (31:22):
I think the challenges are tied to
themselves.
And you have to, first get outof your own way.
We see a lot of folks that aretoo focused on building the
right culture and not as focusedon building the right firm.
they can end up accidentallybuilding a poor culture coddling
(31:42):
employees or giving them toomuch grace, letting them stick
around for too long, instead ofbuilding a team with a specific
goal, which is to do great workfor clients and make money.
And so trying to.
Get people into the rightmindset of, it's okay to build
accountability with your team.
(32:02):
It's okay to put structure inplace and, require things.
we're also okay with firms thatare, still clinging to the brick
and mortar idea of, in personcollaboration, Everyone's going
remote, but.
I don't think that's the rightmove for everyone.
So we're okay making that a partof how you manage.
(32:24):
as long as you are not,consistently writing checks to
prop up the business, it can beeasy to ignore the financial
side of things, particularly ifyou are a creative you're doing
yourself a disservice if you'renot educating yourself about the
finances of the business,catching something now can mean
saving lots of money in the longrun.
(32:46):
engaging with the parts of thebusiness that you know are
important but aren't as funearly on is really important.
Charlotte Ellis Maldari (32:54):
I have a lot of thoughts about this.
One of them was, I interviewedsomebody recently for the
podcast who works, he used to beagency side and he's a
strategist who now worksdirectly with clients.
He said I don't think that manybusiness leaders, CEOs realize
they need to be spending about70 to 75 percent of their time
(33:14):
selling.
certainly not the CEOs ormanaging directors of most
design agencies They usuallystart a business because they
want to do more of thecreativity, not more of the
business stuff.
They've had very little exposureto that.
They just don't want to becreatively censored anymore.
So they start a business andthen they're wearing about 30
other hats and they've got evenless time for creativity.
(33:36):
I do some guest lecturing atuniversities because so many
people are leaving with a degreeand saying, I just want to sit
at my own practice.
I don't want to work for anybodyelse.
I'm aware that they're leavingwith zero business skills, like
zero understanding of What ittakes to attract and win clients
for a creative agency.
they're going into the worldwith none of this experience.
So we do an intensive sessionwhere we give them the advice
(33:59):
around that.
Part of that is go get at leastfive years in another agency
before you decide to do this.
But.
my experience is that it's notjust about knowing the stuff.
It's also about, coming back toidentity again.
I think so this, for me, this isfascinating.
So much of this stuff is tied upwith with the ego and the mental
and emotional side of it.
(34:19):
if you identify as a creative,you naturally, I've seen people
avoid the skills that are morebusiness focused.
they're not thinking about, theydon't have their eyes on the
prize I hear what you're talkingabout with the over catering to
your workforce and ending upwith further complications,
(34:40):
under the guise of creating agreat culture.
I think that has been a bigchallenge over the last four
years, at least with hosting inthe UK.
partially because of the greatresignation and partially
because, you spoke about bricksand mortar versus digital.
many employees now have theoption of working anywhere
because they've got these remotefirst options.
and then there's a generationalthing, which I can't really get
into because I don't manageanybody of the younger
generations, but I hear friendsspeak to.
(35:03):
There's a lot of kind of thingshave all come together, which
make, I think, the industryreally right for over catering
to staff and losing sight of thebigger mission and goal of the
business and what your missionand goal are as an agency leader
in terms of what you want yourexit to look like.
I find that fascinating.
And I think there's it'sprobably Workshop afternoon on
how to define like how far youare away from your goal and
(35:27):
mission as a business and whatyou need to do to get back on
track.
from a culture perspective.
So you talked about consistencyand you talked about, leaning
into the skills that areimportant.
So that you you appreciate andcome naturally to you as a
business.
An agency leader, do you haveany other recommendations about
(35:48):
being consistent with youragency's marketing efforts,
particularly for busy agencyleaders, what I hear a lot is we
were so busy, we stopped doingthat and now we're paying the
price for it.
Jonathan Baker (36:00):
Yeah, I think, the first is practice what you
preach.
we're telling them to dosomething consistently, but we
have to be doing it ourselvesconsistently.
And then we can speak to howthis has helped us through, some
of the rougher patches we've hador over time how it builds on
each other.
When we do our total businessreset program, we also do.
(36:23):
anonymous interviews of thestaff.
sometimes we can use staffquotes instead of us saying it
to show that consistencymatters, Everyone on your team
is asking you to spend more timeon business development so that
we can start getting the righttype of clients or projects And
that can only happen if you'redoing it consistently.
(36:43):
And yeah we show don't tell.
And then we also.
Don't tell with their own staff.
Charlotte Ellis Maldari (36:52):
Yeah, interesting.
a big thing for us is clientlistening, listening to not just
clients, but prospects andinterviewing them independently
to understand what they valueabout the business what
challenges they're facing, whatthey're hoping to address, what
their hopes are, dreams are, andfears and challenges, et cetera,
(37:13):
and then.
I think a lot of people do speakinto that in terms of marketing,
which makes you come across assome kind of psychic because
you're listening to them andthen you're repeating things
back to them.
But but also has the benefit ofgetting some incredible quotes
about the business or a podcast.
Objective understanding becauseit's normally an intermediary
having these conversations withclients to understand what is
possibly not working that can becourse corrected.
(37:35):
I personally, I don't know howyou find this as a business
leader, but I find it reallyhard getting feedback.
But I think it's integral togrowth and
Jonathan Baker (37:44):
It's something you certainly have to get used
to.
I think most folks who startbusinesses have confidence or
else you wouldn't start thebusiness.
it's hard setting that asideintentionally and trying to take
feedback to make yourselfbetter.
But it's the only way to grow.
Charlotte Ellis Mal (38:01):
Absolutely.
Okay.
Amazing.
I've so enjoyed our chat today,Jonathan.
Thank you.
I have about 30 sub questionsbut perhaps for another
conversation and really want tothank you for being here.
is there any way you want todirect people to who are
listening to this, who want tofind out more about punctuation?
Jonathan Baker (38:18):
You can go to our website, punctuation.
com.
We've got a ton of free contentthere.
You can sign up for our weeklynewsletter.
You can contact us directly.
Bye.
Charlotte Ellis Maldar (38:26):
Amazing.
I love that you have the dot comfor that.
I'm currently wrangling over thedot com for my own business.
Jonathan Baker (38:31):
I get it.
Charlotte Ellis Maldari (38:33):
Great to speak.
Thank you.
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