Overview
In consulting, when your clients grow, so does your company. In this presentation, James Thomson goes over ways to enable your clients and give them the tools to grow. He goes over ideal client parameters that will help companies choose the best clients to bring in.
Speaker
James Thomson is a partner at Buy Box Experts, a performance marketing agency supporting brands selling on Amazon. Earlier, he served as the business head of Amazon Services — the division of Amazon responsible for recruiting tens of thousands of sellers annually to the Amazon marketplace. He also served as the first account manager for the Fulfillment by Amazon (FBA) program.
Quotes
“We’ve become much more explicit with ourselves around, what do we do, what do we not do? What do we serve and all of that by way of thinking about specific things that we’re going to bring into the fold?”
“When clients come to us to say, Well, can you also do this, this and this, if it’s not within our resources, we say no, we also have a lot of other companies we are able to refer out if they decide they want to do something that’s outside of our capabilities”
Key Points
- Choosing the right clients with high growth potential will help your company perform
- Ask questions about the opportunity cost involved with taking a client on
- Helping clients grow should be priority number one
Transcript
Good morning. I’m James Thompson from BuyBox experts. I’m going to be spending a few minutes today talking about the implications of upgrading the parameters that define your ideal client. Specifically, I’m going to talk about the journey that we as an agency have taken over time to not only identify who the best clients are that we want to go after, but to continue to to mold the way that our organization is able to support ideal clients. It has definitely been a journey for us and I’m happy to be able to share with you some of the details.
Alright, very quickly. I’m James Thompson, used to work at Amazon for a number of years on the marketplace side. I have written some books and founded a conference, very active in the media and very happy to have the opportunity to chat with you today.
Quickly by box experts is an Amazon agency. We have about 250 employees. We work with brands of many different sizes, helping them to sell their products on Amazon, whether that’s as a seller themselves, or wholesaling products to Amazon. We have a workforce all over the world and we support companies all over the world as well.
So let’s get started. Many years ago, founded by most experts, 2013, my business partner, Johansen started the company, working with him shortly thereafter, and quite frankly, we said we want to be an agency and we want to help companies so didn’t fully understand exactly what we wanted to do. But we knew that we were good at doing certain types of things.
So we said wonder if we can go out there and find companies that are willing to pay us the kinds of things we’re going to doing Amazon over the next couple of years.As we continue to grow our business said we need more product leads. So we need to find more companies that will be interested in our services. So we started a conference. So that’s a great way to put ourselves on the stage find additional brands that might be interested in talking with us starting to get a little bit more targeted around who wanted to work with. We were still at a place where quite frankly, if someone came along and said I’m willing to pay you a certain amount of money for doing things that you already know how to do.
We were typically quite happy to take so we weren’t very picky early on around who we did business with. And you can see where this is likely went go.As you open the door to everyone in anyone who’s willing to pay to do work. If you’re not good at putting boundaries around what kind of work you’re going to do. You don’t put boundaries around the clients companies you’re going to work with, then you’d have to make some more expressions, which we started doing subsequent years.
In 2018, we started buying additional firms add capabilities that our firm didn’t have realized that clients were asking us to do a number of things that we simply positioned to do with the skills we have on the team. So by buying additional firms that started to fill some of those gaps allowed us to be more service agency. That’s all very nice and well, but but again, you have to start to put boundaries around who you choose to serve and how sophisticated you get around continuing to filter through re evaluating your existing clients to make sure that they continue to be effective and good matches for as close as we worked with
as we know now five years into the process as we continue to grow the number of clients. At this point we had many dozen clients. We started to realize that accounts receivable was it was a big issue. And certainly, as much as we wanted to be able to support our clients with all staff locally, there was actually some very good, very good talent for us overseas, often salaries lower paying stays, that allowed us to become competitive provider clients with more services and prices that we thought were suitable.
Now it was only about four or five years into the agency that we actually started to put KPIs in place and actually measure ourselves against those key performance indicators.We’re talking specifically looking at the growth of individual clients started asking questions around how long was it taking us to do certain activities for clients? So that first five years was really focused on how do we get to the point that we’ve gotten a lot of clients and a lot of money coming in. We can afford decent staff work particularly sophisticated in looking at those parameters that we’re going to help us understand what an ideal client is, quite frankly, ideal clients, even through 2018 was a client who was willing to pay us and hopefully pay us on time.
But unfortunate, that model doesn’t work very well in time. And we’ve become extremely sophisticated in many ways. It’s really 2018 that the story begins for us as a company, where we started to get very sophisticated around saying, what exactly does an ideal client look like? How do we measure that client? How do we make better decisions with the business development process? What do we do around potentially dropping clients over time? In fact, clients are not continuing to be ideal.
Those types of questions came to the surface in a big way in 2018. And I’m glad they did because by the time we got to 2020 and COVID hit and all of a sudden oh my goodness. World has Shake it up, had not only a number of clients who very quickly found themselves in a very bad situation because their products weren’t particularly relevant in the beginning of COVID. But at the we had a number of clients whose products unexpectedly saw huge growth in demand and hence we’ve seen companies growing much faster than expected. All of this comes to a head around looking at, oh gosh, we need to identify what does an ideal client look like? How do we think about an ideal client? And we started to ask a lot of questions around not just how big a client is, but more importantly, how much bigger could a client because we choose to work with them, and we do all the whiz bang, amazing stuff that we know how to do. Can we take this particular prospect and turn them into something much bigger?
And by way of experimenting with different types of incentives that we that we that we had with our clients, different types of compensation packages are able to better align. If our clients grow, they grow. And hence, we need to do a better job of finding clients that we believe are going to grow under under our tutelage, working with us doing the things that we’re particularly good at doing. Now in 2022. We have very much focused on how do we create a growth mindset within our organization so that all employees are thinking about ways in which we can grow each individual client’s business. So when we take on a client, what are the things we need to do early on to put the right infrastructure in place to help them continue to grow? What are we going to need to do first three months, six months, 12 months, building strategic plans, working with our clients to figure out exactly what inputs need to be put in place for us to be able to drive sales and put higher revenue.
So let’s talk about specific changes we’ve made. First foremost, we’ve actually reduced the number of tears clients we work with. We wanted to satisfy everybody in our early days for anyone companies of all sizes quickly realized that not all clients are equally suitable for us and have to be much more specific about which clients don’t want to be a position where we’re very explicit in other clients. We can split ourselves around what types of services do we offer? As a consultant, it’s very easy to say, oh, yeah, sure. Of course, we can do that before you turns out that all creates various variances typically a bad thing, the business model as you grow bigger and bigger. So we’ve become much more explicit with ourselves around, what do we do, what do we not do? What do we serve and all of that by way of thinking about specific things that we’re going to bring into the fold?
Next, we’ve had to become much clearer about why do we charge different amounts for different tiers of clients in the past? Do they have what the client is able to afford more, so it’s charging more, but now my fiance can actually work with you and apply these services. These services cost as much versus those services cost of different all of this around being much more explicit with our clients and much more consistent about the messaging that we provide to prospects. This has made us a much better organization from a business development perspective, by being able to bring companies in set expectations early on around what we’re going to do, how we’re going to charge them, but also that we’re going to be working aggressively to grow their businesses rather than just babysit their businesses that that has helped us in a big way to better align around ideal clients.
Next, we have decided that we can work with all the clients and what degree clear about what smaller points mean. A small point for us could be a multi million dollar brand, but one that has no growth potential. And so if there’s no growth potential, and there’s no opportunity for us to continue to grow the business, we’re not interested in working with that company. And that that’s really situations where we have companies that came on board and they were big brand names were excited to work with them. They realized that they weren’t interested investing in growth long term. So the opportunity for us to be able to help them grow, which helps us make more money. There wasn’t that good alignment. So we’ve actually dropped a number of clients, including clients that we might not necessarily think of as a small client. But for us, they’re small because they’re small growth potential of the Four to five to talk about together. This is part of the luxury of getting to be bigger as an organization is being able to say no more often. Early on we couldn’t afford to say no we had to say to clients and prospects of course we can do consults, we can do all that kind of stuff. But all that opportunity to take on more things that work were to what we did create a situations where the various created problems for us have KPIs in place we couldn’t necessarily perform at the level on all these additional services. And so that created problems for us that quite frankly, prevented us from able scale as well as we wanted to.
So when clients come to us to say, Well, can you also do this, this and this, if it’s not within our resources, we say no, we also have a lot of other companies we are able to refer out if they decide they want to do something that’s outside of our likewise when companies come to us as prospects and say, we need you to do a bunch of things over and above just to help exporters on the Amazon channel. Again, we’re able to rely on our network of partners to say, we don’t do that. We work with other companies that do those types of services. And we’re happy to create some sort of a joint relationship where we do these things for you and some of those other things for you. But again, we’re not going to take on work that we know we’re not best positioned to be able to do or take on work that we know is not going to lead to much upside opportunity for us, for our clients to be able to grow.
Next, we are asking ourselves much more easily thrown opportunity costs. If we take on this work, what are we giving up in terms of other work to be doing for somebody else? So if we have a client that says I need to do a whole bunch of work, that may take a lot of time, it may not necessarily create a lot of upside, if we want to take that on when there’s opportunity for us to work with a couple of other plants that have much larger growth potential, where we can do the same work but create much more growth for them much more upside for us. We’ve got to think about those opportunity costs and become much more explicit around. It’s only so much time for us to be able to do more of them to do let’s make best use of that time.
To change the way we compensate our employees. Our employees are compensated to think about growth, and if they create growth in our clients, businesses, then we pay our employees more. So it’s not just hey, work harder and let’s grow the clients. It’s that’s all work harder focus on the right levers that drive growth when the growth is created. We all benefit from that upside opportunity.
One of the most curious aspects here, and something that we’ve only started doing last 18 months is looking at every single client saying how much revenue to be expected to generate out of this client this year, unless you think we can generate next year. If the clients not prepared to make certain types of investments, whether that’s additional advertising or additional catalog selection. Those Those are going to be factors that can play into us be able to say you don’t think this company’s going to grow as much as we wanted to swing back to the concept of opportunity. If we have a number of clients on the books, who have decided that they’re happy with where they are today, there’s no more growth opportunity because there’s no more opportunity for them to invest further. Those are the kinds of things that you probably don’t want have the books long term. And so we’re now being much more explicit with existing clients who said we’re done rolling. We’re having a conversation saying we don’t think it makes sense for us to renew a contract with you. The contract comes due. And they will part ways at that point, freeing up capacity that allows us to then go and work clients that are potentially much more different opportunities.
And that’s really areas where we continue to work on making improvements to better define parameters that will help us figure out and get clients still working on getting our account. reps have become much more comfortable having those discussions around clients. Often when you get into renewal discussion, you’re worried well, maybe the client tried to renegotiate the fees or the last something from us that we don’t want. We would rather have a variable conversation around that and say, our focus is to grow your business. If you’re gonna grow your business, then you don’t want to continue to grow your business.
We’re happy to refer you to other agencies. We’re here to grow our growth machine. And that’s what we want to do. Using our time somewhere in place, and then continue to work on is figuring out all of the costs and time goes into supporting each client so that we can actually measure some of the cost implications of, weve been doing this over the years but it’s actually very hard to do this when you have many many teams within an organization touching each client’s genomic progress,hey’re being able to look at the bottom line impact of each service to be ultimately applied to each of our clients.
Now if I could just show one interesting graph here the beat of the clinic recently, we look month by month at different tiers of clients that we have and how much revenue each client is bringing, but more importantly, our clients growing with time so we talk about all that growth, are we actually putting our money where our mouth is and helping clients to grow their business. And if we continue to bring on clients that aren’t necessarily growing, this kind of a measurement chart will help us to see the trends around either the growth or the lack of growth for different sizes, different tiers points. So this this kind of monitoring has been very effective for us as we look at buying tear, are we experiencing lunch? And if we’re not, you can ask very specific questions around different these types of clients tech services to be offered to offer additional services to get out of supporting certain tiers or clients. This kind of monitoring system has been very beneficial for us. I wish we had made these types of these types of data explicit earlier, to help us make better sense of where we’re spending our time.
So in summary, making these types changes and focusing specifically on defining ideal plan and making sure that we’re planning our business and our time and our investments around those ideal clients. For major air effects restaurant one, our full team is here to help grow businesses. We’ve gotten away from the potential of babysitting companies and saying we’re here and we’ll just manage stuff. I want to just manage stuff. I want to help my clients and helping them grow things we have to be very explicit about how we spend our time means that everybody in our organization has to be focused on finding ways to further growth. But this is all part of a culture change that has been extremely beneficial to our organization.
Secondly, we’re getting much more closer with our clients. The growth that we create, in part is driven by actions taken by the client. So by identifying what are all the inputs we need for this growth, which puts us on agency support, which inputs to any from our clients to support. That’s all part of our ongoing regular conversations with our clients. For example, a key input might be they need more selection, or inventory. We need promotional dollars from clients. If the client says yeah, I’ll give you all those. But then, when the time comes, they don’t provide those inputs. We can’t do match. So we need to be explicit about what the inputs are that both sides have to provide to drive this joint growth place.
We continue to look for ways that we can grow our clients year after year. So if a client is an x and want to go to 2x. This year, they don’t go to 3x Next year, we have to keep looking for additional inputs that we can put in place to continue to drive business. None of this magically happens by being explicit about what’s going to drive growth and by making sure that we’ve got the joint agreement between us and our clients. This has helped us certainly to to become better with our clients.
And fourthly, now because we’re focusing on inputs, making those inputs explicit, our ability to have very clear conversations with our clients around who’s responsible for what do we need to do what our clients need to do, if we’re behind on certain things for clients will hold us accountable. Likewise, if our clients are behind on certain things, we can hold them accountable and say, We’re not gonna really hit the growth goal together because we’re not putting the right kind of inputs in place.
So all in all, an exciting opportunity for us to continue to refine our business and to become more explicit about who we are, who we serve, how we serve them, and what do we ultimately do to charge them for the work that we do? Through this, we continuously update what an ideal client looks like. But also we’re in a position that as an organization, we’re prepared with the right kinds of staff and the right kinds of motivations to make sure that we are in a position to help drive our clients businesses.
Thank you very much for your attention. today. And enjoy the rest of the conference.