DeepSpecialization_EP 98_Jon Morris_Video_Edited_V2
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[00:00:00] Corey Quinn: Welcome to the Deep Specialization Podcast, the show where we blend focus, strategy, and client intimacy in order to scale and simplify our businesses and our lives. I'm your host, Cory Quinn. Let's jump into the show. Welcome back to the Deep Specialization Podcast. Today I am thrilled to have a repeat visitor join us, who is a true expert in growing digital agencies.
[00:00:23] Corey Quinn: His name is Jon Morris and he's the founder and CEO of Fiscal Advocate, which is a company providing decision making software and services for professional services firms. And he focuses on critical metrics such as cash, profit, and revenue, what they call their CPR score. I'd love to have you share more about that, Jon, and then also.
[00:00:48] Corey Quinn: Before we hit record, what we talked about is all you do, all, you know, your primary focus in the business and the work you do with your clients, uh, and the firm's clients is help them to improve decision making. So we're gonna go deep on innovation today. I'm excited about that. Little bit more before we jump in, Jon, about your background, why you're super relevant for this podcast and this audience.
[00:01:11] Corey Quinn: You are the CEO and Founder behind Rise Interactive, which you started in 2004. You grew from a one man shop to a leading independent marketing agency. I. That's you later, uh, sold and you can actually, listeners can listen to your entire journey on our previous episode where we uncovered your entire journey, the highs, the lows, and, and all the lessons learned.
[00:01:34] Corey Quinn: So I encourage listeners to go check that out on the Deep Specialization Podcast. But as I mentioned today, we're having a discussion around the role of innovation and agency growth. Okay. That's enough introduction. Hey Jon. Good to see you buddy. It's great to be back, Cory. Thanks for
[00:01:52] Jon Morris: having me here.
[00:01:53] Corey Quinn: Yeah, absolutely bro. So let's talk about innovation from a, uh, from a high level, we'll kind of jump right in. I think, you know, in 2025, a lot of folks in the agency professional services space, but definitely in the agency space are saying no. It's, it's a tough year. It's, it's been a tough year. It's been a tough environment for a lot of agencies.
[00:02:13] Corey Quinn: A lot of sort of budgets have been squeezed. Drawing from, you know, your experience starting off rise way back when, 2004, as a solo business owner and, you know, how should you, should an agency today prioritize innovation spending with keeping in mind not breaking the bank? Like how, how do you do, how do you do that?
[00:02:37] Corey Quinn: How do you recommend folks do that?
[00:02:39] Jon Morris: So the first thing I just wanna point out, there are 120,000 agencies just in the United States. This is a crazy crowded space. Yeah. And you know, at Rise I used to think we are really special. And I guarantee you every CEO of every agency thinks they're special. We're not special like we are very similar to our competition and there are hundreds or thousands of competitors.
[00:03:07] Jon Morris: Doing what you do just in your area, your niche, your specialization, and so unless you want to compete on price, which just means that you're gonna have to keep on lowering, lowering your price, you have to start creating a unique value proposition, something that allows you to charge more. Now in this economy right now that's getting tougher, there's AI that's disrupting people that might bring more insourcing.
[00:03:34] Jon Morris: I believe there are two things that are really important. I'll go into all these different elements, but the first one is you need an ideal client profile. So you need to figure out who are you going to serve and ideally that you are going to improve the experience and the results for that specific group.
[00:03:50] Jon Morris: And then how are you going to innovate? Both in terms of your service offering and your innovation specifically for that ideal client profile. Now, in terms of not breaking the bank, every single dollar that you spend, or sorry, that you receive, so basically no matter how much revenue you have, let's just say you have 10 million in revenue, every dollar should be allocated to a specific area.
[00:04:16] Jon Morris: You get 50% to service your customers. Well, you get 5%. Innovation. That's the minimum of what I want you to spend it is not breaking the bank, providing you live within the other buckets. If you're overspending one of those other buckets, then it's gonna be hard to spend money on innovation. So it, it's a holistic view of your finances, but you get 5% of your revenue dedicated towards innovation, and that has to be dedicated towards that ideal client profile and to Yep, improve the experience and the results.
[00:04:49] Corey Quinn: So where should that 5% come from? Should that come from opex? You look, look to be more lean. Should that come from profit? Like where should this 5% be, be, be allocated from, do you think? So
[00:04:58] Jon Morris: there's two different ways and, and this is something, 'cause I'm not a CPA, so you need to talk to your tax account.
[00:05:05] Jon Morris: It's about this. Yeah. Ideally, you can capitalize this investment in innovation, which means it's a balance sheet item as opposed to an income statement item. So you can still have your 20% ebitda. But it will reduce your cash. And so ideally you're having a 20% ebitda. And then when you think about, there's something called a call on earnings.
[00:05:28] Jon Morris: So like what do you do with your profit? And I want you to take 5% of that revenue, so a good portion or 25% of your profits, and dedicate that towards reinvesting back into the business to innovate, to make your services better.
[00:05:45] Corey Quinn: Okay. Beautiful. I love that. And why, why do you suggest focusing on an ICP first before you make this investment in an innovation?
[00:05:54] Corey Quinn: Why is that important? Why not just innovate? That's an awesome question.
[00:05:58] Jon Morris: So I'm gonna, I'm gonna speak about some of my own mistakes. Yeah. So at Rise. We focused on, you know, four main verticals, retail, education, finance, and healthcare was predominantly who we focused on, but we took clients from everywhere.
[00:06:14] Jon Morris: We had B2B clients, B2C clients, lead gen clients, you name it, across the board. We serviced them. Now we built an eight figures platform, so we invested very heavily in innovation. I had 25 people just dedicated to my innovation team when I was there. It grew to over 50 people after I left. So just to give you an idea of the size and scale.
[00:06:36] Corey Quinn: Yeah.
[00:06:36] Jon Morris: And part of our analytics platform is we had to connect to a bunch of APIs. So about 20% of my clients were retail or e-commerce. They cared very deeply about marketplaces, so like Amazon, Walmart, target, Instacart, et cetera. Took us about six months of coding and development work to connect with all those APIs.
[00:07:02] Jon Morris: There's only one problem that was 20% of my customers. That means that over a six month period of 25 dedicated people, 80% of my customers saw no value in that innovation. Then we did the same thing, but we did it for all of our B2B connections, by the way, another 20% of our customers, sure. So another 80% saw no benefit to that innovation.
[00:07:26] Jon Morris: So when you are innovating, what you wanna think about is what percent of your customers and what percent of your perspective customers will benefit from that innovation. And so if you don't have an ideal client profile, you're going to, you're, you're gonna water down the impact of your innovation.
[00:07:45] Corey Quinn: So I'll give you an, an anecdote from my time at Scorpion because we also were very soft software driven.
[00:07:51] Corey Quinn: That was how we were able to scale up. And our target audience were local businesses like attorneys and plumbers and so on and so forth, which were I. Lower revenue per client, more volume of clients, but we had to be extremely efficient. So one of the things that we did to help assist us with that, with servicing those clients was we built a lot of internal software that would help us to scale and to be able to sell.
[00:08:15] Corey Quinn: Ultimately, we, we sold 600 deals per quarter. That's how many new clients. And so you can't manage that volume of new clients and maintain quality and maintain retention and, and a great reputation, all that stuff. And so software was a big part of what we did. And one of the vertical markets that we were very interested in investing in and growing was the medical industry.
[00:08:39] Corey Quinn: This is on top of the legal industry, which we were billing software for the home services industry, which we were billing software for. And the franchise or multi lo, multi local industry, all of which we had investments in, in building software and, and, and analytics tools and dashboards and, and all this great stuff.
[00:08:58] Corey Quinn: The challenge that we face with medical is, to your point, the medical industry, when you service dentists, they have a tremendous amount of technology platforms that they expect you as an agency, as a specialist agency Yeah. To tie into. You also have hipaa, you have all of these requirements. That at the end of the day, while there was a lot of potential revenue for us to go acquire in medical, we decided not to invest in medical after actually going down the road.
[00:09:26] Corey Quinn: For a while, we learned this the hard way. We went to conferences, we hired sales teams, and we did a bunch of stuff and, and, and client services teams for medical. We ended up backing out of that because the amount of. Investment that would require us to be able to be successful in medical was a zero sum game for us.
[00:09:44] Corey Quinn: So if we were investing in medical, we were not investing those resources in building our software for our other kind of more established vertical. So that was our decision. 'cause we couldn't, can't do everything. Exactly. That's
[00:09:55] Jon Morris: so that's a perfect example of how to say no. You know? Yes, right. Yes. To make sure that your innovation is impactful.
[00:10:02] Corey Quinn: Awesome. You mentioned AI and I wanted to get your perspective on, you know, is does AI in your pose a real risk to agencies and you know, if so, how? Yes and
[00:10:16] Jon Morris: no. It is a massive opportunity and it is a massive threat. The reality is that the speed of which we are able to be able to do things is faster now than it ever was before.
[00:10:31] Jon Morris: And there are going to be companies that are going to invest in leveraging AI to make things substantially more efficient, to make it different. And there are companies that are gonna be slow to do so. There are also going to be more tools that come out that are gonna make it easier for people to do it internally as opposed to hiring an agency.
[00:10:52] Jon Morris: So what you really have to think about is based on what you do, you know. Where are you on the roadmap of leveraging AI into your ecosystem so that you can do things at a faster rate or a higher quality rate than you currently are doing? Sure. And so I don't think the agency is going to be, you know, like I think that there's always going to be a need for hiring an external partner to help you with your marketing.
[00:11:23] Jon Morris: Yeah. And I don't think that marketing is going to go away.
[00:11:30] Jon Morris: Volume of work that comes out of an agency might become higher. The process that you do, it might become easier for your customer. Like there's all sorts of cool things that you can do when you leverage AI to, you know, provide a better experience and better results for your customer. But if you don't take advantage of that, I think you're gonna get disrupted pretty quickly.
[00:11:53] Corey Quinn: Any suggestions around how agencies should be leaning into ai? Obviously we're talking about innovation today. AI is, is, you know, uh, as it relates to agencies. Many, many agencies have adopted at some level, you know, the generative AI part of, of, of ai, right? The, the part where they can create blog posts really quickly.
[00:12:12] Corey Quinn: They can create, you know, personalized content. What are some different ways that agencies should be kind of pushing the envelope outside of this kind of bread and butter approach? So I'm gonna speak
[00:12:23] Jon Morris: at a little bit of a higher level to get to a more detailed level.
[00:12:26] Corey Quinn: Great.
[00:12:26] Jon Morris: Okay. So we started with you need an ideal client profile.
[00:12:30] Corey Quinn: Yeah.
[00:12:30] Jon Morris: The next thing is, in my opinion, there is only two things you want to innovate for as it relates to that ideal client profile, the experience that your clients have and the results that you deliver for them. The third one could be the profitability that you manage the account, but let's just focus on the experience and the results.
[00:12:51] Jon Morris: Okay? So I believe that if you are delivering amazing results for your client, but you're a pain in the butt to work with, you're gonna eventually get fired. And if the experience is absolutely incredible, but the results are lack, you're probably gonna get fired. So I think you need to invest in, come up with that.
[00:13:13] Jon Morris: The next thing is we've talked about is you need to dedicate budget to actually innovating. So like these are like foundational pieces that you need to start with before we even talk about AI or what you do with ai. The next thing is you need to build the right team. Okay? So actually even before that, there are two different ways that you can innovate.
[00:13:38] Jon Morris: The first way is product development. You just talked about at Scorpion, you built a lot of software, fiscal advocate, build software, rise interactive build software, and, and there are team members that are unique to building software. So you need engineers, you need UX experts, and you need, uh, product owners.
[00:13:57] Jon Morris: And those are kind of like the core three that you build around. The other way is something called service design. Just so you know, like you can get a degree in service design, like there are colleges that offer degrees in this and, and I like to reverse the wording. It means designing your service to improve the experience and the results for your ideal client profile.
[00:14:17] Jon Morris: Like that's my vision of service design. And there are four elements to service design. The first element is building out standard operating procedures. The second one is that for every standard operating procedure, there are going to be templates and there are gonna be standard deliverables. And I'll just give you an example.
[00:14:39] Jon Morris: If you build out a standard operating procedure for onboarding new clients, every new client is going to receive a welcome email. I'd be shocked if they don't receive a welcome email, but you can templatize that and be like, this is what our standard. You know, welcome email looks like, and we're gonna introduce the team.
[00:14:58] Jon Morris: We're gonna have a calendarly link so that you can, you know, schedule your first meeting, like, you know, what are the elements there are that go into that welcome email. And the next one is workflow automation and ai. So like, once you have like the standard operating procedure and you have the standard templates, this is where you can start determining.
[00:15:22] Jon Morris: What can we automate as opposed to having humans do it? And the last one, and I don't know if this is the most important one, but it's the most often forgotten one, is adherence to the standard operating procedure. So good. And I can't tell you how many times as we scaled from one to 250 employees, that someone would come to me and was like, I had the greatest idea for like the standard operating procedure.
[00:15:49] Jon Morris: And I was like, we're in our fourth time of trying to implement that. And through the growth that got lost, you know, that's on me as a failure to build a standard operating procedure that stood the test of time to existing and new employees. Right. And so when you think about your team. That's dedicated to putting your service design together.
[00:16:13] Jon Morris: You need people who build out your SOPs, people who build out your templates and your standard deliverables. People do workflow automation and ai, and people who do change management and ensuring that people are actually incorporating all of these different elements. So I didn't give you a single thing about what you should build in terms of AI Next.
[00:16:33] Jon Morris: But I'm gonna give you a story that, and this is how I know when you're doing a good job. Okay. When we were small at Rise, let's just say 10 to 20 employees, I would walk around and I would take my employees, stop them, and at random, ask them a ton of questions like, what's our mission? What's our vision?
[00:16:53] Jon Morris: What clients are you working on? What are you doing for your clients? You know, a whole series. I'm sure it was very stressful for them, but whenever I asked them what they were working on, they would say to me. You know, like, oh, I got this client, I'm doing SEO and paid search for them. I was like, oh, well, tell me what you're doing for SEO.
[00:17:09] Jon Morris: I was like, oh, we're restructuring their title tags. I just finished their meta tags. You know, we took their code from this to that. You know, like they, they tell me all these details, like, and, and paid search, like, oh, and we optimized their account. And what I learned about optimizing their account was that was code for, they did nothing, you know, like busy work.
[00:17:29] Jon Morris: And I find the same thing when you ask people what they're doing for AI or what they're doing for innovation, where it's like, oh, we put a committee together, we're gonna rewrite all of our SOPs for the year. You know, that to me is code for You're doing nothing. Yeah. When you can start saying. We have a prioritization roadmap.
[00:17:50] Jon Morris: We're focusing right now on automating the weekly reports that we deliver through our clients through an AI interface, and we build a database and we're using rag, which automatically improves the process of like your LLM, like if you could speak in specifics. I'm like, okay, they got something. Like this is real.
[00:18:11] Jon Morris: And so to me, I don't care what it is, but just start developing a list of all the things you can do as you get this team together. The first thing might be, I'm putting the team together, but you know, you want two week sprints. You went at want an Agile framework and you wanna have releases of things that you're improving, whether it's on the service or the product side.
[00:18:34] Corey Quinn: So a couple, couple follow up questions here. Yeah. Uh, just kind of feedback there. There's, there's two primary areas where there's, it's called leverage within an agency, which is Yeah. Experience and results. Yeah. If you're able to improve the experience exponentially, improve the results over time, then that's gonna add more value.
[00:18:51] Corey Quinn: It's gonna improve retention. Yeah, of course. Improve your positioning and, and, uh, differentiation and all those good things. Couple ways to approach improving experience and results is through service design, which is designing the service. The four steps.
[00:19:04] Jon Morris: Yep.
[00:19:05] Corey Quinn: Standard SOPs, templates and deliverables, workflow automation and ai, and then adherence.
[00:19:11] Corey Quinn: Should this live? Across the organization, like should the delivery team be focused, uh, you know, have, have ownership in this service design and should sales own this? Like, who, who in the organization owns it? Is it, is it cross cross departments or is there a separate department that kind of owns this and then, you know, works individually with the departments?
[00:19:34] Jon Morris: I believe that this needs to be a separate owner and that there needs to be a head of innovation or a head of r and d that reports to the CEO. And then just like in product development where you'll have stakeholders like you might have a stakeholder on the client delivery team around the sales team that provides input to the product owner.
[00:19:56] Jon Morris: You need someone that is providing input across this organization so that you know what service to work on next to improve, you know, what, uh, what you're building, you know, et cetera. I think this, a lot of your audience will probably relate to this because a lot of them are marketers. And what they often try to do is to market themselves, is they assign their client service team themselves as a client, and they find over and over and over again that they just are the last priority relative to their client work.
[00:20:33] Jon Morris: Yep. So if you're not gonna be able to dedicate a team. And by the way, you have to build the de the right team. Another quick story, I took our best digital marketer and put them in charge of our technology the first time, and we spent over a million dollars and we ended up flushing every one and zero down the toilet.
[00:20:56] Jon Morris: Because I didn't hire the right people. And so it wasn't until I did a, like a full RFP, so to speak, and had four finalists who really knew how to build technology, that I learned how to build technology. And I hired Brent Laffer, who became our CTO. And so you gotta build the right team in order to make sure that this does its job and you do app appro appropriately.
[00:21:19] Corey Quinn: So if we're talking about 5%. To invest in this innovation. You're probably talking about larger agencies who can really hire the right team to not only have the right leader, but the right folks on the team to be able to know, to have a, a lasting impact. What about for those agencies that maybe that 5% doesn't represent enough of an investment level to, to bring in a separate team?
[00:21:40] Corey Quinn: How do you, how should they approach this?
[00:21:42] Jon Morris: You know, look, if you are, let's just say you're a million dollar company, so that gives you a $50,000 budget. Yeah. You know. A lot of times you have to wear multiple hats as a small organization, so That's right. You know, you might be the CEO and the head of innovation, and you might hire an engineer in, you know, Latin America or a market that's more affordable than the United States.
[00:22:07] Jon Morris: Yeah. And so you still have to invest the 5%. You just have to. Thrifty and you know, creative of how you can get the most impact. But what I want you to be think about is if you're a million dollar company. And you're spending $50,000 and I'll, and I'll talk about how you can analyze the ROI that $50,000 or whatever you spend in a second.
[00:22:33] Jon Morris: But you know, you should have a competitive advantage over time relative to the other million dollar company that didn't spend that $50,000, right? So as long as you're focused on the right thing, going back to experiencing results in your ideal client profile, you should be putting yourselves in a good position down the road.
[00:22:50] Corey Quinn: Yep. I recently interviewed Kbu, who is the Chief operating officer over at E two M. Okay. And we had an interesting conversation about AI and she, she shared a couple of things that they're doing. So they, they're a white label solution for agencies. Yep. And they have hundreds of agencies and they've got.
[00:23:10] Corey Quinn: A lot of workers, hundreds of workers, and yeah, they've really brought AI into the forefront of the culture of the business. And so a couple things that she shared, just kind of additive to what you're sharing is this concept around like, when, when do you make an investment in ai? Well, let's say for example, the example she, she shared was if you, if your team takes 15 hours a week to do lead gen.
[00:23:34] Corey Quinn: Let's just call it right? For, for yourself or for whomever. And you're, you're investing those 15 hours every week. That's a, that's a cost, but it's for a functional, uh, benefit of your business. And you looked at potentially developing an AI or, or an innovative solution that would ultimately take those 15 hours down two to three hours, but it would cost you 50 hours of work.
[00:23:59] Corey Quinn: Yeah. Do you want, do you wanna make that investment? In other words. It's, it's an additional 50 hours of work, but at the end of which the expectation is you go from 15 hours a week to down to two, to three. In that situation, of course you make that investment. Yeah. And so you have to approach, you have to approach it on the basis of what is the expected outcome, what is the measurement that, what's the success, measurement of success, and then what's gonna cost us, relative to our current expense to be able to experience that, that, uh, success.
[00:24:32] Corey Quinn: Yeah.
[00:24:33] Jon Morris: I'll bring that into a financial world of beautiful. So I generally deal with two companies. Companies that are financially distressed, and then companies that have hit a plateau and wanna grow faster, but they don't know how. And the second group to grow faster is a math problem. There are only four numbers or four metrics to improve that will allow you to grow faster.
[00:25:02] Jon Morris: You either win more clients, you increase the average order value of those clients, you reduce your churn, or you upsell more. So when I talk about improving the experience or the results, one of those four metrics should change, if not all of them, by this innovation that you're investing in. Yep. Okay. So that's one thing to focus on.
[00:25:25] Jon Morris: The second thing to focus on, and I'm focusing on the client work, but I'll get to where you go with the sales and marketing side at some point also, is I'm a very big believer that one of the most important, if not the most important metric to understand is your gross margin, how profitable you serve your customers.
[00:25:42] Jon Morris: And so another avenue would be. How much will this improve your gross margin? Let me use your example, but just say it's a report that you provide to your clients on a weekly basis, and it takes you a hundred hours a week for all your clients and it's gonna take you 10 hours. Now by doing this, right, you wanna look at your payback time, but you know, when we would, this is literally how I manage the innovation at.
[00:26:15] Jon Morris: So I explained to you about the flaw of the innovation of like 80% didn't get served right. What I didn't explain was what our focus was. Our focus was on gross margin improvement. And so I would look at how many hours it took to build out the reports for our clients, for all of our marketplace clients, and they'd be like, okay, that's a thousand hours a month.
[00:26:42] Jon Morris: By me building this, I now can go from a thousand to zero, and then I would go to the next group and I'd be like, I'm going from 700 to zero. And so I was taking chunks of time. Yeah. And reducing the amount of time I needed to spend so I could improve my gross margin. So I was, I was really going for a gross margin advantage was my product roadmap and the, and the way I designed it.
[00:27:04] Jon Morris: Yep. That's very similar to your sales strategy. But then what I would ask, uh, I would ask a different question. Not, does it take 50 hours and goes down to, you know, or 50 hours to develop, and I'm gonna go from 15 to two hours. I would ask, well, how many more clients am I gonna get from this? You know, like, by turning this on, so am I going to get, you know, can I now 10 x my outreach?
[00:27:31] Jon Morris: And so am I gonna get more meetings out of this? And so the idea is that when you spend money on innovation. It's gotta have an impact somewhere. Yes. And you want it to see in your income statement, is it improving your profitability? Is it improving your revenue? Is it reducing your churn? You know, et cetera.
[00:27:50] Corey Quinn: So, so that, that actually reminds me of something I was remembering before our call about innovation. This idea of innovation. Scorpion had a very innovative culture. It was baked into everything we did as led by the, the founder. I managed a 30 person marketing team and our, yeah, primary focus was generating new revenue.
[00:28:10] Corey Quinn: It was closing new deals. It wasn't on the margin, it wasn't on. Retention. Our, our pure focus was on top line getting new, new logos, let's call it, into the business. And as a 30 person company, working at a environment where we wanted to grow, grow very quickly, we did a lot of things. Yeah, we did webinars, conferences, content, direct response, outbound, email marketing, and while we were very busy, things would come back to me.
[00:28:43] Corey Quinn: Like somebody on the team would say, Hey, we sent this email blast out to 10,000 attorneys and it had five typos in it. I was like, oh. Right. Or we printed up a brand new booth for this big conference and we misspelled Scorpion or, or, you know, on and on, right? Yeah. So the, the, the, the, the place where we had to get to, and me as the leader of this group that was, you know, we were investing on 30 people.
[00:29:10] Corey Quinn: We had big marketing campaigns. We had a $6 million budget. The point is that there was a lot of money and a lot of moving parts. What we had to do, what I did to. Address the quality issues that we had to think about. What are the key principles for that? That everything that we do must apply to? Yeah, it came down to an acronym and, and it was, uh, QISR, which you can say is kisser, which is probably a, a, a PR or an HR violation is to say, but, but it is q the first thing, uh, the first thing that you do as, as a writer, as a social media marketing person.
[00:29:45] Corey Quinn: As any person on my team, the first thing is Q and that stands for quality.
[00:29:49] Jon Morris: Yeah.
[00:29:50] Corey Quinn: We don't think do things cheap. We have a premium brand. It must look good. It must. You must invest in the experience of whatever it is. Number two is inno innovation. It must be innovative. And what that meant to us was you can't just rinse and repeat what you did last time.
[00:30:06] Corey Quinn: You had to take what you did last time. Look at the impact and make changes. Make it different, make it better, make it 10% better, 5% better every single time you do. Let's say a repetitive task. S was speed. We moved quickly. You have to get a lot of work done in a short period of time. It's a culture we had.
[00:30:24] Corey Quinn: That's the, that's the, um, in order for us to hit our aggressive growth goals, you have to work quickly. The r at the end of it was results, which is anything you do an email that you send a, a gift that you send to a prospect. Everything must have some measurable result tied back to it. Or else you're just gonna be sending out emails and checking the box and moving on to the next thing.
[00:30:49] Corey Quinn: Every single thing we did had to apply to this kisser formula. And the, the reason why I bring this up, it was because, uh, it includes innovation, always trying to improve, but it also includes results. In other words, yeah, everything you do has to be tied to some measurable impact or else I'm not gonna approve it and you're not gonna do it,
[00:31:07] Jon Morris: first of all.
[00:31:08] Jon Morris: I love it. By the way, we had TCA, which was timely, complete, and accurate. But you know what, what I would say is look to build a culture of innovation. Yeah. I absolutely believe in the balance of quality and results. Yes. Uh, but what you also have to do is reward people for trying things and accept that some of those things might not produce results other than the result is not to do it again.
[00:31:35] Jon Morris: You know, so sure that's a result. Yeah, I'll, I'll give you an example. I have an idea right now that I think is worthy of testing, but I do not, I do have, I have zero data on this right now. So here's the general idea that I believe in investing in top of funnel marketing and advertising. That when someone looks to buy something, I don't care if they look to buy a pen, a soccer ball, a digital marketing agency, only three to five brands get recalled at a moment that someone is ready to make a decision to buy it.
[00:32:13] Jon Morris: And so how do you make it so that your company is recognized and recalled? So here are the steps that I believe the first one is that you need an ideal client profile. The second one is that you need to develop a list. You need to make sure that that is a really thorough, well thought out list, that there's no waste in that list that you're going to, you know, build.
[00:32:41] Jon Morris: The third is there are a whole series of ways to do advertising. On list audiences. So you can upload a LinkedIn to Facebook, to Instagram. You can do connected tv, you can do internet radio, you can do programmatic, where you only advertise on that list. And the idea is over the course of a year, or the course of two years, or maybe even three years, you swap out the creative every six to 12 weeks, you are doing top of funnel pure branding type initiatives.
[00:33:15] Jon Morris: With the idea that when someone is ready to buy, that you are top of mind in that decision set. Yeah. I have zero data to support this. Okay. This is just an idea that I have that I think is sound like it's the right ideal client profile. I understand that there's only three to five people that get called during a decision set, and I wanna make sure that my client, you know, that I'm thought of during that process.
[00:33:44] Jon Morris: So to me, like if someone else came up with that idea and they had a good argument, you know the R is, we believe that by building a brand it'll be helpful. But I'm very open to taking those chances, knowing that that might be a complete failure. It might be a horrible idea, but if we don't test that, you'll never find that next breakthrough.
[00:34:09] Jon Morris: Yeah. What if that idea is a home run? And all of a sudden my list goes from a thousand people to 10,000 people to a hundred thousand people. And you know, it's, it's very similar to the gifting idea with your cookies, you know, at Scorpion, which turned into a huge idea. Yeah. You know, but I guarantee when you set the first batch, you didn't know if it was gonna work.
[00:34:28] Corey Quinn: No, it was, it was, uh, it was purely a what? Let's go, let's see what happens. Type of, yeah. There was no science, no data behind it. It was a hunch. Yeah. Right. You know, in speaking about your IICP, and you mentioned this earlier. I, I wanna share something that is based on my experience, a benefit of starting with an ICP as it relates to innovation.
[00:34:50] Corey Quinn: Okay. A lot of the work that we did at Scorpion and now I work with clients, is around this idea of becoming a specialist in a vertical market to do things like become one of those three to five brands that get recalled when they're, rate when your ICP is ready to buy. Yeah. One of the areas of focus for us, this is a big strategic focus for us, was personal injury attorneys at Scorpion.
[00:35:14] Corey Quinn: Yeah. And these are the folks who specifically, they're looking for mass tort type of cases. These are the mesothelioma, you know? Yeah. A thousand dollars cost per click. These folks are very sought after by agencies. 'cause they have big budgets. They wanna spend a lot of money. They have, yeah. They are aggressive.
[00:35:32] Corey Quinn: Like all the things you know, a forward looking agency would really want. Well, through our specialization in attorneys and personal injury and specifically in mass tort, we understood them at a deep level. We were able to focus. We didn't have to spend our focus in multiple verticals or industries. We got to spend a lot of time with them.
[00:35:52] Corey Quinn: As a result of that, that generated a lot of familiarity and client intimacy with them. Yeah. What we did with that is we created a product that was specifically built for mass tort attorneys. We named it as the, and I forget what it is specifically, but it's like the, the mass tort case. System or something.
[00:36:13] Corey Quinn: Yeah. To that effect. And as a result of that specificity, this unique product that solved this unique pain point for this specific audience, it allowed us to break through all of the noise because finally they found someone who understood their situation, their pain point, and knew what they wanted.
[00:36:31] Jon Morris: Yep.
[00:36:31] Jon Morris: As a result
[00:36:32] Corey Quinn: of that, we were able to scale up that part of our business significantly. You could only do that type of innovation around products and, and how you position it through specialization.
[00:36:42] Jon Morris: I 100%, like we're completely aligned in that area,
[00:36:44] Corey Quinn: right?
[00:36:45] Jon Morris: Yeah.
[00:36:46] Corey Quinn: Right. So I, I guess the, the, the point for me that I wanna make is that innovation comes through specialization because you know what to innovate on and you know who you're innovating for at a deep level.
[00:36:59] Jon Morris: Absolutely like the, yeah, your ideas become better and they move from, like, we're gonna automate our weekly reporting to, we are gonna connect to this unique interface and yeah, you know, we're gonna give this insight that no one else can give. You know, it's, it's similar, like in my space, I can tell you exactly how much to spend if you are a marketing agency in every single area of your business.
[00:37:24] Jon Morris: But I know nothing about inventory. You know, like if a manufacturer came to me, I would be, I don't know how much to spend on capital equipment. You know, I, I have no knowledge within that area. So my ideas are all around like resource planning and profitability. Within this specific sector,
[00:37:42] Corey Quinn: how do you approach or think about driving more of a innovative culture at your agency?
[00:37:49] Corey Quinn: Like what, what should a leader do to drive. You know, get more people involved in the innovation and, and really want to drive that independently of the founder.
[00:37:59] Jon Morris: So there, there's a couple things. So first of all, I'm gonna talk about innovation with a lowercase eye versus innovation with an uppercase eye.
[00:38:06] Jon Morris: Yeah. Innovation with an uppercase eye is like self-autonomous driving cars. You know, it is, you know, something that, you know is completely innovative and, and groundbreaking. Yeah, most of you know marketing agency's innovation is a lowercase I, small incremental improvements to the services, but I think it is absolutely imperative, and I'm gonna take it even a step further than just innovation.
[00:38:35] Jon Morris: I believe in this thing I call the pursuit of world class. The idea is that what you want, starting with the CEO and ingrained with your entire company. Is that your services every 90 days should be better than it was in the previous 90 days. And when I say services, not just what do you deliver for your customers?
[00:38:54] Jon Morris: It might be the sales and market department, it might be the HR department, it might be the finance department. But the idea is that you're building something you're just really proud of. You know, if you sit there and be like, I have a really good service, as you said, like, you know, using your kisser example, the innovative component that it has, like, like small 1% incremental improvements compounded over time is a massive, massive, that's right.
[00:39:20] Jon Morris: Improvement. And so I, I think it really starts with the leader, but you gotta reward people for trying new things and making incremental processes. Better and stronger. And so, you know, we do 90 day planning and every 90 days we talked about the small incremental improvements we can make so that we feel that at the end of the 90 days, our business is better than it was before the 90 days started.
[00:39:43] Corey Quinn: And how do you think about measurement? Does each area of the business need to have some kind of KPI or measurement that they're trying to improve on as, as it relates to this innovation?
[00:39:52] Jon Morris: I would love to say yes, but you know. Every decision we make is a leap of faith.
[00:39:59] Corey Quinn: Yeah.
[00:40:00] Jon Morris: Okay. I just gave you an idea that, you know, I probably at some point will take the leap of faith and allocate money towards that idea.
[00:40:08] Jon Morris: And so the idea of data and the idea of having some KPI is great, especially if it helps you take that leap of faith or it reduces the size of that leap. You know, there's some things, you know, you walk into the bathroom of your office and you see that it's dirty, you know? Cleaning it. I don't need a KPI for that.
[00:40:32] Jon Morris: I just know that like, like, you know, that's gonna be better. That's important to do. So I would say that there's a, an expression of those that are measured is what gets managed. And I think that's a really important point. But I also think that if you have too many KPIs, it reduces your decision making.
[00:40:53] Corey Quinn: And this is coming from a, uh, from a metrics guy right now. So, I mean, look, I think you're right. You don't want to. The, the, the lack of having metrics should not prevent you from investing in innovation.
[00:41:04] Jon Morris: Yep. So I'll just give you an example. You mentioned in my intro, my focus on cash, profit, and revenue, right?
[00:41:10] Jon Morris: Yes. Right. And this whole idea of a CPR score. And you asked like, how did I come up with that? So I was in a sales pitch about two years ago, and the guy was like, you know, I'm pretty sophisticated. I look at 315 KPIs every single day. And my take on that is how many hours does that take? Exactly. If you break it out by second, it's a different KPI per second.
[00:41:32] Jon Morris: But you know, if you think about it, you can't make any decisions if you're looking at too many things. A lot of people also often ask me about like, compensation and they want like six different like metrics to like give someone a bonus on, I'm like. You get one, maybe two, because the human can only process so many things to focus on and so, so true.
[00:41:58] Jon Morris: As a metrics guy, I went with the opposite approach. I came up with one simple question, what is the least amount of KPIs to look at to help you make decisions? I love it. That's great. I, no one has been able to come up with a fourth one yet, but I believe there are only three metrics that matter. How much cash you have relative to your monthly overhead, your profit margin, and your year over year revenue growth.
[00:42:23] Jon Morris: Yeah. Now there are other KPIs. I just told you. Four KPIs to increase revenue. Yeah. When do clients increase average order of value, churn and upsells, but that's what's gonna impact your year over year revenue growth. Yeah. And so everything that you do from an innovative standpoint, I really want you to come back to those three metrics.
[00:42:46] Jon Morris: Your cash, your profit, and your revenue growth, and how does it improve those three metrics? Yeah. And so that's kind of the framework that I'm recommending for people.
[00:42:56] Corey Quinn: That's awesome. You know, it's funny you mentioned about the having too many KPIs or too many metrics to follow. It makes me think about.
[00:43:05] Corey Quinn: Certain agencies I've worked with, that I've worked in on the sales team, where they have a comp plan where it's like you have to, it's like 15 different things you have to get right? You have to like, yeah. Uh, there's, there's way too many metrics and in the world of sales, sales teams that don't understand their compensation, how they get paid are not gonna thrive because if it's too complicated, they're not gonna take the time to figure it out.
[00:43:32] Corey Quinn: And as a result of that, what you want to do is make a compensation plan for sales team that is extremely intuitive and easy to get. Because then you're gonna know, you're gonna have a sales team that understands exactly the behaviors that they need to do in order to be able to get paid. Not only their commission, but the bonus and the, you know, the, the president's club and all those things.
[00:43:51] Jon Morris: Exactly. And if you create, even, even when you get to three different metrics to focus on, they don't know which one to focus on. So the simpler you can make this while still having a data driven approach, I think is really important.
[00:44:07] Corey Quinn: That's awesome. So, Jon, as it relates to the, the world of, of innovation and work you do, what else, what else should we cover?
[00:44:14] Corey Quinn: What, what, what area have we not discussed that you think is relevant?
[00:44:18] Jon Morris: Yeah, I honestly think that we've gotten the core components. You know, I, I'll just summarize it again unless you don't want me to, but I, client profile, experience and results. 5% of your revenue dedicated team, either in service design or product development.
[00:44:35] Jon Morris: And if you speak in generalities, you know you're not there yet. Like it has to be specifics of what you're going towards.
[00:44:43] Corey Quinn: Beautifully said. Thanks, Jon. I appreciate you coming on. I've learned so much. I got tons and tons of notes here. I'll tell you my, my, one of my favorite things that you said was, you, you very eloquently talked about how there's two primary levers, at least in the agency space, where it's experience and profits.
[00:45:01] Corey Quinn: If you could be innovative in those areas, continue to, to improve those. Maybe third is profits, but really well is experience results. You said experience and profits. So is experience had results. Excuse me, I'm sorry. Yeah, I skipped over it. So experience and results, profit be the third, but then experience and results.
[00:45:16] Corey Quinn: As long as you're driving those, then you are, you're improving the business, you're improving the lives of your clients, and, uh, overall you're on the right path.
[00:45:25] Jon Morris: Corey, thank you, Pam. Here.
[00:45:27] Corey Quinn: Thanks, Jon. Thanks for tuning in to the Deep Specialization Podcast. If you haven't checked out my bestselling book, anyone, not everyone, you can download the audiobook for free right now by going to anyone, not everyone.com.
[00:45:41] Corey Quinn: That's anyone, not everyone.com. And finally, a special thank you to our sponsor, E two M. We'll see you in the next episode.
