Changing the Marketing Game: Technology and the Gig Economy

Daryn

Daryn Smith is the Cofounder and Director of Mpull, a full-service inbound marketing-technology agency serving South African companies and, to a greater extent, partnering with and supporting agencies from around the world. Mpull has 50 employees as of this interview and is a Diamond HubSpot Partner.

Working together at Verizon, Mpull founders, Daryn Smith and Graeme Wilson saw a huge waste of marketing dollars. Six years ago, they started Mpull with the dream of having a Software as a Service business, providing a software for managing marketing and tracking return on investment. The company pivoted into an agency when they discovered that this type of product was already offered by a number of MarTech providers. Software as a service still remains a long-term goal.

In this interview, Daryn talks about technology’s impact on marketing . . . many brands are replacing work that agencies used to do for them with marketing technology software . . . and getting faster, better results with more scalability. The result? Fewer brands are interested in signing long-term retainers.

Daryn presented “”Why Agencies Need to Pay Attention to the Gig Economy” at HubSpot’s Inbound 2018 conference. In a gig economy, you only pay for what you need, when you need it, and where you need it. Daryn sees a big trend in this direction. So who needs it?

Much of what marketing agencies have done in the past can be done today with software . . . better, faster, and with greater scalability. With software “lifting” much of the load, many brands are starting to build “in-house agencies” The result? Fewer brands want to sign long-term retainers with marketing agencies.

But, just as one marketing agency rarely excels in all aspects of marketing, software cannot do everything.

When Mpull started getting “a lot of small project requests,” the administrative overhead made an hour project massively complicated and expensive. Daryn realized the growing gig economy needed an easy way for agencies to engage with brands on a gig basis, with integrated payment processing and administrative functions, brand-to-service provider matching, and the ability to start work immediately

Because Mpull works with a lot of agencies, Daryn was also aware that highly-skilled agency staff still pull salaries, even when they are “on the bench.” How could Mpull give its agency partners around the world an additional way to make revenue when their employees weren’t busy?

Daryn describes Mpull’s “On The Bench” platform, which manages gig administrivia overhead, enables agencies to engage in the gig economy, and provides agencies with “burst capacity” when needed. He talks about the policies needed to protect your client base, managing rates to prevent commoditizing services and a consequent “race to the bottom,” and how to maintain a base of recurring revenue.

Daryn can be reached by email on the company website: Mpull.com, at @darynsmith on Twitter, and on Linked at (https://www.linkedin.com/in/darynsmith/). The “On The Bench” website is: onthebench.io.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and we have a very special bonus episode in our Inbound Conference series with a little post-conference online episode. I’m joined today by Daryn Smith, Cofounder and Director of Mpull based in Cape Town, South Africa. Welcome, Daryn.

DARYN: Thanks for having me.

ROB: Fantastic to have you here. Why don’t you start off by telling us a little bit about Mpull and what makes Mpull great?

DARYN: Cool. Mpull is 6 years old at the moment. We founded it because my cofounder, Graeme, and myself both worked in the corporate space, actually for Verizon. We saw that there was a huge amount of marketing budget going to waste.

Our initial idea was actually to create a piece of software to help marketers manage their marketing and track return on investment. Then we found that there was actually a whole bunch of MarTech providers like HubSpot that already do that, so we pivoted our model and became an agency.

At the moment, we’re just over 50 people here in Cape Town, a full service inbound marketing agency. We’ve got clients in South Africa, but the majority of our clients are actually other agencies from around the world. We work with agencies across all time zones, from Australia all the way across to California.

I suppose what we’re great at is around supporting all those different agencies. It’s very interesting working with agencies as opposed to most people who end up working with direct clients.

ROB: Fantastic. Fifty people, that’s quite impressive to build that up from scratch. You’re pretty specialized into more of this inbound space, then? Are you sometimes white labeling or partnering with these other agencies around the world?

DARYN: Yeah, we mostly partner with these agencies. We did try the white label model for a while, but we realized clients are clever. They can go onto LinkedIn, they can look up who they’re talking to, and they’ll realize that it isn’t the agency that they thought it was. [laughs] So we mostly partner with these agencies.

Yes, we do a huge amount of inbound marketing; we use the HubSpot platform a lot. But we consider ourselves more as a marketing technology agency, because in particular with HubSpot, there are so many different tools that integrate into it now. We find many businesses are rolling out a marketing technology stack to self-manage their own marketing. They’re often actually replacing a lot of things that they used to do with an agency now with a piece of technology.

ROB: With you and your partner I presume working together at Verizon, what was it – did you always have an entrepreneurial mind and expect you may do that someday, or was it perhaps more difficult to make that initial jump?

DARYN: I think wearing a tie and suit every day didn’t really suit our personalities. All the red tape involved in working in a big multinational didn’t suit them either. So I think we were always entrepreneurial.

Our dream was to have a Software as a Service business. An agency or services business was a byproduct of that. But we are constantly working towards eventually getting more focus on our own Software as a Service offering. We do work with a lot of software/IT technology type companies.

But yes, definitely also one of the things that makes us a bit different is we’ve never built our agency where we’re the passionate designer, the passionate copywriter, the passionate strategist. We’ve always tried to build the agency in a very scalable way – which has had its pros, but it’s had big cons as well by doing things that way.

ROB: It sounds like this is leading a little bit into the talk that you gave at the Inbound Conference, which was, “Why Agencies Need to Pay Attention to the Gig Economy.” Let’s start with why. Why is that?

DARYN: That’s a big answer. What we’re seeing, as I was saying, is many, many brands opt in to roll out a MarTech stack. You get things like Scott Brinker and your conference where you have The Stackies.

Brands are replacing – a lot of stuff that agencies used to do, they can now do using a piece of software. They can do it better, they can do it faster, they can do it in a scalable manner. They’re starting to build these almost in-house agencies. What we’re seeing is there’s fewer brands that want to sign long-term retainers.

As an agency, we started to get a lot of small project requests. Because we know marketing technology very well, people would call us when they were stuck and say “I really don’t know how to set up a chatbot. Can you help me set up a chatbot or this landing page or this workflow?”

Our process to take that work on would make it very expensive. We would credit check them, and then we would get them to sign a contract, and then we would have an internal kickoff and then an external kickoff, and then the project managers get involved. It’s this massive, massive process. The actual work that needs to be done is maybe 45 minutes or maybe an hour and a half.

So we started to see that there needs to be a way that is very easy for agencies to engage with brands on a gig basis, where all the payment processing and all that type of stuff is taken care of, they get matched to a service provider, and that work starts immediately.

The other trend that we were seeing because we work with so many agencies is that in some agencies, their employees will finish a project or a client cancels or there’s maybe just 3 or 4 days before the next big project starts, and you have highly skilled people that are pulling in a salary, but they don’t have anything to do.

So, we were also trying to think of, how do we give all the agency partners that we work with around the world, how do we give their owners and their shareholders an additional way to make revenue when their employees aren’t busy? That’s where the name of our platform, which is On The Bench, that’s how we came up with it. There’s a whole bunch of employees at any given moment essentially sitting on the bench, waiting to be put into play.

We’ve got a huge passion about the gig economy. We really believe that’s where the world is going. We’re seeing that brands are preferring to operate that way.

You see it around the world. You take the Ubers and the Airbnbs and the Handys and all those other – WeWork as an example – that have all embraced the gig economy. They’ve gone and really disrupted these old, rigid, slow business models, and they’ve given the customer an alternative. That is, you only pay for what you need, when you need it, where you need it.

That’s what we’ve seen as a big trend in the marketing space, and that’s why I spoke on that topic.

ROB: Got it. To summarize and speak back to you what I think I’m hearing, there’s a dynamic where clients are expecting to engage on a gig basis, and then there is also an adaptation that you’re seeing with On The Bench where agencies are actually able to work together to add burstable capacity by using each other’s capacities. Is that the picture you’re talking about?

DARYN: Yes, absolutely. By all means there’s freelancers involved as well, but there are a huge amount of agencies that have extra capacity that they have available. What we like about working with agencies in this way is – we’ve had fantastic freelance experiences, but we’ve also had terrible freelance experiences.

You’ve got to ask yourself, is this person a freelancer because they’ve chosen to be a freelancer, or because nobody wanted to hire them, so now they have to be a freelancer? By working with agencies, you almost guarantee that the people that are going to be doing the work have passed an interview, have managed to successfully get a job. The quality is very high.

We’ve tried facilitating agency-to-agency relationships before, and especially on longer, bigger projects, people are very scared that you’re going to steal their clients or their clients are going to rather want to work with you. So there’s always been that level of awkwardness.

But what we’ve tried to do is break the jobs down that need to be done into bite-size components so there isn’t that threat that we’re going to outsource an entire website or an entire eBook or something like that to another agency, and then they might steal a client. It’s more a case of maybe we need a particular module built or a particular design built.

ROB: How important do you consider, in that context, a non-solicitation of employees or of customers? Is that a dynamic, or is that too long a bridge to ask people to cross?

DARYN: When you sign up on the platform, you accept terms and conditions that say you won’t go and solicit business from others and that type of thing, but people don’t necessarily pay attention to that.

One of the things that we started recommending is that you develop a process or procedure or methodology within your own business around the side hustle. Many, many millennials nowadays have a side hustle. For the first time ever, the millennial generation is earning less money than their parents did. So, there’s a need to earn an additional income.

We’ve seen cases – and we’ve allowed it because we’re launching the platform ourselves – some of our employees have bidded against us. So, it’s important as an agency that you set up that policy to say when you are allowed to do things on Upwork or PeoplePerHour or Fiverr or On The Bench.

One of the things that we recommend for agencies is sign up with a platform that allows you to create almost an agency profile, and you can have users underneath that. Then build some sort of comp plan for your employees. The more jobs that they get done, they get their base and then they get a kicker on additional work finished so that you’re not necessarily competing against them.

ROB: Got it. One thing I have seen often when agencies try to work together on this when they’ve got bench time is they’re very inclined to try and charge the same rates all the way through. But you sort of have this Russian doll problem, where my rate has to fit inside your rate for us to work together.

How do you recommend that agencies think about taking on these deals where they didn’t have to go out and win the deal, and it’s easy for them to bring it in, but they may not get the rate that they’re used to? Or do they?

DARYN: That’s a very good question. You’ve got to realize that these agencies, the people that they’re putting onto these platforms generally don’t have anything to do in that moment in time. So, either they’re going to be earning zero dollars an hour, or they can earn something per hour.

But on the flipside, what we definitely do not want to do is promote the race to the bottom. We don’t want to commoditize agency services. Every time I go onto one of the well-known platforms and I see people bidding for work at $10 or $20 an hour, I know that that’s going to have a negative impact in a couple months’ time on my core business, which is my agency. Because that starts setting expectations that, “I can get a video created for $15 an hour.”

In our platform, we really promote charging the proper hourly rate that you would normally charge, but taking into consideration that you wouldn’t normally be making that money because that person wouldn’t normally be doing anything. So maybe reduce it a little bit, but definitely don’t take it down to those really, really low rates.

ROB: I think it’s a careful balance there. Certainly, the logical conclusion is commodity – and often that freelancer problem that you described, where the work may be a race to the bottom in cost and may not even be a great product through to the client.

DARYN: Absolutely. I saw a job the other day posted, and I could’ve made more money going to pour beer at a local bar than do highly skilled marketing work.

ROB: For sure. Is there any work that you think is very effectively and repeatedly outsourceable for an agency to an Upwork, to a Fiverr, or something like that?

DARYN: With over 8,000 pieces of technology in the MarTech infographic, you can’t possibly be an expert at every single one. What we recommend is that as an agency, you decide what you want to be an ‘A’ player at, and you do that yourself. Everything else, you then find somebody else that has decided to be an ‘A’ player in that other thing.

We believe that there’s no limit to what can be outsourced; it’s about getting the best quality people for particular plays. That’s another play off our name. On the football field when you’ve got a certain play you want to make, you bring in certain players.

It’s the exact same thing. If you’ve never set up Viddyad or Terminus or one of the ad roll or anything like that, you can go and do all the online training and work out how to do it, but most of the time you don’t have 3, 4, 5 hours to go and watch videos and read knowledge base articles. You just need it done right away.

So, we say, “Know what you’re good at, promote that to others, and then use others with things that you don’t know how to do.”

ROB: Very smart. Daryn, you’ve been doing Mpull for it sounds like about 6 years. What are some things you would do differently if you were starting from scratch?

DARYN: I’m sure people say this very often, but, be more selective of which clients we’re going to take on. Being entrepreneurial, it’s difficult for us to say “no” to clients. One of the things that definitely helped is when we hired a salesperson that, although they have targets, they’re not as invested in the business as the two founders are.

But there were definitely many wrong foot clients – clients that were too small, clients that we gave special pricing to – that in the end really affected our cash flow negatively, and a couple of times almost put us out of business. So, we would definitely be more selective over what type of clients we take on if we were to do this all over again. As a result, we’d probably grow slower, but more healthily.

ROB: For sure. When did you realize it was time to bring on that salesperson?

DARYN: We were doing the sales ourselves. I think we still can sell the story and why we do this very, very well, better than a salesperson, but as we’re entrepreneurs and we’ve got short attention spans, we’re always following new ideas and innovations. We found that if we even got distracted for 2 weeks, we’d look at the pipeline and the pipeline would be going flat.

As soon as we could afford a salesperson, that’s one of the first non-billable resources that we hired. And it has made a huge impact, because there’s people looking every single day at the pipeline.

ROB: How did you find that salesperson and realize that you had at least a pretty good shot of them pulling off what you needed them to do?

DARYN: What we did is looked for a marketing strategist. We did have a salesperson for a short while who was just a through-and-through relationship builder, and they could open the doors. But then when it came to building a solution, it kept on coming back to the delivery team and it was slowing things down.

The salesperson that we ended up hiring is a marketer. They can understand the clients’ needs. They put together a high level proposal that makes sense to the clients, and then we hand it over to the delivery and execution team.

We were looking for somebody that has been a marketer, has got experience, but didn’t like to be deskbound and wanted to enjoy the chase. We looked for a people’s person. It took quite a while to find the right person, and as I hinted there, we did have somebody before that and that didn’t work.

My recommendation would be don’t rush it. Really do take your time finding that right person.

ROB: That first person, did you have metrics that you were holding them to as well, that made it perhaps a little bit easier to part? Is that wise?

DARYN: Yeah, 100% on that one. I find that the easiest position to replace or make redundant in a company is a sales position, because the KPIs are black or white. There’s no gray area, like with a copywriter, is this a good paragraph of copy or is it not? But with a salesperson, did you make your target or did you not? So yes, definitely set those targets.

I think one of the important things is looking at recurring revenue targets versus project targets. If I use that first person as an example, they did very well in bringing in projects, but that meant that we were constantly chasing new business. We didn’t clearly define in their goals that a large percentage of their target needed to be recurring revenue.

ROB: What are some of the keys to unlocking recurring revenue rather than just taking project, project, project?

DARYN: With the marketing technology model that we follow, we sell three types of recurring revenue retainers.

First of all, there is basic implementation retainers. The client can log tickets against a retainer to say, “Hey, I need this set up in Databox or Terminus, I need this set up in HubSpot,” and we execute that. The larger clients are not comfortable just using the gig economy to support them. They want the security of knowing that there’s a team behind there that can, if they need something, it will be set up.

The second retainer we sell is a strategy and analytics retainer. What we find is a lot of marketers don’t have the time or the knowhow to dig deep into the different tools and work out trends and recommendations and what the data is telling them.

The third retainer we sell is a content production retainer. Most of these tools require the creation of various types of content, whether that is basic blogging or eBook content or creating calculators and interactive infographics and that type of thing.

ROB: That’s good stuff to think about. I think when you can decouple those services from the execution, when you’re not just billing everything on time, that can be freeing. But also, I think you can do right by the client by creating efficiencies instead of creating inefficiencies, where you bill more hours and you have more people that you have to manage and so on.

What’s coming up for you, Daryn, for Mpull or perhaps more broadly in the marketing world, that you are excited about?

DARYN: Leading on from your question earlier about what we would change, one of the other things that we would change if we were to do things today is hire a much more highly skilled employee. In the beginning we managed to get away with a lot of junior employees because we were doing a lot of content production and basic implementation.

But as these pieces of technology that we use are getting more and more complex, more and more advanced – some of the features that were launched at Inbound are absolutely amazing, and I’m really excited to see where that’s going. Our team is tracking closely behind that, following all the different – not just the HubSpot product launches, but the various products and what they’re doing for their personalization in the world, more and more artificial intelligence and machine learning type stuff.

My absolute favorite thing that got launched at that HubSpot conference was the transcription tool which transcribes your conversations that you have, and then it uses AI to let the sales manager know, “Hey, this sales guy is doing really well and he always uses these sentences.” Then it does the same thing on the poor performers and says, “These guys aren’t doing so well; you should get them to not say these things that they always say in their conversations.”

There’s really, really awesome technology stuff that’s coming out, and we’re really excited to continue rolling out and supporting that.

ROB: Got it. Is that transcription a pretty good transcription, like a Google Voice? Or did they figure out a way to even do one better than that?

DARYN: I’ve tested it a couple times. I’m not sure if they fully understand my South African accent every time. [laughs] But I’ve found it pretty good so far.

ROB: Every automated transcription service, I haven’t seen one that’s perfect. That’s why we still – bringing the conversation full circle, we’re in the gig economy with a really great transcriber that we use for this podcast. You can actually read what we’ve said.

DARYN: Awesome.

ROB:  It’s pretty cool. Daryn, when people want to find you and Mpull, and even On The Bench, where should they find you?

DARYN: Our website is Mpull.com, and then the On The Bench website is onthebench.io. It’s so difficult to find a domain name that isn’t taken, so we got the dot io. [laughs] We’re there; there’s live chat on the site. Or drop us an email, follow us on social media.

But yeah, we’re actively involved every day still, so if you want to reach out to myself or Graeme, just drop us an email via one of those websites and we can get in touch.

ROB: That’s pretty fantastic. It sounds like whether someone knows that they need your services directly, if they’re an agency that wants to offer what you offer, or if they’re just looking to swap some people’s bench time with some other agencies, there’s a lot to dig into here. I’m glad you came on and shared and made some time after Inbound – because Inbound itself was pretty darn busy.

DARYN: Absolutely. We’ve been really, really busy since coming back. One of the things with On The Bench, as an example, is with all those new features, there’s many people that don’t know how to use them.

Take the chatbot feature as an example. It’s quite a complex tool to configure. So we’ve been making sure that there are ready-to-use recipes on On The Bench that people can simply click, and it follows a template so that the people that aren’t coding chatbots know exactly how to do things.

ROB: Excellent. Daryn, thank you for your time. Thank you for coming on the podcast. I enjoyed hearing more about you and Mpull and On The Bench.

DARYN: Yeah, likewise. Thanks so much for having me.

ROB: Take care.

Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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