Proof of Performance: Good Work Breeds Opportunity

dan

Dan Altenbernd, COO and Partner of H2M, works with clients to align objectives with allocated marketing budgets. He estimates that 75% of his company’s clients have never worked before with a marketing agency and 75% of his clients are from outside the Fargo area. His company provides key marketing strategy development and tactical deliverables based on a client’s true needs.

Faced with so many marketing “newbie” clients, H2M has a newbie on-boarding process to help clients feel comfortable, using in-depth conversations to discover the client’s pain points, expectations, and objectives. H2M requires clients to define goals clearly and works with them to determine how effectiveness will be measured—not by views or click-throughs—but by proof of performance metrics such as growth percentages. The company strives to deliver intellectual property in a way that tangibly “answers the client’s questions.” Proof of performance is almost a company mantra.

In this interview, Dan speaks of due diligence as being critical for clients that are selecting their first agency—look at the work of agencies under consideration, randomly call clients listed on their websites, and find an agency with that will be comfortable to work with. H2M only works with clients with whom it is comfortable –without contracts!

Trained as a graphic designer, Dan started his career setting type by code in a print shop, providing services as a graphic designer, and as a bartender/waiter . . . all at the same time. He fell into advertising as a traffic manager, scheduling and learning marketing operations. A couple of hops later, Dan ended up at H2M.

Dan’s partner, David Hanson, H2M’s CEO, knows marketing strategy. Dan thrives on being out here, growing relationships, finding new opportunities, and understanding businesses and their challenges. The company’s internal culture is focused on supporting employees, but also allowing broad autonomy, with open paid time off and untracked vacation time. What matters? Relationships and the consistent quality of the work—and not slacking off efforts for clients who “have been around a while.”

Dan offers a few life lessons to ponder. He believes ego has no place in growing true relationships. He warns people and companies to “not believe your own press.” He emphasizes the importance of honesty and transparency in retaining clients, growing friends within the business, and promoting success.

Dan can be reached on his company website at h2m.bizor by email at dan@h2m.biz.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined today by Dan Altenbernd, CEO and Partner of H2M, based in Fargo, North Dakota. Welcome, Dan.

DAN: Hey, thanks for having me.

ROB: Great to have you here. Why don’t you start off by telling us a little bit about H2M and what makes H2M great?

DAN: First, Rob, I’m the COO, not the CEO. I wouldn’t want that to get out.

ROB: Oh, I gave you a title upgrade.

DAN: [laughs] I appreciate that, and I’m going to be passing it up to the partners to see if we can get that switched.

Anyway, what makes our agency great? I’ve been here for 13 years; I just had my 13-year anniversary about a week ago. I’m very proud of what we’ve been able to create in lovely Fargo, North Dakota. We’re a smaller group. We’re only about 16 people strong, maybe 17 when you count a dog or two that wanders the office. We’ve really been able to create an environment where – relationships are a big deal, especially for a small agency like ours.

What we want to be able to do with the clients we work with is make them feel comfortable as they move forward in whatever capacity it happens to be as they’re investing in the marketing dollars, and give them comfort that we’re steering them on the right direction.

I bet about 75% of the clients we work with, we might be the first agency they’ve ever worked with. So, they don’t really know what to experience. What we’ve been able to do is develop a process to bring them into the fold and help them feel comfortable.

On the internal side, on the culture side, I feel that we want to be able to cater to our employees as best as we can – give them the flexibility to be able to create their own destiny and be able to succeed on their own, as well as be able to offer the right type of support.

If they need to take days off, great, do it. We have an open PTO. We don’t track how many days they’re going to take for vacation. If they need to leave somewhere to go to a kid’s baseball game, get the heck out of here. If they need to be able to take a couple health days just for their brain, absolutely.

But at the same time, we create great work, and we’re very passionate about the work that we’re able to put out in whatever market we are. We might be small within Fargo, North Dakota, but 75% of our business is done outside of the area. I find myself on the road all the time. Even this morning, I was talking to a client that we have in Vermont, a client we have in Jersey.

We’ve been able to create a footprint that way, and it’s really been fun to watch the agency grow, to watch the agency grow up, and really be proud of the people that we’re able to work with, both on the employee level as well as relationships we’ve been able to form on the business side.

ROB: Wow, so 75% of clients are out of market, 75% of them are new to working with agencies. What sort of advice would you give to a client on how to think about working with their first agency? You may have set some expectations with them before. And what advice would you give to agencies who are working with a client who has never done so before?

DAN: We don’t have a widget to sell. We’re selling our IP. It really boils down to, when you’re evaluating agencies, do your due diligence and look at the work that they’ve created. Do talk to the references and talk to other clients that they have – not necessarily the ones they give you. Go to their website and just randomly pick up a phone and call whoever they happen to be advocating on their website.

But the crux of it – and this might seem cliché – make sure you get along with them, because you are going to be working with them. Our team especially, we want them to feel like we’re internal, we’re within their four walls. Make sure you get along with the agency, because if you don’t, you’re just setting yourself up for failure.

If you feel like the communications on either side – if they’re not hearing you in some capacity and you feel like it’s going to be a struggle, I would really advise you just don’t even bother. At the end of the day, we’re not doctors and there’s not a lot of lives at stake here. Marketing should be kind of fun. So, create a fun environment for that.

It absolutely always comes down to the quality of the work, but at the same time, get along with the people that you’re going to work with.

ROB: I think that’s really sound advice to think about. If you’re going to be talking to this person this much – oftentimes if someone’s hiring an agency, you’re almost their outsourced CMO, and you want to – at least, I want to – work with people that I like.

DAN: Yes. You don’t want to have a barrier of, “I don’t want to call this person because it’s kind of a drag.” If you have something fun to share, if you want to get working on a project, we need to be very inviting. “I’m going to call up this person, we’re going to have a good conversation, we’re going to solve the issue, we’re going to move on.” That’s really key, we feel.

ROB: You mentioned that you’re actually offering IP. How do you go about thinking about and delivering services in a way that is valuable to your customer in an elevated way versus just paying for hours of some smart young marketer?

DAN: It’s funny. I’m in a peer group with a number of other COOs and CEOs and all that, and we were evaluating ourselves. What are your strengths? If everything went away, what could you rely on?

When you ask that question, it really comes down to is the tangibility of it all is all in the eye of the beholder. What we want to be able to do properly is we don’t want to go in as just – there’s a lot of strategists out there that call themselves strategists, but they just don’t get what their opportunities or their clients are asking for.

What we’ve really relied on is having proper conversations so we hear the proper pain points and we understand what their expectations are and what they expect from us. If we’re able to deliver that, if we’re able to hear them properly, that’s the tangibility of it. They feel like their question got answered properly.

Or if they’re looking for a specific deliverable, we understood what they were trying to accomplish, we heard their objective, we know where they’re going.

Then when the actual work comes in to them, they feel like we’ve been able to provide the solution that was asked for.

ROB: Got it. Dan, did I hear you mention that you are a partner in the agency? But did you join after it was already in motion?

DAN: A little bit, yeah. My backstory, if you want I could go into that a little bit.

ROB: Absolutely.

DAN: I thought I was going to be a great graphic designer, and I knew that coming out of high school. You know those typical people that are drawing, and they think, “I’m going to take this into graphic development.” I kind of knew I was going to be into advertising right out of high school, but I thought it was going to be on the graphic development side.

So, I went to a smaller tech school because it had one of the biggest Macintosh labs in the state of Minnesota at the time, other than local colleges. I thought, “Mac is the wave of the future.” (This was quite some time ago. I don’t want to say how long ago.) I capitalized on that opportunity to be able to really get the working insights of working on Photoshop and all the old – QuarkXPress and CorelDraw and all the freehand software back in the day.

Then I took a few jobs as a graphic designer. I remember one of my first jobs was a typesetter at a print shop, working with a Type Master 2000. A lot of individuals aren’t going to know what that is. I actually had to teach myself code to lay out a 10-sentence line of copy, and then you’d have to develop it and you’d have to wax it on your paper so then it went to press. So, I came from learning Macintosh and I went backwards a little bit.

I took a few other jobs, just kind of stumbling through that, and then I started up my own graphic design studio that was called Red Alert Graphics. That’s some time ago. It was continuing being able to provide graphic development services. I was doing that and I was working at a print job and I was bartending and waitering. You know, just trying to find your way.

Then I stumbled into the advertising world, finally. I was actually the traffic manager – it was at a pretty well-known ad agency that is no longer, in Fargo, North Dakota. I got to learn all the ropes of being a traffic manager, because I was new to the industry. I was doing schedules for the radio, for TV. I was doing the traffic for that. I got to understand how to work with designers. I understood how to work with account managers and the different needs of all aspects of an agency.

But I met a point there where I kind of tapped out. I didn’t want to be a traffic manager for the rest of my life. An individual, an old friend of mine, was starting up an interactive marketing agency in Fargo, and he asked if I wanted to join. It was perfect timing.

So, I left that agency and I joined this local interactive agency that was going to be an agency that had a software that would support it. It was a marketing automation software, if you’re familiar with systems like that. There’s ExactTarget out there, and there’s Silverpop. I think they’re still around. I think they got bought out by Microsoft.

But I was there for 2 or 2-½ years, and, all of a sudden, I found myself in that role, being a sales guy on the phone to all over parts of the world selling the software. I’d been out of the ad game for a little bit. That was a little frustrating, because we had raised angel dollars to be able to get this company started, and I would never have bailed on my angels. I go, “I’ve got to work through this.”

We had an exit plan to be able to be sold in a certain amount of time. But it happened sooner than later, which was a blessing. My angels got taken care of. A VC firm came in and bought us out, took care of my angels, all the first rounders.

A friend of mine that I had worked with at a previous agency had bought out another agency to help them grow, and he and I had always stayed in touch with each other. He asked me to come over and join him and help grow this other agency, and that was 13 years ago.

We had to right some wrongs. We had to turn the ship around a little bit. Took us a couple years. But it’s just grown from that, and now we’ve made a nice name for ourselves and we’ve concentrated on some verticals. We hope to continue to move forward that way.

That’s the long story. I guess I could’ve edited that a little bit myself. [laughs] That’s me in a nutshell.

ROB: I think it’s really interesting how you had that degree of trust and background with your partner in the business. I think that could be otherwise hard to develop. In what ways do you think you complement each other in the good partnership?

DAN: The CEO of the current company, H2M, he knows marketing strategy really well. We leverage that strength and have been able to lean on that experience. He’s quite a bit older. I don’t want to say his age on the podcast. [laughs] But he’s 20 years older than I am, so I’ve been able to learn a lot from him over the years. I’ve known him for 20-some years, I would think.

Being able to learn from someone with that type of experience and then put my strengths into the mix as far as – yeah, I do know marketing, and I know strategy and how to work within that. Sure, I’m this frustrated creative in the back of my brain, but I’ve been able to table that pretty well. But I really enjoy being out here, growing relationships, finding new opportunities, understanding businesses and what they’re going through and understanding their pain points so we can help them grow, whatever means it is.

That’s the way we really complement each other. Being able to bring that to a team and watch them bring their strengths into the mix is really a blast.

ROB: Talk to me about some things you’ve learned. You’ve been working on H2M for a while. What are some things you’ve learned from that experience that you might do differently if you were going back and starting in the role again, or starting anew today, even?

DAN: Yeah, you want me to look in the mirror a little bit? As a younger individual – and this isn’t too long ago – I’m a stubborn individual. That’s just the way my body is. I can remember my father was stubborn also. I have some of his traits and a little bit of, “I want to do it my way and I don’t want to listen to anybody else.” I’ve been able to grow out of that and be more of a sponge and hear and listen to what’s going on around me.

I hate to use sports metaphors, but I always laugh at myself how the answers are usually right in front of me, but it takes me so stupidly long to really understand what’s going on five feet from my own eyeballs. I always go back to – it’s a stupid metaphor; I understand this – but football season, senior year of high school. My fellow receiver, he was just a stud. He’s still a close friend of mine, and he was a great football player. I was backing him up all the time.

I remember I would go out on the line of scrimmage as a receiver, and there’d be a running play or even a passing play. I would try to block this corner right off the line, and I would work hard at it, and I just felt like, God, that’s a lot of work for just a little two-yard run play.

Finally, I think it was the last game of the season, I saw my buddy – he would just run this guy 20 yards down the field. He would never touch the person, he would never block the guy, but he ran him out of the play. I was like, you know what? I wish I had seen that 10 games ago. I always go back to that. Why does it take me so long to see the things that are right in front of me?

I’ve been able to learn to see things and listen to people in the last 10-15 years and really try to learn from that and gain insights, as well as you check your ego at the door. Yeah, you might’ve started a couple companies, you’ve seen a little bit of success, but ego has no place in true relationship growing.

And you can’t believe your own press. We’ve been able to succeed with our agency honesty and transparency, and that goes a long way for retaining clients and growing friends within the business.

ROB: Right on. Something we haven’t talked about perhaps enough on this podcast is that swing from the best days, the worst days, and everything in between. What is one of those moments where you had a great day and then, within the same month, the other end of the spectrum? What does that look like, and how have you worked through that?

DAN: It really is where you get too focused on the left side and you might forget about the right. Especially when you’re trying to grow a smaller agency like this. You’re putting in a lot of effort. You can’t forget the ones that hold your foundation together, let’s put it that way.

Personally, I’ll spend a lot of time trying to meet new individuals, hear their stories, trying to grow opportunities for the agency. I’ve gotten better at this over the years, but don’t forget about the people that are helping you be sustainable on an ongoing basis and taking the time to sit with them and hear what’s going on.

Sure, I might’ve worked with this one company for 15 years, but they’re with you for 15 years for a reason. Don’t forget about this. Continue to put the same amount of effort into the ones that are helping you continue to be a business instead of always focusing on what’s down the road tomorrow.

ROB: Sure. That could be such a tremendous challenge, because you’re out there trying to bring in new business, but sometimes you end up overeating a little bit. It’s really hard to digest that business while also continuing to build new business. It’s a heck of a tension.

DAN: That’s why you need to have people that you trust on staff. That’s a model that we’ve really worked on over the last 5-8 years. The client relationship people that we have in place have the freedom to be able to create tight relationships without the owners having to be so involved on a day to day basis.

When we were starting this agency up, we really did need to be involved constantly, and obviously we wanted to get out of that model. We were able to get out of it, like I said, about 5-8 years ago. We really took a step back. Have trust in the individuals that are working with you to help grow the company, that are helping to create their own path. Give them the autonomy to be able to create their own world with these clients.

Yeah, we’re still involved as owners with almost every client that we work with, but not to the level that we were 10 years ago. That’s helped us continue to grow bonds with the people that we’re working with and given us more opportunities to create the new relationships on the biz dev side.

ROB: Dan, talk a little bit about which channels you’re involved in, which channels you’re not involved in as an agency, and where you’ve made decisions to say “yes” or to say “no” to different types of business.

DAN: What we’ve done is taken a strategic approach on what we focus on and what we really feel like we can do well. We used to do web development internally, but we just didn’t ever really get a handle on it. So we decided to form strategic relationships and partners with people that do that on a day to day basis. We do that with search engine marketing, too. We have formed relationships for that to be able to bring in best of breed or people that we trust, that can provide quality work to our clients.

Again, we’re a smaller agency. Let’s focus on what we really enjoy and what we feel like we really do well, which is developing sound strategies that solve the issues that our client relationships have. We’ll bring in trusted resources when needed.

Internally, we do strategy really well, and we would rather focus on the results of a strategy that we provide instead of just – there’s some advertising awards out there that are based on just how good the ad looks, not the results. We want to be a proof and performance agency. That’s what we really want to be able to provide to our clients.

Everybody should be able to create a pretty ad for you. Any ad agency should be able to do that. It all comes back to providing a strong strategy and strong brand development. But internally, we do all the ad development, we do the media placement and recommendations, we do content development. We do a lot of videos, both digitally and we do TV ads, radio.

There’s a part of us that – the traditional forms of advertising are still worthwhile. You’ll read these reports where “everything’s going digital” and all this. Hey, TV and billboard advertising are still really effective. I can pull up an Ad Age article any day and show the results of people and viewership and all that.

It’s just the strategy of how you place it, when you place it, who you’re talking to, and being able to have a media department that really knows the insights to that. That’s another great thing that we’re able to leverage as an agency.

We’re going to continue to really ramp up and really leverage our strengths, which is providing key strategy development based upon what the objectives are of the clients that we work with. Then we’ll figure out how to handle the tactical deliverables of that based upon what their true needs are. That, again, comes back to proper listening and being able to understand what they’re asking you for.

We talk to a lot of clients that will talk to us like, “We know we need the market. We’re not sure the direction that we should go.” Hopefully we can help them walk through those weeds. But sometimes some people are very clear on what they want, and we don’t want to have a knee-jerk and take for granted we know what they’re saying.

We want to be able to hear them properly so we come back to them and give them – we call it the warm hug. Give them a warm hug. “We heard you, this is what we recommend.”

ROB: Dan, you mentioned that you are a “proof and performance” agency. I would imagine that over the past 13 years, the nature of proving performance has changed quite a bit. How have you been able to evolve that model, and what does proof and performance look like today versus in let’s say 2005?

DAN: You’re going to get a very honest answer to that. I call it the machine. We set goals with all of our clients. We hold them to. “We are going to start doing strategic marketing for you for a reason, to get to X results. What does that look like internally? Does that mean we’re growing this part of your business by X? What is it? And then how are we going to be able to measure that?” That’s very key for us when we first establish that relationship.

Then we want to be able to track it appropriately from whatever’s happening internally on sales or however they’re looking at it. When we work with banks and they want to drive loans, then we’re measured by the number of loan applications that come in. We don’t find ourselves responsible for closing it because we have no say in what’s being approved within their own four walls.

You can come back to them and say on your digital side – you’ve got stats forever. “We’re getting this much exposure, this many click-throughs, this is how many people saw it” and everything. But at the end of the day, that doesn’t matter if it’s not satisfying the growth percentages or objectives that are happening internally within the company. You can have the greatest campaign out there that you feel, but if consumers aren’t responding to it and we’re not reaching goals that we’ve established, then something’s got to change.

We measure ourselves based upon those pre-discussions, like “What are we trying to grow here? How much time do we think we need to give this before we have to change it up?” That’s how we monitor our success – by pure business objectives instead of just “we’re going to try to reach this many impressions by this many days, and this many people are going to see it.” Again, if it’s not working on the business side, it doesn’t really matter.

ROB: That’s really interesting. What I think I hear there is there’s a few little kernels to pull out there. Number one, I hear you say that you’re agreeing on the metrics ahead of time with the clients.

Number two, I’m hearing a significant focus on transparency, where you’re really getting into the core of the business to agree on something meaningful but also upstream from the final business goal. To your point, you can’t close a loan origination, but you can generate the leads for it.

DAN: No. They might have credit issues. They’ve set certain levels within their financial institutions that we just don’t have control of. But when you get to those aspects, it does affect how we target and how we speak to certain audiences.

But again, we should know all of that before any campaigning or strategy is starting to be developed and before creative starts getting developed. Those metrics should all be in line and we should be in agreeance in that before any type of work kicks off in any way.

ROB: Dan, looking forward a little bit, what are you excited about that’s coming up for H2M, or more broadly for marketing and the opportunities available to agencies?

DAN: I’m happy with the progress that we’ve been able to make as far as an agency. It all comes down to focus. When we first were getting H2M rolling, we were pretty much throwing everything against the wall and hoping something stuck. Whatever would stick, we’d try to capitalize on it. The term is we were “eating everything that we were killing.”

What we’ve been able to do is really focus our efforts on both the local side of it – properly know who we are and try to gain opportunities that way – and also focus on other regions within the country. Having that focus is really going to help us grow, I believe.

One of the things that we’re good at, and being able to recognize it also, we had a tourism group come into our agency – actually, threw us an RFP. This happened a couple years ago, but it showed how we’re confident in how we approach new opportunities.

It was a smaller Minnesota County tourism opportunity, but it was one of those opportunities for our agency where I could see that we were going to be able to have some freedom on the creative side. Sometimes that’s hard to do. We love working with banks, we love working with hospitals, but you don’t get to do really crazy, out-of-the-box stuff. Let’s be honest with that.

This opportunity came in to do a tourism campaign. They had a pretty small budget, and I called them up. I said, “Based upon your parameters” – the friend of mine, I’ve gotten to know him pretty well in the tourism group. He said they had a $300,000 RFP, but they could only spend $30,000. That’s what they were asking for.

I said to him, “You’re going to have 10 agencies that respond back to you and say ‘We’re going to be able to do all this for you for your budget. This is going to be great, let’s kick it off.’ Why don’t we take a little smidge of that, a little portion, and let’s just do a sound strategy? Let’s take it slow. Let’s not talk about tactical development. Don’t have any preconceived notions or knee-jerks that you want to do this, this, and this. Let’s get a strategy down. Let’s get a brand down for your county tourism that then could grow, instead of just haphazardly putting it together every year.”

That really resonated with that individual, as well as the board. Now they’ve been a client for 4 or 5 years. We started with a strategy, we did a really unique campaign to draw people. It got a lot of press locally.

Again, it wasn’t a huge account, but what we did was invest our time that then raised our brand equity as an agency. It’s having the flexibility as an agency to be able to do that – as well as the team within H2M really enjoyed working on the campaign. It was such a positive thing on so many levels.

I’m excited to continue to do that. It’s those type of things that I really like to seek out. When we see them, we try to grab them right away. It does so many things on so many levels for the agency as well as the culture and the people that we’re working with.

ROB: That’s a beautiful story of a client and you as an agency playing the long game together. I think early in digital, with backgrounds and pay-per-click and all these more transactional, “SEO ranking in 3 months or else,” to be able to play the long game and create – when you’re talking about tourism, and we’ve looked at measurement around travel and tourism before, creating an impression of a place as a place that people want to go is hard to do overnight. And it’s hard to change overnight. Las Vegas is still dealing with trying to un-brand itself as this den of bad behavior.

DAN: [laughs] You’re right. You talked about long game – it’s funny, that’s exactly what it was. Talking with them, they’re like, “Yeah, hopefully within 2-3 years we have double the budget or we have triple the budget. Hopefully that’ll happen and we’ll continue to work with you.” I was like, “Whether that happens or not, it doesn’t matter. Hopefully we can help you now. But yes, we’ll develop good work, and hopefully our relationship stays strong as you continue to grow as a group.”

I’m a firm believer that, again, by investing in that, good work breeds opportunity. I’ve said that to our staff so many times. I’m out there a lot myself, and I love talking to individuals, like I stated before.

I often say to my team when they do something that is just kickass, I’m like, “You make my job so much easier when I’m able to go out and just show off your work.” People are like, “Wow, that’s cool. How do we start working with you?” That type of thing. That’s happened, and those are very, very good days.

Some of the things that we believe in, too, on the other side of the coin – we don’t hold our clients to contracts. I always find it – I don’t know what the right word is there, but when a marketing agency is able to lock in a client on a contract for 2 to 3 to 4 years, I’m always amazed by that.

We find ourselves being in such a relationship business, we don’t have contracts. I basically say, “Hey, if we stink, we’re not hitting the mark, you need to be able to get rid of us right away.” That’s what we’ve been able to do. Having that trust, a month-to-month relationship – we might have a whole year planned for them, but there’s no guarantee that they need to keep working with me.

Just being able to provide that comfort that if something goes wrong they can bail, that actually helps quite a bit as we continue to grow too.

ROB: Indeed. Dan, when someone wants to find you and H2M, where should they find you?

DAN: We are found on the World Wide Web at h2m.biz. We call it our living, breathing portfolio. We try to keep it updated as best as we can with some of the groups that we’re working with. It has some of the vertical focuses that we work on there, too. On our website, it gives you a good idea of who we are, what our culture is, and the kind of work that we can provide.

Or else you could just email me at dan@h2m.biz. That’s an easy way to get to me, too. I’m an open door.

ROB: That’s perfect. Dan, thank you for your time and sharing. I think with that “good work breeds opportunity” statement, we may have an episode title right there.

Special thanks today to former guest Dean Browell from Feedback Agency for this connection. We love good referrals for great guests, and we’ve seen that here today. Thank you so much, Dan.

DAN: Absolutely. Thanks for having me.

ROB: Catch you soon.

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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