Recipe for Success: Do Less of Better, Not More of Crap

lee

Lee Caraher is Founder, President, and CEO of Double Forte, a “fiercely independent public relations and social media firm” with offices in New York and San Francisco. They select clients that are good companies doing great things in their categories (in particular – consumer lifestyle, digital life, and professional services); and set goals based on business outcomes (ROI)—not PR outcomes. At least 50% of the company’s employees has a minimum of 8 years of experience.

In this interview, Lee provides tips on how to communicate effectively in email messages and why it is important for an agency to be “easy to work with.” She believes that measuring against business goals comes first, because the closer an agency is to meeting its clients’ business goals, the longer term its contracts will be. The longer term its contracts are, the more profit the agency can drive out of those contracts and the longer it will keep its employees. Her company’s average client engagement period from Day 1 is 5-½ years, double the average retention rate in San Francisco. With an eye for the numbers, Lee points out that these strategies also help on the staffing side: Her 16-year-old company’s average tenure for people under 30 is 4-½ years and over 30 is 6-½ years.

During the 2008 recession Lee re-engineered her company. Originally, she had required new hires to have at least 10 years of experience. With the economic downturn, she knew she had to bring on less-experienced people so that when things turned around, she would have a continuum of experience instead of a “hard times” hiring freeze “doughnut hole.” She cut frills, diversified the client base and increased the percentage of consumer goods clients (working with consumer goods clients on a national basis), and told her employees to dig deep with prospective clients. Instead of saying “No” as a first response to clients that didn’t appear to “fit,” she told her agents to say, “Yes, tell me more.” If they got to “No” in the end, they would have arrived there by going through, “Yes,” and not bypassed an opportunity.

Lee can be reached on her company’s website at: double-forte.com or follow her on Twitter @DoubleFortePR.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I’m joined today by Lee Caraher. She’s the Founder, President, and CEO of Double Forte based in San Francisco, California, and is also the author of two books – Millennials and Management and The Boomerang Principle. Welcome to the podcast, Lee.

LEE: Rob, so great to be with you. Thanks for having me.

ROB: Fantastic to have you on here. Why don’t you start off by telling us about Double Forte and what makes Double Forte great?

LEE: Double Forte is an independent – I would say fiercely independent – public relations and social media firm. We are based in San Francisco, and we have an office in New York. We work with clients in the consumer lifestyle and digital life and professional services “chunks,” as we call them.

What makes us different is a few things. One is we are very focused on working with good companies doing great things in their categories, and that’s how we filter to see who we work with. We are a top-heavy agency in that at least 50% of our people are over 8 years of experience, and every team has three people.

Often, we will come in second to an agency who comes in and does a lot of flash and dance, and then we pick those clients up 6 months later. We’re extremely pragmatic and we’re very focused on what is the business goal, not what is a PR goal – because in PR you can be super, super busy and not support the business.

ROB: The agency is about 15 years old? Is that right?

LEE: Sixteen.

ROB: So, you are doing social media today, but you were not doing social media 16 years ago because social media was not a thing.

LEE: Didn’t exist. [laughs] We started our agency before Twitter, and now about 50% of our work – all of our work touches social media in some way, shape, or form.

ROB: I think some people have seen the evolution of social media and even paid social and more performance-based digital marketing as exerting an influence on PR to become more performance-focused as well.

LEE: Mm-hm. [laughs]

ROB: Has that always been the case for you? Have you been performance-focused in PR from early on, or was it just simply harder to measure early on?

LEE: We are not performance-focused in terms of click-through. We are focused purely on influence and traffic. Traffic is different than click-through for us, how we measure that.

Nothing has changed more in the last 15 years than how we communicate as a society. Obviously, the goal of public relations is actually not to go through intermediaries. The original goal of public relations was to actually go to the public, and it turned out to be a media relations focus.

What we focus on today is that we earned, owned in the intersection there of some sponsorship, but not pay-for-performance. But there definitely is – that Chinese wall has broken in many places. [laughs] We choose to use it in a judicious manner.

In terms of how we measure, I wish I could tell you that every client wanted to measure the same thing. I would be lying to you. So, depending on the client, we figure out what to measure over time to demonstrate ROI.

ROB: What are a couple of examples of that? Whether you can get into a particular client or you can just tell us about the product and the business goal? Let’s get into the meat and potatoes there.

LEE: One of our client’s business goals was to get credit for their creation of a category that they were not getting credit for. Our performance, then, “Do the people who say this competitor started this very lucrative business recognize our client as the founder of that or the instigator or the creator or disruptor of that category?” You can’t pay for that. That has to be done through influencer media relations to educate and make sure first, and then how does it translate into media coverage?

That is really a 3-year process, because it doesn’t just happen. Someone doesn’t just own a category and then immediately say, “Oops, we were wrong. They didn’t create it.” That doesn’t just happen. You have to work and educate yourself out of that.

For that client, specifically, it was 50 publications who had written about their competitor who was getting credit – and that truly was the business goal. “These guys are getting credit for the business we created.” I don’t know that it had anything to do with the numbers, but they wanted the credit for creating it.

So, 50 publications, that became 72 or something like that publications, and then working them from the beginning to the end to have an article that talks about the company as a creator.

I know the business, so that was one part of the client. The other part of the client was introducing product lines and getting them into consumers’ hands so that they could drive sales. During this period of time, the sales all went up, but we were doing more than just that media relations campaign on recognizing that they had created this category.

So, it really just depends on the client. What do they care about? What gets measured? Also, not just click-through, but engagement. We can track that very differently than a pay-for-performance would. They work hand-in-hand if done well.

ROB: Excellent. Very, very interesting. You mentioned earlier that sometimes a competitor will win on flash and dance, and you also mentioned that your team is more experienced than many. What I take from that is you are not trying to win on flash, and you are not trying to win on cost – both of which are niches that people do focus on and dive into as a way of winning deals.

How do you think you found your own comfortable spot of really focusing on results and ignoring what may have been growth opportunities to mark up interns and fresh college grads or to hire some really flashy creatives, but not have anything left in the tank for substance?

LEE: When I started the company 16 years ago, I had started an agency for a very large publicly-traded holding company. Starts with an “I.” I’d also been a client with a very hefty business for my agencies before that.

When I left after 9/11, when I decided I didn’t want to work for that company anymore, I actually wasn’t going to do this agency anymore because I was really tired of the agency world. In a publicly traded company, you don’t really have a choice on the fact that you need to grow the top.

And you really don’t have much influence on the bottom, frankly, because you are working through procurement or HQ takes an extra point or whatever, when you’re not in charge. Publicly traded PR firms are all owned by media firms. Very little control. All you can control is the top, but you get measured on the bottom.

So, it’s very challenging, and it does actually incent that pyramid that you just discussed – getting as many people on the bottom at 95% to 115% utilization so that you can drive whatever you can to the net from your topline.

When I started the company, I said, first of all, “That model doesn’t work. There’s always a diminishing return. You will always hit the wall. If you’re the cheapest, there’ll be someone cheaper.” That’s not a way to win. Upselling from a cheap position – in so many years of experience, I’ve never seen that win.

Going down from a place of value to say do less of better instead of more of crap, that is always our position. That comes from my experience having been a client. Before I was a client, I had only been on the agency side and I really didn’t understand who else a client could possibly be talking to during the day.

Then I became a client. I worked for Sega of America as a Vice President of Communications, customer service website, and events there, and my PR budget alone was $11 million, and I had no time for my agencies. Who are those people? I hope they’re working. They’d better be doing good work for me. I had no time for them. And that is true if your budget is a dollar, if your budget is $11 million.

Our point of view has always been, having been measured against the business goals, not against publicity goals or performance goals, but the business goals, I moved that into my agency. We’re going to be measured against business goals number one, because the closer you are to business goals, the longer term your contracts will be. The longer term your contracts will be, the more profit you can drive out of those contracts and the longer you keep your people. Those are all recipes for success.

Is it challenging to not take the fast money? Yeah, sometimes it is. But my experience is our average client tenure in San Francisco since we started the business – I guess it wouldn’t be since we started the business because it was Day 1 – but our average client engagement is 5-½ years, which is double the average in San Francisco. Our average tenure for people under 30 is 4-½ years and over 30 is 6-½ years.

These are things that are business decisions that could be revenue-limiting but life-enhancing. They’re also business health-enhancing over time.

ROB: I think it’s worth rewinding back to that timeframe; I’d not really thought about it. When you’re talking about let’s say 2002-2003, this is probably not, by many people’s measure, the ideal time to be starting a business in San Francisco.

LEE: No. [laughs] You know what was ideal? Here’s what was ideal. I had a co-founder (who since left the agency many, many years ago) and we had a great reputation, having basically built our careers in San Francisco, number one. Number two, you could not swing a dead cat without hitting somebody who needed a job, who had a lot of experience.

When we first started the agency – that was after the dot-com implosion, and we were complaining about Gen Xers then. I’m the last year of Boomers. I said, “No one without 10 years of experience. If they don’t have 10 years of experience, I don’t want to work with them.” Our theory was that they would cost more but they would be more efficient.

That theory turned out to be true in that they definitely cost more, but we were able to get things done at about 25% to 30% faster for the things that we could control, and obviously in our business, that efficiency means profit – which then funded the fact that we had higher paid employees.

In 2008, by that time we were 18 people. I can tell you exactly – 18 people on September 13th, which was a Saturday, when I decided that, “Hey, you know what? I’m going to work four days a week. I’ve built this great team, we’re kicking it, and I’ve been working my butt off since 2002. I’ll work four days a week.”

Well, on September 15th, when everybody imploded in our worldwide economy, by 10:00 I was like, “Oh my God, I will be lucky at five days a week,” and at 10:30 it was six days a week, and at 11:00 it was seven days a week and 11:01 it was eight days a week.

For me, I’d been through this many times before. This was my fourth time going through this kind of situation – I mean, it was the first time on a global scale, but San Francisco scale or the company scale kind of stuff. I knew what to do, and did it, and we survived. We ended up having to lay off one and a half people. I ended up taking off three at the beginning of 2009.

But that made us look at our business model again. It wasn’t the greatest time to be in – it was brutal. Brutal, right? But our business model was not going to work anymore. If our business model had been all people with at least 10 years of experience, heavy implementers, very senior implementers but a very high cost, that wasn’t going to make it through this downturn.

The 2008-2009 downturn was so much different to 2001-2002 because 2001-2002 was mostly about NASDAQ. San Francisco lost 80,000 employees in just a year, professionals, because there were other places to go. In 2008-2009, there was nowhere to go in the country where there was opportunity.

So, I changed the business model in 2009. I said, okay, we can’t have that anymore. What we need to do is lower our cost and grow our own, because we’re going to have a donut hole of about 6 years where we’re not going to have anybody who only has 10 years of experience. We’re going to have either people who have 5 years of experience or people who have 15-17 years of experience, but no one with 10 because between 2000 and 2004, no one got hired.

I say “no one” – I mean very few people got hired into public relations between 2000 and 2004 in San Francisco. It was a 5-year period. So, we were going to run out of people at the bottom of our eligibility. My belief is that you should always be bringing people from the bottom of your eligibility in, so that sort of blew that up.

That’s a very long answer for you, Rob. Sorry. [laughs]

ROB: I’m so glad you connected that dot, because the moment we talked about 2001-2002, I was immediately thinking about 2007-2008 and ’09 and that whole season.

It brings me to the question, then – we’ve been, again, in a fairly good economy in perhaps a very super-heated time, especially in San Francisco. Do you have the updated emergency plan under your pillow for what happens if San Francisco goes back into a downturn in technology, or more broadly? And how has that plan changed in the past 10 years?

LEE: One thing that has changed is that our business is much more diversified today than it was in 2008. Much more consumer goods. In 2008 I think we were probably 25% consumer, probably 70% tech-ish, and then 5% other. Today we are more 40% consumer. So, one, we’re more diversified from a client base, and that was intentional.

Does San Francisco need another agency that only does technology? No, it does not. But it does need an agency who understands the national consumer. In an independent world, all the big firms are here in an outpost, but there are very few independent firms of our size that work at a national level who work in consumer goods at a national level, not just at a local level. So that was intentional.

In terms of what you do when that happens, you strip all costs, you freeze salaries – I mean, there’s things that you do, right? – strip all costs, freeze salaries. The most important thing I learned in 2008-2009, we had gotten to a point where we had grown obviously from 2 to 18 people. How many years is that, 6 years? Pretty modest, good growth. A lot of agencies don’t make it past five people.

But we’d also become a little too good for our britches. [laughs] So September 15th, my CFO, who was part-time at the time, was down in San Jose. I’m like, “Oscar, get yourself in a car and get up here.” We were doing all the scenarios, stripping all the costs, deciding what to do.

Then on the Tuesday, when the world had not imploded totally, we created the plan. I was talking to my clients the whole way through Monday, because we had four clients looking for money that day in New York. We’re like, “Well, we’re going to lose those four clients.” By Tuesday afternoon I had a good sense of what was going to happen. We’re going to lose four clients, two were going to bring it in, blabbity-blah.

I said to my team, “Here’s what we can control. We can control that we’re not going to have lunch anymore. We can control that we’re not going to give parking anymore. We can control we’re going to freeze salaries.” Freezing salaries to me is the first thing to do. Clawback is so hard. “We’ll have water and soda, guys. That’s what we’re going to have.”

Here’s what’s going to happen. We’re going to lose these four clients, blabbity-blabbity-blah – and here’s the other deal, guys. We’ve earned our reputation for doing great work. We’ve earned the right to say “no” to working with some people, but no longer can that be the answer. We have to be the easiest agency to work with. That has to be something that we strive for, because when you are the easiest agency to work with, then they have a harder time getting rid of you.

If you do great work and are hard to work with, you will lose the client – particularly in a downturn. If you do mediocre work and are easy to work with, you will probably lose a client long-term. If you do good work and great service, you will always keep the client.

“No” cannot be the answer. When someone says, “I want to do this,” we can’t just say, “Well, I don’t think so. I don’t really want to do that.” You have to say, “Tell me more.” You don’t say “Yes,” because “No” is often the right answer. But if your client hears “No,” particularly when their pressures just tripled and quadrupled, we’re going to lose that client.

So, we need to get to “no” through “yes” – and the only time it works is in that situation. Doesn’t work anywhere else in life. But get to “no” through “yes” basically became the mantra. The extra people I took out in January were the people who couldn’t do that, who just would not move. Frankly, not moving your point of view when your world changes is a recipe for disaster.

ROB: Those are some great takeaways, although possibly easy to forget in boom times. You could conceivably have gone out and signed 100 tech companies who don’t care about results and just need to do something, etc., etc.

But to talk about trying to figure out how to say “yes” or understanding more deeply before saying “no” I think is a tremendous lesson.

Also, talking about really the customer experience of someone as they work with a company – this is something that we talk about on our team as well – just the joy of getting a quick response versus a slow response, even if it’s just helping them know what to expect – it’s hard and it’s also easy.

LEE: Exactly. But the easiest thing to do – well, the first thing we have to always remember is that as an agency – and frankly, I can’t name a person who’s not in the service business, but as an agency you’re clearly in the service business – you have to prioritize being in contact and not letting them hang, not letting your client have to find you.

Even if it’s not the fast answer – I have to train people. We work with clients all over the world, so sometimes you walk in and there’s 100 emails from clients. I’m like, “Guys, we do not answer the first one first. It’s not first-in, first-out, people.” [laughs]

You read all the emails first, and then you say to your client, “I got 20 emails from you. I’m going to look through them all. I’ll have answers for you by (fill in the blank time) today, or a status. If you need something earlier than that, let me know as soon as possible. But right now it doesn’t look like there’s anything critical that you need my attention on right this moment.”

But understand the lay of the land as opposed to, “Oh, my biggest client sent me an email. I have to do that first.” No, they could just be getting stuff off their plate.

Learning how to use email to your advantage for service is a skill – a skill that we all, as agency leaders, have to teach. Email is other people’s way of putting work on your plate, and understanding how to maneuver email and use it to your advantage is super important.

ROB: Good things. Are there any key bullet points that you teach someone when it comes to using email to serve clients well? You mentioned some of it, about sifting through, not responding to each one in order, but getting the lay of the land and then setting expectations. Are there any other key takeaways?

LEE: One, we don’t leave clients hanging. If an email comes in by 4:30, 4:45-ish, whatever time zone you’re in, they’re going to get an answer that day – even if it’s just “Got it, I’ll get back to you later” or whatever it is. So one, response. Don’t let clients hang.

The second piece is we tell our clients when they can expect responses. Our hours, basically if we get an email between 8 a.m. and 6 p.m. in our time zone, you’re going to get an answer from us. But we don’t require our people to send or respond to emails between 7 p.m. and 7 a.m. unless it’s an emergency.

In an emergency, here’s how you have to get hold of us. An email may not be looked at. If it’s an emergency, it’s a phone call or a text, because then we can alert the team, “Okay, we’re in an emergency situation” – which happens all the time in PR. “Okay, guys, everybody’s got to turn on their email and see what’s going on.” That’s number two.

Number three, the most important thing about email is stopping it, frankly. [laughs] The ping-pong of email is so ridiculous. We teach people how to pull – any email that starts “start from the bottom” is a disaster from my perspective. Not allowed.

You always bring the context to the top of the email with the action items and then the context below the line. 60% of email is looked at on a phone today. Your thumb’s going to get – which is so ridiculous, but three thumbs? No one’s reading past three thumbs.

So, we have everybody, “To your answers, here are the action items. Boom, boom, boom. Here is the status. Boom, boom.” And then below the line is all the detail that you need. But no email can start with – if we’re making our client work, we’re doing the wrong thing.

Now, does our client have to do that? No. We ask them to do emails our way, and we train people. We offer the training on “How to work with your agency the best way.” Most of them don’t take us up on it, but we offer it.

ROB: Right on. As we look ahead for Double Forte and for, more broadly, marketing and PR, what are you excited about, Lee?

LEE: I’m super excited about – I’m on the board of the Public Relations Council, which is the National Association of PR Agencies – which frankly, I was dreading. I was like, “Really, you nominated me? Oh God, I guess I have to say yes.” I was dreading it.

But one year in, I’m actually very excited to be in that group because one, I’m with agencies much larger than me, and two, I’m not alone. These things that I thought I was struggling with myself, we’re all struggling with the same thing.

What I’m excited about – there’s going to be a lot of consolidation in the big firms. There’s going to be a lot of little firms folding. We’re going to enter into a lot of consolidation. Right now, it’s starting to happen now.

What I’m excited about for that is that for Double Forte, “smart small” is always a winning strategy in a downturn, and “smart stall” is always a winning strategy in a consolidation area. As long as we make sure we stay true to that, I think there’s opportunity for us.

The second thing I’m very excited about is when I started in PR, oh so many years ago, we were at the bottom of the totem pole. We were bottom feeders. Today, public relations and communication – being in relationship with somebody, actually having a conversation – is more prized today than it was when I started the agency.

We have many more tools at our disposal. Social media actually plays much stronger to a public relations professional than it does to a pay-for-performance professional in that for things that you’re not paying for where you’re trying to get somebody else to carry your message, we’re built for that. We’re built for that negotiation. We don’t expect a one-to-one relationship, 1:1 ratio. If AORs are going away on the agency side, they’re increasing on the PR side. So that bodes well for us.

ROB: It’s interesting to think about how the personal connections have become perhaps smaller and more frequent. We can target ads really tightly, we can target messaging one-to-one. We’re not just out buying TV ads. We’re not just out targeting article placements.

Is there a way that that world continues to get even smaller in terms of how to dial in a message for a person and make it feel – not creepy, but actually valid and meaningful?

LEE: I think when we think about what the relationship people want between themselves and the companies they service – or are serviced by, either by the food they put in their mouth or the clothes they put on their back or the music that they play or the computers that they use – in the end, there’s a consumer. You could be a business consumer or a personal consumer.

But any way we can actually be in conversation – and there’s lots of ways to say, “Here’s my persona. She likes this word, not that word.” But in the end, it gets down to how quickly we can respond and be in conversation with the people who want to be in conversation with us, even if it’s bad news. Micro is not going to decrease. The long tail is called the long tail for a reason.

But there’s so much peril in the long tail as people try to automate it, because it’s in the variation of the conversation where real, authentic relationship happens. I’m loathe to automate too much of it because I see it backfire. PR gets called when your automation backfires. [laughs]

We get a lot of work out of that terrible automation. Truly, we do. We’re like, “That was the bot? Are you kidding me? Oh my God, next time call me. I will look at them all before you put them into the system.”

ROB: Yeah. We’re recording this the day after MLK Day, and MLK Day is one of those days where you can probably step in it pretty good if you’re not smart.

LEE: Oh, my goodness, right? I saw a great meme yesterday, which was a pie chart. First pie chart was quotes of MLK, huge, like 50% of the social media. Then 49% was pictures of MLK, and then 1% of the slice was, “Do the work that MLK wants you to do.” [laughs]

ROB: Very good point. Lee, when people want to find you and Double Forte, where should they find you?

LEE: Double Forte is at double-forte.com. You can find me there. We blog on this topic all the time, so you can follow us at @DoubleFortePR on Twitter as well.

ROB: Fantastic. Thank you so much for your time, Lee. I’ve enjoyed hearing your story and getting to know you a little bit. Thank you for sharing.

LEE: Thank you so much for having me.

ROB: Be well. Bye bye.

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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