Kraig Guffey, Founder and Strategic Director of Atlanta-based Syrup Marketing, provides insights into successful merger and company growth strategies for firms working with smaller clients. He suggests that merges can be effected most effectively when companies have compatible leadership and cultures, are of similar size, and serve the same or similar customers with complementary, adjacent client needs. He notes that a good merge can result in explosive growth, which is better accommodated through process, rather than through adding staff. Other critical factors for managed and sustainable growth include defining the market your company will serve, right-sizing the business to serve that chosen market, and identifying companies qualified to meet the needs of potential clients who fall outside of your chosen market.
Kraig highly recommends EOS (Entrepreneurial Operating System) Traction for streamlining small business processes. https://www.eosworldwide.com/
Kraig can be reached at:
Syrup Marketing’s Website: syrupmarketing.com
Rob Kischuk: Welcome to the Marketing Agency Leadership podcast. I’m your host, Rob Kischuk, and I’m excited to be joined today by Kraig Guffey, founder and Strategic Director of Syrup Marketing, based in Atlanta, Georgia. Welcome, Kraig.
Kraig Guffey: Hey there, Rob.
Rob Kischuk: Thanks for coming on. Why don’t you start off by telling us a little bit about Syrup and about what your company is great at?
Kraig Guffey: Yes. Syrup is a marketing agency that focuses exclusively on small companies—that definition, people use it in different ways. Our core focus is around those businesses with between 5 and 60 million in annual revenue. We specialize in brand work, visual identity systems, website design, brand strategy, and digital marketing. We have a way that we go about that that’s a little bit different. but tactically speaking: paid search, social, email—all digital tactics. We leverage brand and marketing for those small companies.
Rob Kischuk: What led you to start the company? How did you get to where you are now?
Kraig Guffey: Yes, my personal story. My first job out of college was for an agency here in town, in Atlanta, called Response Mine, which I loved it. It opened up my eyes to this whole world of agency life and that they exist and I loved it. I worked for them for several years and then got the opportunity to go behind the agency to the vendor/technology/startup world with a company called Blink Media. Also people learned a lot. That business was acquired and I got to experience what that was.
A lot of people hear stories of the pain or frustration or the “not exactly knowing what to expect” when you are acquired. That happened to me. Once the acquisition happened, the whole vibe changed. Ultimately, it was the straw that broke the camel’s back. I didn’t want to serve large corporate companies anymore. I was looking for that next opportunity. I met Benj Miller, who is one of the co-founders of Syrup. I saw what they were doing in his world serving small companies. I was like, “I think we could take the marketing stuff that I’ve learned over the years for these Fortune 500 companies and take it to a market where maybe they don’t get that.” We started Syrup primarily as a marketing automation company for that market.
We were building Syrup. Benj also had a business called Eyespeak, a brand and design firm he had been running for about 13 years. He was running Eyespeak. We were mutual partners in Syrup and for about a year and a half, we kept seeing our unique client bases meeting each other. On the marketing side, we talked to a business and say, “You don’t look professional enough. Your message isn’t clear enough. As a marketer, I have nothing to work with. You need to go talk to Eyespeak.”
Eyespeak would build brands and say, “Here’s your message. Here’s what you look like. Here’s your website.” These companies would say, “Okay. Now what do we do with it?” Eyespeak would say, “You should go talk to Syrup. They’ll help you out there.” We did enough of that passing back and forth that it was, “Hey, let’s bring these two businesses together and bring both skill sets into the same house so that we can better serve the market.” We did that three-and-a-half, four years ago. We merged the two businesses together.
Rob Kischuk: You’re saying that, because of having adjacent customer bases and adjacent needs that were very complementary, it made sense for the businesses to come together—but partnering in a business is also a very personal thing. How did you gain comfort over that time that it was going to be a personality match that worked well—leading a company together rather than leading separately, because that can be easier in some ways?
Kraig Guffey: Sure. I think when Benj and I first met it was serendipitous. We had a mutual friend who connected us. From the very first conversation, we hit it off. I count myself very, very lucky because I know that that is not always the case. I got to know Benj through starting Syrup and working with him over that first year-and-a-half of the business, going from one person, me, to what we are now. I got so comfortable with that first-year-and-a half-that it made me say, “Hey, this is a no-brainer, merging these two businesses together.“
That was really my service, getting to know him and Jason, our president, over that first year-and-a-half—that made it worth it.
Rob Kischuk: In the leadership, compatibility really matters. Beyond that, however, you also have your team and each of the two teams in the companies. What advice would you give to someone who’s looking at combining two companies when it comes to facilitating the melding of the cultures—and the teams between these two companies, who maybe haven’t talked as much as you, the leaders, have talked together in this process?
Kraig Guffey: I think it starts with being very honest. Between the two entities, do the two cultures match? Are they similar enough that it’s not going to be a big shift? That was key for us. With Benj being both the owner of Eyespeak and a partner in Syrup, we had some mutual cultural things that made that easier.
I think, in looking back on the Blink experience, is that was what didn’t happen. When you get acquired by a larger business or you try to merge a larger business with a smaller one, it’s very difficult for those cultures to be close enough that they can work together once the merge happens. My advice would simply be, be honest: If the two cultures of the two organizations are not close enough to bring them together, then you really shouldn’t do it because one culture is going to win and the people from the losing side are going to leave.
You are going to be faced with a situation of either hiring—finding more people—or the value you thought you were going to create by bringing these two things together won’t actually be there because half of them are gone.
Rob Kischuk: Blink was acquired by Gannett, which is a very large, very storied company with significant holdings in local television, radio, newspapers. They basically acquired Blink to understand social media and digital marketing and try to deploy that across what they were doing. Is that a fair—what they thought they were doing there?
Kraig Guffey: Yeah. absolutely.
Rob Kischuk: I think that’s a very tricky. You take this—I don’t know how old Gannett is, but it’s not five or six or eight or 10 years old the way that Blink was when it was acquired. How would you describe things then you’re talking about the compatibility of the cultures? How would you describe the cultures of Syrup and Eyespeak separately and now together as Syrup?
Kraig Guffey: Yes. We believe strongly in what we call fullness of our team. Our culture is based around that: that we believe strongly that. if you’re not taking care of yourself, if you don’t believe that you’re working towards bettering and becoming the fullest version of yourself, we’re not going to get the best out of you from the work side. That was something I believed in before meeting Benj and I saw that to be true in some of the other places I had worked. Benj had a well-established culture in Eyespeak with that fullness bucket.
It really starts where we care deeply and we hold our team accountable for their own personal fullness. Are you doing the things that are going to keep you healthy—mentally, physically, emotionally? Are you doing those because—if you’re out of whack there and we call that your capacity—if your capacity is limited because of the way you’re taking care of yourself, we’re going to get bad work or not efficient work from you. It’s a win-win to care about those. That was a thing we had in common that we very much have today.
Rob Kischuk: What has the growth path looked like since you put these companies together?
Kraig Guffey: When we merged the two businesses, things took off and in a way that, looking back, wasn’t healthy, because we weren’t prepared for it. What we did—and I think a lot of businesses do this—we were so growing fast that we were solving our growth problems with hiring people—just more people would help us absorb the amount of work that was coming in. It’s 2018 now, hard to believe, but in 2016, around mid-2016, we had four or five times the number of employees in the business in about a year-and-a-half. It was extreme growth.
We went through a period of time in 2016 where we lost a couple clients, because, as in the agency world, that happens. That put us in the situation where we were overstaffed. The growth pattern out of the gate was hot and fast and then in 2016 we had a dip. We were looking at the organization going, “Wow! We shouldn’t have solved these problems with people, we should have solved them with process.” We spent the next year figuring out the right size of this business to serve the market. Today, top line, we’re probably about the same as we were year over year, but at the end of the day, the business is incredibly more healthy across the board—because we ended up solving our growth problems with process and not people.
Rob Kischuk: I think it’s maybe worth digging a little bit more into process in a moment. Now I see where, if somebody goes to your site, and what you say as well—that Syrup focuses on small companies. One tension I often see in growing agencies serving small clients is they sometimes feel this need to increase their client minimum and pursue larger clients. How have you navigated that process and balanced that desire for growth with the desire to serve small businesses very well?
Kraig Guffey: Yeah. For us it comes down to our purpose—our “Why?” if you want to put it that way—that we love small businesses and we know they matter. That is more important than the size of Syrup. If we help one small company grow, we will achieve our mission, if we help 15 grow we’ll still be achieving our mission. If we help 100 and 1000 grow, we’re still going to serve our mission, but it starts there.
The good thing is that several of the partners in the business and myself—I’ve got experience working with big brands and I got burnt out. I never want to do it again—I get to sit here and a big driving force for me is that I know what that world is like. It is a very tasty, little carrot that is just dangling there, but I know that once you eat it what it feels like. For me personally, some people love it and that’s totally fine. For us, it’s in our core to love small companies. We have a visceral reaction to bigger opportunities because of some of the backgrounds that we’ve had. It keeps us honest with our mission. Everybody here in the company, when we bring them on we say “Here’s your rapport. You’re working for these types of businesses. If you’re for that, come join us.” That keeps us honest.
Rob Kischuk: It keeps you from, you almost may be there when an opportunity comes in that’s a little bit too big, probably get that bad taste in your mouth a little bit.
Kraig Guffey: This is what Jason, the president here at Syrup, is great at. He has instilled this into all of us and coached me a lot on when to say no and not to get swept up into these big opportunities. One of the things we did that I would advise other companies to do to keep you on track is, we develop strategic partners specifically for when companies come to us and they’re too small, so we already have strategic partners vetted that we can pass them along to.
Same thing with larger ones. Now, when an opportunity comes to us, we don’t have to decide, “Hey, is this for us or not?” or “Do we take it, do we stretch ourselves and really go outside of what we said we’d do.” No, it’s immediate. “You don’t fit our bucket. Go upstream or downstream and here are two names.” We developed that discipline and that keeps us from saying yes to things we shouldn’t.
Rob Kischuk: I hear in that another element—it’s another theme of process. Do you think overall that process is actually the tool that would allow you to scale up with smaller clients than maybe some people would feel comfortable or capable of scaling up and actually growing a business while serving that segment?
Kraig Guffey: Yeah. That’s exactly right. The very first question you asked—I don’t think I hit this part of it—but at Syrup when we’ve asked this question of ourselves, “What are we the best in the world at?” I truly believe we are the best in the world at developing and leveraging an efficient team and process. There are many people in the world that do design, do brand work, do marketing. That. I think we’re great at, I think we’re toe-to-toe with the best at the tactical level of doing things. Where I think we’re truly world class is sticking and developing processes and people that can do this style of work for this type of client.
These guys don’t have huge budgets—we have no room for fluff. But our experience brings with it a level and quality of work standard that, the only way to make that happen, is through process.
Rob Kischuk: You mentioned early on that you were an Infusionsoft® Partner, which even early on is a specialization. How would you encourage other agencies to think about certification as sometimes the tool and maybe some of the downsides of that?
Kraig Guffey: Yeah. I think that’s the exact way to look at it. When we started at Syrup, it was critical that we pick a tool and master it. Infusionsoft® was the one we picked, certified, went through their process, and said, “We’re going to plant our flag here.” What we learned though—and that worked for about a year—but, what we learned is that, just like in any technology space, it moves so fast. If you plant your flag into one software, you had better be sure that they’re going to keep up with everyone else. That was not our experience with Infusionsoft®. For the first year, they were the market leader and we were very confident in their tool and their platform. We planted the flag there and we said, “Hey if you’re going to work with Syrup, we’re going to bring Infusionsoft® to you. After about a year-and-a-half, other tools started creeping up: Active Campaign. Mail Chimp started rolling out automation features, things like that and it’s, “Okay, we need to not be tied to one place. Over the years, we’ve shifted to being very platform agnostic. We don’t have a set toolset that we bring into every client. What Infusionsoft® allowed us to do is—and I believe this is true of any digital medium that you master and I’m talking about master it deep—every other platform you touch is easier. If you are a generalist in 10, then they all require more work because you don’t really know any in-depth. But having gone deep in one, I tell folks that that year-and-a-half mastering Infusionsoft® and being really familiar with it allowed us to quickly adopt other tools because I often say, “They’re all the same—the button just looks different.”
That helped us, but it also required us to plant a flag early and then have the awareness to say, “Hey, now’s the time to back out of that all-in relationship with one platform and become more open to others.”
Rob Kischuk: That sounds like a really good lesson to share: about that specialization about going deep but then knowing when to pull back a little bit. What are a couple of other things that you’ve learned from your experience in building Syrup that you would do differently next time?
Kraig Guffey: I think the biggest thing that comes to mind I touched on was to be careful of solving problems by adding people and not process. That’s something we learned the hardest way. It affects every part of your business when you have too much staff and you have to do something about that.
That’s the greatest lesson I learned. I think the other lesson that I’ve learned, from a positive side, in watching other people I know start businesses, is it’s critical to know your partners as best you can before you get into a business with them. I hear very disappointing stories across the board . . . we just don’t have that. The partners in this business—I love. I’d start another business with them tomorrow. We’re lucky for that, but for that I’d say, “Take your time on choosing who you go into business with because, if you haven’t started one before, it’s a relationship like no other. It really is. Be careful on that front.”
Rob Kischuk: I think that’s great advice. In some ways, some people would say it’s actually harder to break up a business than a marriage—not that we should take any of that lightly, but it can get complicated, especially you get to the situations where it’s completely 50/50 down the pipe or one third, one third, one third. Those can all lead to weird . . . with one third partners, you have a two on one dynamic. With 50/50, if you disagree . . . what do you do sorts of things. You’re going to disagree but I think you’re saying you’re in a place where you can disagree well and you can be friends afterwards and I think comfortable partners.
Kraig Guffey: One thing I’ll actually throw out as a tip that helped us incredibly was: There are all kinds of methodologies of “how to run a business.” We’ve chosen this one and it’s been invaluable to our business: the EOS model called Traction. A lot of the listeners may have heard of it. If they haven’t, it’s certainly worth investigating. That model of how to run meetings, how to set accountability charts, roles, responsibilities. All the things that that process taught us eliminate much potential confusion and hard feelings. Everybody knows the role they’re playing. Meetings are structured in a way that’s healthy. It teaches you how to discuss issues and solve them versus throwing out a bunch of garbage. I would throw that out as a resource: EOS Traction. It changed our business and helped us operate in a way that sets us up for . . . no matter what size or scale we get, that won’t change. It will help us navigate whatever is thrown our way.
Rob Kischuk: That’s a tremendous system. EOS is definitely one of the things that I’ve heard is helpful. I think there’s another one. . . . Is it 40X? Is that the same . . . that’s a different thing, right?
Kraig Guffey: I’m not familiar with that, no.
Rob Kischuk: I think that’s another methodology that is similar. Now, one theme I hear because you’re serving small businesses, I think you perhaps avoid one of the traps that can befall an agency which is having too much revenue dependent on a single client. Talk about how you think about revenue diversification and that impact on the predictability of the business.
Kraig Guffey: Sure. That was one of my golden rules starting an agency. Every place I’d been, we had “Whale” clients—that is what we called them—we had the one, two, three clients that that made up 60 to 70% of your revenue. I have experienced losing two whales within 30 days in a business and seeing what happened then. I promised myself that I would never operate that way because of the stress and the risk involved. For us in the small company world, a lot of our processes and filters of who we’d like to work with eliminate some of that.
We started the business with that mentality. All four of our core products—brand messaging, visual identity and logo design, website builds, and marketing services—are fixed fee/fixed-price offerings. It doesn’t matter who you are. We know what it costs to do our work and I don’t care if you’re $10 million or a $60 million business. Your value to us and our value to you should be a pretty constant thing. We don’t get into the whale type of relationship. The only diversification we have internally is we have clients that buy one of our products and some that buy four. Our value exchange is really centered on which of the four they engage us with.
Rob Kischuk: You probably don’t over bet on any particular line of service and you probably also don’t over bet on any client. You probably also don’t over bet on a particular vertical industry either. Does that sound all right?
Kraig Guffey: That’s true. We have a pretty even distribution of what I call brand work or clarity work and marketing services work. That’s very healthy. It ebbs and flows, but over the year, it balances out to 50/50. The vertical thing is something that actually over the last two years—we don’t verticalize in one but I would say we focused on three that have allowed us some diversity. The way that we look at it is we don’t want to go deep into a particular niche that relies solely on disposable income. You need to be wise in the small company space to find that some of these businesses are healthy—they’re always in need of the market—and then also some that aren’t. No one single vertical, but we have we said “Hey, three, we know we’re really, really good at. An effective four and we spent a lot of effort there.
Rob Kischuk: What are those three? If you don’t mind me asking.
Kraig Guffey: Yeah. The three are the home service industry: lawn care, pest control—anything that has to do with servicing a home. We love the people behind those businesses and we love the services that they offer. Two: A lot of my background is an e-com retail. We love those types of businesses. If you’re selling something online. The third is multi-location. If you’re running a brick and mortar of any kind and you have more than three locations, we like working in that space too.
Rob Kischuk: Got it. What are you excited about that’s coming up for Syrup or even perhaps the broader future of marketing?
Kraig Guffey: I think the environment that we all live in now, you have to be very honest or you’re going to get called out. I actually love that as a marketer because I remember at Blink, we were some of the first people doing big scale buys on Facebook. I remember reading this study listing the top five most-hated professions in the world. The marketer was in the top five with attorneys and other things like that. I was like, “Man, we have a real opportunity here to change that because, if people will do the right thing, we can take a message and only show it to people that it actually makes sense for.”
It’s taken a long time and there’s been some abuse and there’s abuse happening right now is that data. Just like all things: Operated with a good mindset, it’s very valuable. With a negative one, that’s never going to go away. What I’m excited about though is that transparency is coming. People that aren’t using it the right way are going to get called out and the people that are, that say, “Hey, look we’re going to be honest about the product and service that we have. We’re going to be honest about how we go about getting in front of the customer.” All those things are valuable to humanity because advertising is never going to go away.
The better and closer we can get to some transparency and honesty, I think the better we’ll all be and that’s happening now. I’m pretty excited about that.
Rob Kischuk: It is exciting. There certainly is a lot of attention on it right now and then you were certainly at Blink on the forefront of Facebook advertising. I think Blink was one of two companies in Atlanta that had access to run Facebook ads.
Kraig Guffey: On their API.
Rob Kischuk: Which was pretty distinctive. One bit of guidance I tend to give people on these platforms is there’s always a gray area that you can operate in. I encourage people to avoid it because it’s going to be the first thing to go away. Then, there’s going to be a new gray area that . . . you may realize—even if you avoid the gray area, you may end up in the gray area. You have to keep taking steps away from the edge of that cliff or, in my experience, you’re going to get burned.
Kraig Guffey: The way I frame it too is make sure, as a marketer, you dedicate time to not think like one. You have to remember I mean it and we’re in it every day. I have on my calendar, we call them clarity breaks but 30 minutes, all I can do is have a piece of paper and I start by going, “Hey, Kraig remember you’re a human. You buy things like any other consumer buys things. Whatever you are about to think about, think like that person not like the person that knows all these tricks and trades of being a marketer.” I would encourage people to try that out.
Rob Kischuk: I like that thinking—to think like a human, not like a marketer, not like a technician. Absolutely. Kraig, when someone wants to get in touch with you and with Syrup, how can they find you?
Kraig Guffey: They can read about us and check out some of the work that we do at syrupmarketing.com. They’re more than welcome to send me an email Kraig with a K @syrupmarketing.com. That would be probably the two best ways.
Rob Kischuk: That’s good. I think we’ve got some good guidance on the type of business you work with, the vertical markets. I think that’s super helpful. I think we’ve also got some wisdom for building an agency, for joining up with partners, and handling growth. Thank you for sharing a lot of that wisdom. It’s been great to get it. Thanks much Kraig, take care.
Kraig Guffey: Bye.
Rob Kischuk: Thank you for listening. The Marketing Agency Leadership podcast was presented by onverge. 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 email@example.com or visit us on the web at convergehq.com.