Initiative: Main Street Digital agency services
Key Executive: Mark Lane, VP of Sales, Morris Publishing Group
Company: Morris Publishing Group
Summary: Morris Publishing Group is one of the more progressive local media companies. The family-owned group is an intelligent risk-taker; they started Morris Digital Works in the early 1990's, and by 2012, had partnered with LocalEdge to launch a separate digital services agency, Main Street Digital.
This report looks at the experience, metrics and lessons learned from the first two years of the agency, which has grown more than ten fold in annual sales and a retention rate of 98% month over month.
"The key to market share growth is long contracts with high retention that compound and mature" into other up-market purchases, says Mark Lane, VP of Sales.
“In our strategy the goal is so simple: To acquire, retain and grow our customer base...We do it day by day, week by week and month by month. Even if it’s a $300 a month sale, if we retain that business, we grow the base. It is our bet and our vision."
He foresees doubling or tripling the sales team in the future, as the organization solidifies.
"We’re not in it for a few million dollars.”
Here are lessons learned from the last two years, as well as key tenets of Main Street Digital's 2014 digital agency strategy:
1. Personnel and reporting separated
The digital agency organization is run separately with a few areas of overlap.
Main Street Digital has its own P&L, support staff and sales team, which report directly to Lane, the corporate VP of sales.
The core sales team also sells all digital products, so, originally, the agency’s sales managers reported to the publishers with a dotted line to the GM of the agency. That changed in 2013.
Today, the sales managers all report directly to the GM of the agency who reports to the VP of Sales and to the Main Street Digital Board, with a strong dotted line to the publishers.
Besides the VP of Sales, that governing board includes the Executive VP of Morris Publishing Group, Director of Strategy for Morris Communications, and the Executive VP of Digital.
But the key element here, is that digital sellers are primarily accountable to a GM, with a separate direct line to the company corporate VP, and also to the publisher. The separate reporting line allows strategies to be developed around goals uniquely tied to digital services.
2. Sales organization honed to a tighter, more horizontal structure
The agency originally launched with "too many managers" and sales reps, a total group of 25. Winnowing them down has left a stronger selling team of about 10, including a smaller set of digital managers.
“We feel it is better to have 10 to 15 really good sales reps rather than 30 who are just ok. The productivity is better, the cash flow is better and there is less churn,” Lane said.
3. The key fulfillment partner is LocalEdge, but customer interaction stays inhouse
A partnership with LocalEdge helped the group scale quickly. LocalEdge does not deal directly with customers however. Instead an inhouse customer support team is directly responsible for all the customer interactions.
Inhouse staff also handle buys on ad networks Dataxu and Simpl.fi, and two staff members handle SEO/SEM full-time.
4. Re-organizing the sales team so that it is clearly split between market-based business acquisition reps and a centralized customer support team
The most important organizational change was splitting the sales team into centralized customer service that deals directly with customers and is focused on retention, and market-based business acquisition reps who are responsible only for sales (this concept has been so successfuly that the print/television side is now incorporating some of these elements).
5. Developing market-based hunters without desks
Unlike the print team, the Main Street outside sellers are based in the field - not the office. They literally don’t have a desk at the media company and work "out of home, car or Starbucks."
Reps receive company-supplied technology including mobile phone, tablets, laptops, and software such as Bloomfire to participate in training remotely; Box, a Google docs-like platform that allows file sharing; and Admall Pro’s CRM equipped with Borrell Industry data.
A key to the sales management is that reps keep "everything in the (Sugar-based) CRM. If it’s not the CRM, it never happened," Lane says.
“All they do is make new calls to acquire customers,” Land says.
Every market has at least one sales representative, with larger markets having more - Jacksonville and Augusta have three each, Savannah has two.
Digital sellers can sell anything digital - both ads and services. However, contracts must be annual. “We do not record it as new if it is less than three months.”
There are a few large customers handled by a couple of the digital reps who pend $1,500 to $20,000 a month, mostly SEM. But this is not a typical sale.
Most customers are SMB’s in the $400 to $500 a month range.
The key metric and goal for outside reps is four sales of $400 a month on annual contracts with a credit card secured. In reality the reps typically average 2 to 3. But, if after a few months, a rep does not make the minimum of two, “They can't work for company.”
The agency is succeeding with annual contracts and a retention of 98% (see tips for this kind of success rate here). So while sales are currently smaller in size, after two to three years, a rep can carry $24,000 month, or $280,000 a year, in business.
“$280,000 a year is high for a digital only rep. If you add in display too, then that’s a very realistic number. For a digital rep on a good run it can take about two years, selling 2 to 3 contracts a month, it tends to compound and add-up.”
Lane expects new first year reps to be tracking on a run rate of about $240,000 by the end of the year. They are still looking for ways to improve this productivity.
“I’m not not happy yet with the acquisition strategy. Across the 5 to 6 markets standards are not always met. We think 20 to 25 (sales for the whole team of ten) is very realistic."
Reps are paid monthy on billings and receive a 90 day guarantee.
“If you only pay on acquisiiton, they may start overpromising,” to customers to get the sale.
Training is handled by sales managers and regional sales leadership, which is within two hours of every market. The Leadership and Development team in Augusta trains using a tool call Bloomfire, that allows tutorial videos and testing.
Finally, there are Lane's daily thank you notes:
"Every day, I send every rep in the company a personalized email thanking them for the previous days sales logged in the CRM. We only log longer term agreements and I only send thank you's for those agreements."
A new telesales arm in sales are making micro-sales in the $165 a month range, with a minimum of 12 months.
"This is an important, under-served market," Lane says.
6. Customer support trained to retain
As mentioned above, the real key to success at Morris may be its stellar 98% retention rate.
“We are extremely bullish on the customer service and ROI for the customer,” Lane says. “Retention is as important or more important than acquisitions.”
“A lot of people in the space have figured out acquisition but have fallen off on retention."
The 7 or 8 client service managers also service clients that the core newspaper reps sell… anyone that has a digital services program.
In terms of metrics - that's an average of 75 customers per suppport person, although they are not directly distributed that way, as some reps work on just one area, such as copywriting, or SEO and SEM, for all accounts.
The number of customer service manager to the number of sales reps is an almost 1/1 ratio - it currently stands at 9/10. Something to think about when staffing for customer retention.
Besides adequate staffing, the team is trained to provide "beyond over the top service” based on the customer experience and ROI. (See 8 rules to obtaining a 98% retention rate for digital services here)
The all important hand-off from the sales rep to the Customer Service Manager (CSM) is carefully managed.
"We call it a warm hand off and the CSM is brought in early. It is well communicated with the customer on the front side. It is a major selling proposition that the customer will get the white glove treatment after the sale," Lane said.
"Their job is to kill that customer with kindness."
7. Tracking and optimization built into every program
Customer service is not just about understanding goals and being flexible and attentive.
"ROI is the number one goal for retaining our customers. In short, if they win, we win. It's about that simple."
But in order to gauge ROI, the company needed adequate tracking.
When Morris originally launched SOLOMO in July, 2010, they sold and set up 30 new accounts without back-end tracking tools.
“We lost all of the accounts. We didn't have the backend reporting tools or a single sign-on dashboard.”
Today LocalEdge’s ClickFuel dashboard is white-labeled for MainStreet and can be accessed by the rep, support team and the customer. This allows support staff to optimize and make suggestions in a timely manner.
“They talk to customers weekly, to advise them ‘we think we need to do more of this, less of this.’
“The frequency and type of communication depends on the customers, some want an email or text, or phone call. It’s the client service manager's job to understand."
“Let’s face it, there are a lot of players out there. When we talk to customers about ‘why us’ we say that one, we are local, and, two, they are not going to get the same kind of personal attention (from a competitor)."
• “We’ve learned in the school of hard knocks that this is very, very hard.
You can get things wrong more than right. So it is important to stay flexible and patient.
"This industry tends to hang on to things too long because of pride or ego. In this space one needs to be patient (with multiple changes) but ask for a high level of accountability."
• Expect a full agency launch to be profitable in two years.
“You can invest a lot in the first two years…you could nickel and dime (the investment) but we jumped in. We have a phenomenal owner. Mr. Morris loves this space, loves learning and has allowed us to make this investment in our future.”
But not-playing in the digital services space also has a cost. "If you do not work in this space you will continue to lose market share to Reach Local and to Yodel. What you will learn will also make you better. Your customers are spending money on digital marketing."
• High rep turn-over is still the #1 challenge.
• 75% of customers are buying a web site.
"What's cool is that building websites and hosting is a hook. You've got a relationship as long as you do a great job."
"If you have a really good retention strategy ...we think there is potential, but it is high risk. It's very competitively priced."
• Programmatic buying is newer, and showing big potential.
"We have two or three very large live campaigns, in mutliple markets outside ours, which are marketed with very targeted display, and a lot of SEM."
• The biggest take away was the understanding of how to restructure the print sales team to look more like Main Street Media.
"We are moving towards having a group focused on acquisitions and a group focused on retention. At Main Street we have solved the retention, the biggest problem that media has, whether they know it or not. Main Street has the opposite problem."
Many thanks to Mark Lane, VP of Sales, Morris Publishing Group, for sharing his experience and expertise with us.