Max Traylor Marketing Blog

Joseph McElroy on Agency Business Models and the Importance of Clients Owning Strategy Internally

Written by Max Traylor | Oct 2, 2019 12:22:29 PM
What can I say: he doesn't regurgitate the agency training chants of big mar-tech software. He knows a thing or two about the dangers of the popularized retainer business model, and he explains why helping clients bring strategy in-house and enable the freelance gig network to do their "dirty work" is the way to go. So grab a beer and listen up!
 
"Clients actually like the way we get things done, they fail when they don't own strategy internally".
-Joseph McElroy
 

Joseph McElroy is a technology, inbound marketing, and search engine optimization expert who understands it takes much more than “words” to enhance a brand. It takes wise words, wise content. Joseph possesses the depth that allows him to live and breathe a brand, and realizes the emotional and psychological elements of marketing. Joseph’s experience with big-data tools, seo strategy and implementation, and all the ins and outs of wise content development have brought him in contact with some of the top brands in the world.

www.GalileoTechMedia.com

 

Max: Welcome back. I'm very excited for this episode of Beers with Max. I'm drinking an exhibit A, Goody Two Shoes. So I get to treat myself today. My guest, Joseph McElroy doesn't know that sometimes I really screw up and I have to go into my wife's stock of beer and I have to drink things like Bud Light and I'm ashamed. Today I'm a superstar just for Joseph. Joseph, what are you drinking today?

Joseph: I just got a, a nice Harpoon IPA.

Max: Oh, perfect. We're going to get along great. And what do you do professionally, Joseph?

Joseph: I dance.

Max: Excellent.

Joseph: No, I, uh, I have a marketing company called Galileo Tech Media that focuses in the travel real estate space, multi location businesses. Um, I also have a motel, but that's not what we're here to talk about.

Max: It could very quickly become what we talk about. I don't know, that's kind of a dance in and of itself, right?

Joseph: Oh yeah. And then my wife has a travel agency, so we're really, yeah, we have a lot of things going on in the travel space. So yeah, we focus in on, the Galileo Tech Media focuses on SEO for multi-location businesses and that tends to be travel because there's a lot of different locations and they have to get people there. So, uh, we ended up having a nice big vertical in, uh, travel. There's some big clients there like Marriott and Wyndham Resorts. So, uh, we're doing all right.

Max: Um, where do we start? Like how did you get into doing just SEO? Did you go through periods of having more services? How did you pick travel?

Joseph: Well, this is the thing. I um, I mean, uh, it's sort of a good story, a little bit sad is that I had an agency and uh, I'm in New York City in Manhattan and I had an agency here for a long time, um, and was doing, you know, your general agency stuff websites, you know, uh, paid marketing. You know, we did a lot of SEO at the time too. And I actually became, I became pretty good, well known for SEO, uh, cause I had a knack for it. And then, you know, I built the agency up, but I had a partner who was also my wife and she got cancer and died. So during that, I tried to solve, I tried to cure cancer and you know, it was a fairly tragic time. And then after that I had to do something with my life, right.

Joseph: And, you know, spend a little time recovering. And then I realized I didn't want to be in an office anymore. Now life's too short. All right. As you know, we don't need to be suffering through days of, in prison. So I formed the Galileo Tech Media actually without much in the way of idea other than while I was serving in the general space of what I knew what to do. Cause I'm also a technology expert and, um, and Galileo you know, was in prison in his life for being a proponent of freedom of inquiry. Right? So freedom was sort of the primary word there. And I also remember back to when, I was trying to think back to when I actually had a lot of fun in business. I mean, just a lot of fun, right? And I actually, back in the 90s, I have a little bit of a wild side to me and I decided to quit IBM and go to art school. All right. And I was a big programmer with IBM then. I'd been there for seven, eight years. I was, you know, I was on the fast track and just got burned out. It seems like, and maybe there's a quirk of my personality, but I get burned out and being in offices and I wanted to do something creative and different. So. . .

Max: I think everyone gets burned out. Joseph is whether or not they do something different.

Joseph: So, um, I went to art school and that was, I had to, I ended up getting married to an actress and having this baby, soI had to make money again. All right. So I formed a little consulting company, but I did it differently, that nobody else was doing back then. I tooled around in, uh, when I was living in Philadelphia, on a bicycle with one of the early laptops and one of those Star Trek phones. And I, you know, I did consulting services, but I didn't like the whole hourly thing, you know, what's the price of an hour? I didn't, you know, I didn't know what the price was, it was like, to me my time is priceless. So why am I putting a price on it? So I would sell by the function for programming, right?

Joseph: So I would say, you know, this will take, you know, this will be, you know, 500 bucks and this will be a thousand, you know, and I got some pretty decent sized clients that, you know, those kind of numbers sound good to. So I was going full time to art school and making six figures tooling around with a bicycle and a laptop and I was having a blast. All right. So, uh, I remembered that after this. And I said, well, you know, I want to get out of this whole hourly rate, hourly retainer. You know, cause when I moved to New York, the gray hairs at the time told me, oh, you can't do that kind of business model, you gotta do this. You know what I mean?

Max: What was the "this" that they told you to do?

Joseph: Well, you got to do retainers. You gotta do, you gotta get predictable income streams. You've got to build up the infrastructure so that you have security and some stability and all. . .

Max: So a random conspiracy theory. Were those people that you were referring to, did they work for software companies?

Joseph: Yes. Software companies and agencies. Yeah, yeah.

Max: Yeah. Cause the software companies need armies of button pushers that push buttons on retainer so that people don't cancel their software. It's, you know, it's right there. It makes sense. Okay. Anyway, conspiracy theory solved.

Joseph: So that was, you know, I changed that model when I moved to New York and got into this whole thing and then I did a dotcom, you know, yada, yada yada. So anyway, um, Galileo was formed with the idea of being freedom. I said, well, I'm gonna pursue that model I really enjoyed, which is a per piece price, per function pricing. And you know, I was going, I started out, I was going to do SEO in technology, but you know, I put up a site and you know, I said, well, what vertical do I really like? And I like travel, right? I said, this is, you know, I'd done a little bit, uh, I was interested in traveling. So I put up a page with travel SEO as being a travel SEO and the thing to do that. And uh, and we started, uh, started selling and I had somebody that was partnering with me for a little while that actually had some connections and they actually found her through the travel SEO site and they were Marriott and Marriott started working with us.

Joseph: And basically what they did at first was put us on, you know, okay, do some pieces of SEO content and you know, and this, this partner I had was working 24 hours a day doing this content. And I used some of my technology background to break it up into what I call pipelining to make it more efficient. So each piece of work could be an equal amount of time. So doing the keyword research, doing the content titles, doing the content. So then doing the, you know, the optimization, that page, I broke it up into a process that then I could have different people doing it. And then this partner didn't have to work 24 hours a day. And it was, it was highly efficient, time efficient. We actually could make it work. I think something like, you know, uh, you know, you can get the work done a little bit faster with it, you know, with about the same amount of man hours.

Joseph: And so we started getting more business. So we really built to built the business around this model of, you know, distributed work, um, using, highly effective people that have a desire for flexibility in their life and don't want to work on a time clock. So everybody that works for Galileo has this agency caliber, works really flexible hours, most of them are parents, but some are traveling, some are taking care of elderly parents. They have different needs for flexibility. And you know, so we ended up building a network of about 75 - 80 people that are, you know, highly qualified. And we do, you know, now we do vast volumes of work but do it all the same way, distributed multiple people working on it. You know, somebody's, you know, taking care of sick kids, I mean somebody else can take care of it.

Joseph: And, uh, you know, we built this, this model. Now as I was getting into this model, I started doing research on business models and you know, reading about the gig economy, reading about the freelance network. And you realize it's a huge growing, you know, enterprise. Now they talk about the share economy, gig economy and how it's going to die, but, or there's problems with it. But they're really talking about things like Uber drivers and you know, and you know, there's gonna be a lot of laws and regulations in there, but you know, highly skilled and highly expensive professionals, it's going to be a different thing. It's going to be, you know, more and more people we'll find working at home, coming in from the pool, doing a podcast and then going back outside of the pool with their kid as a much more desirable way of living. Right?

Max: I don't know who you were talking about Joseph. I'm not, I'm not that guy. Come in from the pool to drink a beer to go back out to the pool and finish your work. Yeah.

Joseph: So, and I think that, uh, you know, the agency model of having these big infrastructures, you know, you've got to put your hand around a lot of people that you can say are geniuses, right? So that you can control and you can sic those geniuses on some problem for some big corporation. I think it's dying. I think it's a hard model anymore. I mean, I don't think you can keep the geniuses around for more than two years. You know, they get a bunch of young people, they train them, they get them being the geniuses and then they say, oh, I'm going to set up my own shingle. I can set up my own shop really quick. Right.?You lose the geniuses like that.

Max: Yeah. Or, or a software company down the street poaches them. Cause they can pay him four times as much because they don't care about profit margins. They're based off of growth. But hold on, let me process. There's so many things. The first thing I heard that I want to ask you about is, you know, in all of your travels and talking to people, do you meet a lot of other folks that takes the approach to business of, let me think about what I enjoy doing? Let me think about what I want my life to be like and then build a business around that.

Joseph: You know, I think that that's starting to happen a lot more. I think especially younger people, right? They don't have a, they have more flexibility of what life work, you know, how they're supposed to identify themselves. Right? There's a, there's a fluidity and flexibility and the millennials and Gen Z that seems to be that, I think that's going to be the standard way of thinking about how to build your business or career around what your purpose is, what your happiness is. Right? They talk about the purpose economy and you know, like your business has to have a purpose for millennials to be interested in it. Right? So I think, I think that that concept of building your business and your career around what makes you happy and what fulfills you is going to be the norm. I think that's going to become more of the norm.

Max: You've got a lot of, uh, insight and opinions on, and you know, I want to separate the consulting side or the selling of knowledge from implementation because when you were describing your model of distributed labor and embracing these brilliant people that are never going to work for anybody full time and you know, for the rest of their life, but when you described that model, that's really the implementation of content services. It's the doing of the work. And so, yeah, but you've got some other insights as to what's happening on that implementation side of the business. I read an article of yours, the agency model is dead and I thought, man, I gotta have a beer with this guy. Um, so, you know, I'm kinda talking, yeah, gig economy is one of them. Um, but also, you know, these trends of seeing companies, and the large agencies that previously did not have access to the right talent and couldn't do this work themselves, which was the, you know, the first ingredients that created this bubble of specialized labor, these inbound marketing, these full service agencies that are, you know, less than 10 people. But now, you know, is what you're seeing that these people are, you know, taking the work in-house? Like what other things are you seeing?

Joseph: Well, you know, I don't know. You know, the most recent statistic I said is now that 58% of the fortune 500 have internal agencies. Right? And it's growing, right? Um, you know, one of the things that we talked about, which is very important, I think a very important thing is that, you know, companies really at this point, need to own a lot more of what they do for their marketing than they used to. You know, SEO search, their search position has to be just something that they own. You know, their content has to be something that they own because it's intellectual, it's their intellectual drive. It's the content that's coming from what they do. They know it better than anybody else. An agency's not gonna know it as well as them, so they have to own this internally. Right? So strategy I think has to become a core component. Um, you know, especially that inbound strategy just become an internal component in every company, they have to become almost, um, mini publishers themselves. And then, you know, if they have a small team that focuses in on the strategy, then outsourcing it to tactics, smart tactical implementation is the most cost effective way to do it. All right. Yeah, because they can't. . . what is the career path for a graphic designer in a soup company? All right. It's not really far, right? Right?

Max: From chicken to beef.

Joseph: Yeah. So, so the career path for the strategists can be all the way to the top, but a career path for somebody that loves the tactical execution and does it really well, the career path is not there, right? So, uh, we ended up having to outsource it, right? They need that. They have to outsource it. They have to manage, you know, freelancers, they have to do that. But managing freelancers is like herding cats, right? So that's where people like Galileo Tech Media steps in and says, listen, we're willing to take the risk of the freelancers disappearing because we're going to do this across multiple companies and when you don't anything to do, there'll be somebody else that has something to do and we'll just keep freelancers around because we give them work from others. All right? So we're taking that risk and that willingness to take the risk gives us that profit margin that we're making.

Max: Well, I've got two theories on, you know, freelancers disappearing. Yeah. Um, one theory is that you can, you know, create a great relationship with these freelancers and they're not gonna disappear. And because you, you know what you're describing, you provide an environment where you're providing business for them and they don't disappear. The other mindset is, well, they're going to disappear no matter what you do. So the goal is to create, uh, documentation to create process to create a system within the organization that they own that makes the freelancers interchangeable. Obviously you can't lose somebody one day and pick somebody up tomorrow. But to the extent that you can create a system that, you know, much like in the industrial revolution, you could get somebody to be number five on the assembly line really quickly. You'd still have to train them how to play the role of number five on the assembly line. But it's not like you had to teach somebody how to build a car.

Joseph: Well, that's exactly right. I mean, that's exactly right. I mean, that is the pipelining method I was talking about. I mean, it's the same thing as saying, you know, you break the task up into executable parts, right? And ideally you try to make each of the parts be a similar amount of time, right? So then it can be architecturally efficient in terms of getting things through there because you can start multiple ones, you know, at the same time, you know, and then pass it off quicker. And there's things that make it more effective in terms of getting, you know, the same amount of, same amount of man hours producing more work. But it's all a factory, an assembly line. So an organization, you know, they don't necessarily have to do the, that tactical execution, you know, because if they hire a company like us, we'll do that for them. But they could do the same thing internally if they wanted to. The problem is that they don't have the way to offset the labor. You know, if it's a dull time and then the freelancers are sitting around doing nothing and they need to make money. Right. So that's why, you know, that's where they would work with companies that have multiple clients so that, you know, they can have some security that people will stay around.

Max: Yeah. Um, do you find, so you, you are, it seems a part of your positioning, part of the, your pitch, part of the unique way that you provide value to your clients to educate them on this freelance gig network and the keys to making use of them as compared to the people that you might compete against. Trying to argue that the four people they have between their walls, you know, and, and the bills they pay for their office are the way to go. So do you find clients like they, they feel like they've found somebody that's actually telling them the truth. Is it, you know, how much have you embraced that as part of your positioning, to say, look, we're going to help you. We're going to help you make use of the freelancers. Cause a lot of people listening to this might say, well, my clients would never agree to that. They want, you know, they want all the people in between our walls. You know what I mean? They wouldn't get it.

Joseph: I don't get too much of that kind of pushback, right. In terms of how we get things done. People actually get excited by the concept of how we get it done. Where it fails sometimes is that the company doesn't own the strategy in their inside. So they, you know, they get to the point to say, okay, let's, let's start this, let's execute it, but what are we going to execute? We want SEO, right? So, you know, I'm having to develop what I'm developing now cause we work really with people that are smart and have their ducks a row and have strategy developed. Where we've had a little, you know, little pushback is where the people don't really know internally. So what I'm doing is developing standard protocols, standard machines that need to be executed for particular verticals and particular types of businesses like multi destination businesses, multi location businesses, multi-product businesses, you know, I have a B2B model, right? And I developed for an accounts payable software and it's working really well for them. So it's a model I can just give them. I can say, this works here, this is your, this is your strategic model now. Now you fill in the creative bits. You know, maybe you have a branding agency that helps you a little bit and we can actually give you some advice on the creative bits and your knowledge bits. All right. Then once it's filled in, then we're just gonna execute it like a machine, boom. Right? So that, that is working well. All right. It took me a little while to get to that point but it's working well now

Max: I feel the little hairs on the back of my neck standing up. That's the stuff. I want to know more. Like for those standard protocols? The action plans, uh, I don't know if you would use the word strategy, but I don't want to put words in your mouth. How do you charge for that and where do you see that part of the business evolving to?

Joseph: Well, right now because what I'm developing these and then putting them out there and by speaking about them and putting them, I'm going to be putting blog posts up and articles about that. Right? I'm sort of giving it away. All right. I'm sort of giving it away. I'm going to hand it off to the potential clients. Where we would charge is, again, we say, well, if you need this piece filled in like, you know, you need to know what is your customer profile? You know, you've got to know who your target customer is. All right, well we can charge for that. We can help fill in some of those blanks. I have people in my freelance network that are very great at doing that. Different kinds of things. I could do it, but I don't have the time. But I can make sure the right people in place to help them execute it. And again, it can be a freelance model. There's plenty of people that are strategists that you can also bring in as freelancers. I can fill in those models and educate you internally. Right? My goal is to educate internally, get the people, get the company itself to understand what they're going to be doing, own the strategy so that they get to the point where they can measure it themselves, they can understand where it needs to go and they can understand and have some ability to participate in evolving the strategy. Right? So they can feel real comfortable that this is something that works and is working for them and is organically part of their DNA.

Max: Yeah. Well, I mean, to an innocent bystander drinking an exhibit A Goody Two Shoes, that sounds like the most valuable contribution that these systems and, you know, I wonder what the implications are of giving it away and you know, not charging for it because it seems to me that it took a lifetime to put together these systems and if what you believe is the most valuable is for a client to be able to internalize these things, and that requires not only the systems but the change management and the education as a consultant would, not charging for that seems. . .

Joseph: Well when you have a sort of a basic schema, a basic strategy, you know, it has to be brought into an organization, then it has to be modified to fit that organizations and the specifics, right? That would be a service that we sell. We did that, you know, a couple of times already. And it is, you know, it's a fairly hefty price, right? But it's, you know, it is valuable for them. But the goal, again, is not to be this internal consulting company, you know, that has all the knowledge. The goal is to educate them and get them to own the strategy. And then, you know, then we, we provide the tactical execution on a long-term basis. Because if we have to always own their strategy, then, frankly I have to always be involved, right? And, you know, I can only do so many clients. I can only be involved, you know, then I have to hire other, you know, permanent, really smart people that contain, and own that knowledge, you know, ownership is permanent, right? You know, so that's why you want the company to own it all, right? Because once you own it, you gotta be around forever and then you gotta build up support in case, and you've gotta have other people on your staff that own it forever. You know, you gotta build the institutional knowledge and all these things. And while we do end up building some institutional knowledge because of the tactical execution and learning their processes and everything else, you know, it's fairly straightforward on knowledge. You know, we do videos and we give training. We create lots of training and resources to keep constantly being able to teach them, and new freelancers then come on. But yeah, it's actually a discussion we're having internally about, you know, how much to give away of strategy, how much to sell, how to package it, but at the same time to stay true to our model of having freedom, being a core concept, a core principle of our company.

Max: So what's next for these standard protocols or what, I mean, that's, that's obviously the next thing that you know, you're working on.

Joseph: That's exactly what I'm working on.

Max: Yeah. So what's the, what's the road map of that? Like what's the, do you have an end game? Obviously, you know, you're not going to be sacrificing your personal life to build this business. So, what's the plan?

Joseph: I'm looking at a couple. One thing is we, we decided SEO has become, um, so there's a couple of things going on. One is SEO has become where you have to have brand mentions, right? It's not just links anymore. I mean you have to do what your site does and you have to build all sorts of internal quality and the, but you also have to still have external validation. And it used to be links was the pure form of that. And then there was other things, social media buzz, stuff like that. Well brand mentions have become an important part of authority externally and we think that's going to continue to grow. I think that, you know, that the search engines are becoming more and more proficient at deciding who is an important brand and who is not, right?

Joseph: So that means that, you know, I've been sitting around, using SEO and basically hobnobbing and that's how I built my business. Right? I haven't had to try to do anything to build a brand. I never really worried about building a brand because I get my clients online or through, you know, a network, I would handshake it. But now SEO is going to require a brand. So I'm having to build a brand. The reason I'm talking to you is to help build my brand, help actually help with my SEO. Alright? Yep.

Max: A brand mention is that's important.

Joseph: Brand mention exactly. Say Galileo Tech Media two times please. So that is, you know, so the content you're discussing, this needs protocols, are going to be things I talk about and present, right? I was just at NatchCom, which is a natural foods industry thing. And I introduced one there for a multi-product, you know, and it was a really good, well-received and got a lot of people talking, and some clients. So it's a good lead. It's a good way to present, you know, to present our intellectual knowledge and get attention. Right? So it's great content that we think could be great for getting links, getting mentions, getting speaking engagements. So, you know and naturally fill up our brand. So that's one way to see it, see how we're going to leverage the value of it, is building that. And then the other is, well, you know, every strategy has to be modified. No strategy survives the battle once, you know, survives the war once it hits the battleground, right? So every one's going to have to be modified, you know, when we get into a client so there's an opportunity also to, to get more value. We got something that they can at least hang their hat on and then we can modify it to fit them. And working in collaboration and give them value because then they will own their version of it. Right?

Max: Yeah, I really appreciate the insight of really getting it's time to have clients own their own strategy. To really have control of what's going on and sure bring in, you know, embrace the gig network for these replaceable implementation tasks because with management they can be utilized, you can get them to follow directions, you know, aside from the popular dismissal of the freelance gig network. Well you can't get them to doing anything. They're flaky, you know, that's just ludicrous. That's people like trying to get a quick, you know, quick job without actually training somebody. Anyway. So those two things are my big takeaways. Getting the client organization to own the strategy and what opportunities are there to instill some protocols as you describe it, to customize it for that organization. I think there's a lot of opportunity to charge for that and use it for some unique positioning. But that's for another conversation. And then on the implementation side, just embracing and coming up with systems to utilize the biggest market force out there, the freelance gig network, it's only growing. People are going to stop driving into their jobs and they're gonna take on freelance gigs. The Bureau of Labor statistics is calling it the industrial revolution of our time. Back to that, you know, the assembly line analogy.

Joseph: There's like 30 billion freelancers now and growing. It's, you know, I mean, there's been recent pushback against the gig economy but it really is coming from, you know, the low wage gig economy.

Max: Just out of college. You know, we don't have a job yet, so we're hanging our hat. But that's not really where the value is, is it? It's people that have full careers and they're going, I gotta take care of somebody or I got sick and you know, now I'm available to do my special thing remotely.

Joseph: And how often does somebody need a brand expert to come in? You know, they don't need to hire a brand expert, the brand expert designs the brand. They need to be leveraged across a lot of different clients, and they can either do that as part of a big branding agency or if they're really smart, they can do it on their own, to make more money. Yeah. And you know that when you're an LLC, you know, tax laws benefit you now. There's just so many financial benefits to be your own company, right? My opinion is everybody in the United States should be their own LLC. They'd be treated better.

Max: Say that again.

Joseph: Everybody, every person United States should be their own LLC. They'll be treated better by tax laws, by other companies. I mean, it's just, you know, companies are treated better than people.

Max: Hmm. I like that. We'll end with this then Joseph, if you could go back three years in time and give yourself one piece of advice, what would it be?

Joseph: Three years in time?

Max: Three years.

Joseph: Three years in time.

Max: You can make it four if you want, the point of the question. . .

Joseph: Don't, you know, I have had a problem sometimes hiring some very smart people, but who are very inflexible in the old economy and can't break out of an agency, time-based model. And for me the biggest advice I give is not invest in the people that can't break out of that mentality. Right? And I don't know yet how to really determine that and I'm working on that. Well, the, I guess the point is the people that are self-motivated, self-organized, self-determined, self-propelled, they don't want jobs. Yeah. But the problem is, that there's still a lot of freelancers that have been doing this for a long time and they're really caught up in a time-based model that they've done for ages, you know, and it doesn't work in what we're doing. Right. Yeah.

Max: Got it. Well, excuse me, I've enjoyed my beer. I enjoyed the conversation. Did you like your, I mean it's a trick question. Harpoon IPA is delicious so I won't even ask. How do people check out more of what you're doing? Where can we find it?

Joseph: Go to GalileoTechMedia.com.

Max: Say it again for Google.

Joseph: Galileo Tech Media dot com.

Max: And for those of you listening to the show get out there. Enjoy it. It's beautiful out. And, go ahead and binge on Beers with Max. You deserve it and see you next time.