The Secret to Keeping Clients for Over 20 Years with Pinaki Kathiari | Ep #775

The Secret to Keeping Clients for Over 20 Years with Pinaki Kathiari | Ep #775 Speaker 2: I want you to stop working for free. If you're tired of getting ghosted on proposals, the endless follow-ups and We'll think about it as a response. There's a better way. The top agencies aren't sending proposals. They're getting paid to pitch and close bigger deals way faster. I want you to grab this free resource I just put together at agencymastery360.com slash strategy. That's agencymastery360.com slash strategy and you'll learn how to flip the script if you want to get paid for your expertise instead of giving it away for free. Hey, Pinaki. Welcome to the show. Speaker 1: Hey, Jason. Thank you. Thank you for having me. Speaker 2: Yeah, excited to have you on. Tell us who you are and what you do. All right. Speaker 1: Hello, everybody. My name is Pinaki Kathiari, and I do a lot of things. Right now, I'm the CEO of a digital communications agency called Local Wisdom. I also co-founded a product called Resource Hero. I volunteer at the International Association of Business Communicators. I started a podcast called Why Does It Feel So Wrong to be Human at Work? I have a funny way of getting myself into a lot of different things and figuring it out from there. But essentially as an entrepreneur, my agency essentially helps in communication teams at medium to large size businesses, essentially helping them manage, launch, and scale communications. Speaker 2: Very cool. And how long have you done the agency and are you an accidental agency owner? Speaker 1: Yeah, that's a good one. I like the accidental agency owner question. Yeah, we're about to celebrate 25 years next year. So that makes me feel both proud and old to say that. And yeah, I think it was a little bit of a accidental agency owner as far as the origin story goes. Speaker 2: How did you get started? Speaker 1: Well, it was basically myself and my partners at the time. We met in college. So we went to Rutgers here in New Jersey. We were all computer science and graduated around like late 90s and early 2000s when that tech bubble burst. So we find ourselves out there with like no jobs really available. So we find ourselves back together again and saying like, all right, what do we do now? And I had noticed at the time, like the internet was becoming a big thing. And there were companies that did great design and companies that did great technology, but none that did both really well. And so that's what we started doing. We started just kind of like exploring our passions for both technology and design, bringing them together. And earlier on, we found our clients were communicators, both external and then later on internal communicators. And that's where we started to like niche it and hone in our skills of design and development for communication teams. Speaker 2: That's very cool. We were very similar because we saw the same thing. We started in 99. And so there was either design firms or programming firms. And there was one kind of doing it together well. And so that's, that's when we started. So what did you charge your first client? What was the, what was the fee? What was the huge fee? Speaker 1: Dude. Oh man. The, I think the first client was just like a, like startup type stuff. And I think we were like trading for things and stuff like that. Like, you know, they'd be bought like a. And today, I'm going to be talking to you about how to get started with a podcast. Speaker 2: What was it a thousand bucks? Speaker 1: No, the first big deal was five figures in like around 40,000. And that was kind of like, because that's when we kind of like started working more with more enterprises and companies like that. So it wasn't. Speaker 2: So before the 40, what was the price before that? And what gave you the confidence to raise your prices to 40? Oh, yeah. Speaker 1: The prices before that were, it wasn't working actually. Like, cause it was, this was like a, it was just a bunch of really small startups and You know, working with small startups was difficult because they were not funded at the time or they were like mom and pop shops. They were not funded at the time. And it's like their money, right? So it was kind of one of those things where like whenever we're kind of talking about price or anything, it just kind of got to you know, just almost started like nickel and diming and then scope creep and all of that stuff. And I'm like, you know, this headache is not worth it. I just want to do cool stuff. Fortunately, we did end up like all kind of And we're here to talk about finding work and working at like, so, so when we started the organization, like it was like college, you know, we all had our day jobs. And so one by one we had to, we were doing like local wisdom all at night and whatnot. Speaker 2: Working at Circuit City. Do you remember Circuit City? Speaker 1: Yeah, I remember Circuit City. Oh man, like you're going to make me take, go way back with that. Especially like this, the similar stories that, that we have too. And the Wiz and all that stuff. We, we all did get jobs at like good companies doing different things that we just didn't exactly enjoy. And so that, that kind of gave us the confidence to understand here's what it's like in enterprise. Here's what it's like at corporations and companies and here's what they're missing out there. So that gave us the confidence to like, and, and, you know, and here's what other really large agencies are charging. So, that gave us the confidence to go out there and say, like, this is a fair price for what you're getting. Speaker 2: So, you guys had to see what other, like, what your other large competitors were charging in order to give you guys the confidence to... Speaker 1: Yeah. Yeah, a little bit. Like, there was no... When we were starting out, there was, like, no... Like, we didn't have any mentors. We didn't have many even, like, other agency owners because... We were probably like so far and few between. The internet just started. There was no social media, so I couldn't really even connect with Jason Swenk at the time to be like, what are y'all doing? Speaker 2: Well, yeah, I mean, back then I just looked at everybody that was even trying to do an agency as competitors. I always laughed and I always say now I'm like, I would have never let my old self into my mastermind. Like, there was no way. Like, because I was just trying to seek and destroy everybody. I didn't realize that the power was in the community. Which, you know, was a huge mistake looking back because when, after I sold the first agency, I remember competitors reaching out and I started collaborating with them and helping them out and connecting them. And I was like, man, I could have grown so much faster. It was pretty funny. I was like, oh, well, my failure will help in other people's wins. Speaker 1: You know, that's, I think that's what we got right now, because I think that's what true entrepreneur is. It's just like falling gracefully and learning each time you fall so that, that we could like, cause yeah. Similarly, I am probably a much different person today. I want to say properly, I definitely am a much different person today and I've learned so much through all of that. Speaker 2: So after you guys got the $40,000 kind of bigger client, how did you guys shift? Or what was the mind shift? Did you guys go, well, man, we can go after bigger clients? Did you realize being like, well, if we make more profit, we can hire the right people so we can get out of the day-to-day? How long did it take you to get out of the day-to-day? Speaker 1: Too long because so it took me a long time to get out of the day-to-day actually. And it was because probably I enjoyed the day-to-day and I grew up in the day-to-day. So I think the shift happened for us when just kind of after like hiring the right people and understanding like what we're trying to do and just realizing. So I guess we came up with this idea of like, all right, here we're doing everything. And how do we kind of break down our job into smaller components to get the right people in place to take that on? Meanwhile, we could either You know, grow in this area that we haven't been doing and things like that. One of the earlier things that we did though, the scale was creating more managed services, more like subscription-based services, because we saw really early on that, like we'd launched like say a website or an intranet or something like that. And then we're like, you know, trying to You're up for another sales pitch somewhere else and we load up that website and we're trying to show it. I'm like, why doesn't it look as good as it did when we launched it? Because it's not looking as good. And then we looked into it, talked to people more. We realized that they just didn't have the time or even like the- The knowledge. Exactly. To be able to update it. Yeah, they screwed it up. So we're like, okay, you know what? Let's help you manage your web properties. Subscription-based thing, we called it curation at the time, like a museum curator would curate a museum, would curate your digital properties, making sure it's always maintained, looking well and fresh as content moves on and off the site. I think that was a big changer for us because, you know, as project work would kind of go up and down, our subscriptions work would keep us in this kind of like steady place, allowing us for like steady growth. And then we've kind of concentrated on larger organizations, kind of instead of trying to go after a lot of large organizations, let's go after a few large organizations and set up a relationship where we do a lot of work with a few organizations. 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Speaker 1: Oh, that's a good question. I wish I had that like data really up in front. I think we have way more reoccurring. I think we're like 60 or 70% reoccurring. We're like 30 is like project-based. And please, I'm saying this on your podcast, don't quote me on that, but that's where I believe it is. So this is an important time for us because it's all renewals and they're all like 12-month contracts. So I guess the last three months really kind of is foretelling of the next year for us. Speaker 2: How long do your clients typically stay with you since they sign up for 12-month contracts? Speaker 1: Really long, I guess our longest running client has been, so about 20 years now. Speaker 2: Are you still charging them the same amount? Speaker 1: Yeah. Yeah, roughly the same amount higher because, you know, the cost of things go up, you know, and things change. So, but, but we're comfortable. They're comfortable. Like we have a trusted relationship and it's, and it's like I was saying, it's not necessarily like we're working with one client at the company, but we're working for multiple clients at the company. Speaker 2: What do you treat as the way to Keep your clients for a long time. If you could go back in the very beginning and tell yourself like there's three non-negotiables that are going to determine if clients stick with us for a long time, what would they be? Speaker 1: Yeah, I think I think we took some of those things incorporated into our values. But one has been really about speaking with honesty and sincerity. So You know, that means saying no, if we don't think we can do it. That means saying no, I don't think that's a good idea. That means, but also saying it in a way that you've already built trust. So it's not like a personal attack in any different direction than is coming across with empathy. I think another way is always like finding ways to move forward because, you know, When we're working in digital and tech and stuff like that and people, there's always some kind of gotcha somewhere. And one of the things that we've kind of honed ourselves to do is when we hit one of those gotchas, I've seen a lot of people's first reaction is start to figure out, oh, well, you should have done that, you should have done that, you should have done that. Our first reaction is like, all right, how do we fix this? And then we'll figure out how to not do it again and stuff like that. Those two things, I think. Speaker 2: I know I've always wanted to be that trusted advisor to people and say, you know, look, I will always challenge you and say, well, have you thought about it this way? Or let's kind of rethink this part. Like I want them to come to me or our agency, our organization and going, here's the problem. What do you think? What are some solutions rather than the order taker? Speaker 1: Yeah. Speaker 2: You know, in the very beginning, I think your relationship can, and it really starts from the first conversation, even when you're chatting with the problem. Like, are you the one asking all the questions or is the client? Speaker 1: Yeah. Yeah. That's the kind of, those are the kinds of things that we learn over time. I think one of the interesting things is we've. For the longest time, we've been more of an execution company. So probably more in the order of taking camp of it all. Of course, we'd still ask the right questions. Of course, we'd still say, listen, there's something flawed in the way you're thinking. Let's rethink that in a way. But we basically saw a need where most of our clients were getting and having a lot of ideas But no fast and flexible, easy way to execute on them. Speaker 2: Yeah, I like that. Well, this has all been a lot of fun. I appreciate you coming on the show. Is there anything I didn't ask you that you think would benefit the other agency leaders listening in? Speaker 1: Not really, but maybe something that might be interesting because, and I'd love to get your take on it too, because I think we came up in the same It's been a long time period-ish in the same type of like work and really been thinking about this idea of how entrepreneur and creativity kind of come together, especially in the same person. I found this kind of interesting struggle. Like I said earlier on, I just came in, you asked earlier on about like, when did you stop being involved in the work? And I'm like, I just enjoy the work. So it's hard for me to stop. But I think that's a mentality of a creative as opposed to an entrepreneur who's thinking like the other question you ask is like, all right, like, what's the end goal? And how are we going to get there? And you know, what's the state? And it's funny that you asked both of those questions in this because I probably have struggled with both of those things and how does that kind of fit in me with my own inner conflict. Maybe I'll ask you, does that resonate with you and how have you thought through that? Speaker 2: Well, it kind of starts with the first, if you think about the first question, accidental agency owner, right? And we knew that I'd do something cool. Someone offered us money and we were kind of off to the races. And then we had to figure out the business side of it, right? Like my first client asked me to send him an invoice. I didn't know what an invoice was. And like, I always joke around. I'm like, I had to ask my dad because the internet wouldn't even tell me what an invoice was because there was not many search engines. Google definitely wasn't around. So we have to figure it all out. But like originally we started out as creators. We're just curious about this particular industry, whether it be curious about social media or curious about AI or technology or whatever it is. And then we can kind of get into it. But what I always tell everybody, because especially when anybody comes to work with us, I always tell them, I say, There's three goals I have for you. I want you to connect with other like-minded people. I want you to gain clarity from them and gain clarity of where you're wanting to go, but then also have the confidence to go there and live with that decision. Now, like when you get that clarity of where you're wanting to go, so like the one day I had clarity of the first agency, I was like, all right. I'm going to do these five roles. I'm going to transform from an owner to the CEO, and none of those roles had me still leading the design meeting, which I loved. I'm creative. I designed the business where it didn't need me for that, but I had passion for that. And so I still did it. Now I didn't have to do it, but I wanted to do it. And that's okay. Like another example, one of our mastermind members, Audra, we always tell the agencies that come into the community, I'm like, look, you got to get rid of marketing. You got to get rid of ops and you got to get rid of sales for what you're doing in there. And so they come in and we set up the right systems, we put the right people in the right place. But Audra loved the sales. So she was getting depressed. And so we go, well, what about sales do you like? She liked the clothes. She liked adding color of what I like to say in the later meetings. I said, Audra, get back in, add color, be a part of that. But no, you don't have to do it if you don't want to. So she got back in and she does the things that she wants to do. That's the thing, like we create this business. We want to create freedom. What's freedom? Picking and choosing to do the things you want. It's not because Jason said, here are the five roles of an agency CEO. You can only do those. No, you still can do the ones you like. If you still want to design the landing page, go do it. But you don't have to. Speaker 1: That's brilliant because it's the same thing that we've come up to. It took a long time for me to kind of come to grips with what I want to let go and things like that because I don't know. I like a lot of things, but right now I get involved in work as a trigger point. I enjoy the work, but it's a trigger moment that if Pinaki is involved in my work for three months or something like that, that's a trigger moment that we need to start thinking about really hiring. So I'm like a stopgap. So it's like, where could I fit in in a way that works best for everyone? Speaker 2: Yeah, we just got back from one of the events that we put on throughout the year. And I always ask people, and you may want to do this and everyone listening, you should also do this with your direct reports. Go to them and saying, what do you suggest I start doing, continue doing and stop doing? And they'll tell you. And they'll be like, look, Pinaki, you're a bottleneck for this. You don't need to be a part of this. And then you'll be like, wow, I didn't, I never thought about that. That gives me more time over on this creative part. And they were like, yeah, we want you more than that. Or, hey, if you like this and this gives you energy, do it. But if your end goal, and this all goes back to the very beginning of clarity, we have to know the destination, where we're going. It could be to build a lifestyle business. Perfect. Could be to build an incubator company and build other brands. Great. Could be to sell it. Whatever that is, now you need to start taking actions in order to get there. So if your business is to build it up and sell it one day, well, you better be able to get out of sales or you better be able to get out of client work. Because if I came to buy your agency, I'm going to devalue the hell out of it because You think you might want to work for me after I buy you, but then you'd be like, fuck it, man. I've been doing this 25 years by myself. I don't want a boss. Right? Like that happens all the time. Speaker 1: No, that's true. We also have to be careful of like, if you don't mind, I'll share a quick story of like how we've been too involved and involved and kind of pull out like what you said, right. About asking people what we should stop doing and things like that. That's kind of one granted. One, they feel comfortable enough to tell you, and two, they know themselves. Like one example, a few years ago, I just hired a salesperson, and I decided to hire salespeople that are coming from more of a product background than a services background for a specific reason, and that could be another episode. But in my process, I'm like, all right, we'll send the SOW out, and then we schedule a meeting to talk to the SOW, and then see if everything makes sense, and then sign and go. And then a new salesperson comes in, and she's working on a deal. And I just see an email come through, and she just sends an email, like, hey, this is the SOW. As soon as you sign, we can get going. Let me know when you're ready. And I panicked for a second, thinking, oh, my God, she didn't schedule that meeting. And what if they have questions? And I was about to respond and reply all. I said, Pinaki, you know what? Just don't do that. Let's just see what happens. And then the next morning, oh, here's the SOW signed. Let's go. And I was like, wow, I would have gotten in the way at that very moment if I did something. So it's just being really mindful of things like that. It's, it's, it's rough. Speaker 2: Yeah. And I heard two of, you know, as, as we figure out more and more, like if we go back in the. When we both started, we knew jack shit. We didn't do anything. And you just figure out more and more over time. Immediately when someone on the team does something that I disagree with, I'm always going to be like, walk me through the process because I'm going to assume the process is broken. And I'm going to say, well, walk me through the process that led to this. And then if it's then after that, it'd be like, well, if there's no process, be like, well, let's define a process and then follow it. Then if they don't follow that, then it's on the person, right? Like, then it's like, I'll always jump on the grenade first, but, you know, it's, it's, it's just fun to learn. Over the years, and like I always laugh at people like, hey, you know, I can't wait to like, they'll come in and they'll join the community and they'll be like, all my, all my things are going to be solved. I'll be like, we'll solve your biggest challenge. But that solution will create other problems that if you're in the wrong business, if you don't like solving problems, there's just a problem that problem that we need to solve. And that's why I'm like, look, just don't think you're going to solve this one problem and then things are going to like the sunshine and rainbows. It just takes some time and it's just like, all right, how do I put the right people in the place? Because I always joke with people, and I'm not joking when I say this, when they go, hey, how do I do something? I'm like, you're asking the wrong question. You should be like, who needs to figure this out? Not you, right? Speaker 1: That's major. That last thing you said is major right now. That's kind of one of those things that took me a lot of years to figure out. It's not like, how do I do this, but who's the right person and how could I equip them in a way to get it done? Fantastic. Speaker 2: Yeah. Well, this has been a lot of fun. I want to thank you for coming on the show and sharing your experience. We'll have to get you back on and we'll talk about hiring the salespeople. I think that'd be interesting. And for everyone listening, if you guys do want to be a part of We're really an agency owner community, very small knit community that really is transparent. There are no egos. They love sharing their wins. They love sharing their failures. So other people don't have to go through that painstaking thing. I'd love to invite all of you to Click on the little scale button on the Agency Mastery website and let's have a conversation and see how we can help you out, see if you're right for the community or not. And until next time, have a Swenk day.