[00:00:00] Arlen: Welcome to the Agency Health Podcast, where we dig deeper into key agency health topics, mining actionable insights to help build a better firm. [00:00:10] This episode is part of a mini series on systematically creating new client relationships. I'm happy to have Corey Quinn joining me today to talk about the generalist trap and deep [00:00:20] specialization. Corey has spent over 15 years in agency marketing and sales, including six years leading marketing for Scorpion, helping it grow from 20 to [00:00:30] 150 million as chief marketing officer. then, he is focused on helping agencies escape founder-led sales through deep specialization, a systematic [00:00:40] approach to agency new business. Corey, I've really enjoyed your workshops, your emails, and our conversations. new business is a passion of mine and I'm [00:00:50] grateful for the chance to sit in a growth seat where I can put to work some of the tools that you teach

[00:00:55] Corey: I'm excited to be here. I've been looking forward to this. Spending some time with you. Yeah, this [00:01:00] is gonna be awesome.

[00:01:01] Arlen: After your six plus years, helping Scorpion not your first gig in agency marketing, but helping them grow from 20 to 150 million, [00:01:10] what led you to start a consultancy? And honestly, why, why should we listen to you, Corey? 

[00:01:15] Corey: Yeah, that's a great question. I think when I was leaving Scorpion it [00:01:20] was after I'd had a really good run there. You shared about six and a half, almost seven years actually. And I had a very [00:01:30]uncomfortable feeling. Probably the uncomfortable feeling that many others feel when they really want to build their own empire, 

but they're [00:01:40] in someone else's business. So I was not the entrepreneur, I was working for an entrepreneur. Yet I believed in myself. Yet I believed I could build something substantial. And [00:01:50] I had done so earlier in my career, way back right after college. I graduated from UC Santa Cruz. My best friend and I, we raised $6 million to start a dot [00:02:00] com business back in the late nineties.

And it was an amazing time. It was, a time in my life where, you know, things were happening quickly. I was growing quickly. [00:02:10] I loved it. The business didn't work out. But, you know, fast forward many years of after being an employee for a while. It was time for me to really, you know, answer the [00:02:20] calling that uncomfortable feeling I was having when I was working at Scorpion.

I loved Scorpion. It was amazing. I grew so much professionally and personally. It was really wonderful. And when I left Scorpion, I had [00:02:30] an opportunity to go work for other people. We had such an amazing run at Scorpion, people were interested in hiring me to come work for their company.

They wanted to [00:02:40] get similar results that we were able to create. And of course I, I entertained those ideas for a little bit, but really saw this opportunity for me to really invest in myself. I had been [00:02:50] building my career up at Scorpion. I'd been in the agency space for 20 years, had a lot of success there, and I got an MBA from USC, and I think I, I had all the raw [00:03:00]ingredients I needed at this stage in my life to really invest in myself. And so I decided to go into business for myself. I, I thought I was gonna [00:03:10] be a solopreneur, which is I guess more of a trendy term now, or it has been trendy over the last couple years. I didn't wanna work for anyone else. I didn't want have a huge team anymore.

I had 30 people [00:03:20] reporting to me. I didn't want the whole corporate structure. I didn't want any of that. I just wanted to do work and work for great clients and frankly, leverage the experiences that I had built over my career, 20 [00:03:30] years in agency space, as I mentioned. And so I decided to take what I had learned and start to consult with agencies and also [00:03:40] specifically help them through a stage of growth that I was able to help Scorpion through, which is sort of that startup phase into more of a, let's call it a a [00:03:50] well-oiled, you know, operationally driven sales machine that has become for the founder, an amazing asset for himself, his employees, his family, [00:04:00] and others. So 

[00:04:00] Arlen: Mm 

[00:04:01] Corey: that's really what I was interested in, and I've been doing that ever since.

[00:04:03] Arlen: And it sounds like there's a multifaceted mission that I'm hearing in there of [00:04:10] what you're hoping to accomplish or achieve in your venture. Tell me about that, both maybe the bigger picture and also what that means for you personally.

[00:04:17] Corey: Along my journey I realized that the way I wanted to [00:04:20] build my life and my career was through a win-win type of situation. So I wanted to be able to work with clients so that they win and then their clients [00:04:30] win. And then by doing so, I'm gonna win, right? And so I believe that through my experience at Scorpion, again, the previous experiences leading up to that, I believe I had a [00:04:40] lot of value to give that would create a win for my clients, my clients clients, and have a massive impact in the world.

There's a great book by Cal [00:04:50] Newport called, "So Good They Can't Ignore You". And it was given to me when I was leaving Scorpion. It was through a coach of mine and he suggested I read it. And the really, the synthesis of that [00:05:00] book is that you can build a lot of career, what they call career capital or a lot of leverage in your career by becoming really the best in the world at solving a specific problem.

And I [00:05:10] saw that and I, I wanted to apply that thinking to my world and, and I thought about like, what problem could I solve that would be useful in the world? And again, I look back [00:05:20]at my experiences and it was ultimately crystallized down to the, you know, solving the pain point of helping agencies escape founder-led sales.

It aligned perfectly with my experience, my [00:05:30] passion for marketing and sales, and creating a massive impact. And so my mission today is to help a thousand agency owners you know, truly escape founder led sales and build a very powerful [00:05:40] asset.

[00:05:40] Arlen: So let's get into that a little bit more. What is

[00:05:42] Corey: Yeah. 

[00:05:43] Arlen: the problem that you see

[00:05:44] Corey: Yeah. 

[00:05:45] Arlen: agencies facing over and over in this space with founder-led sales?

[00:05:49] Corey: Yeah, [00:05:50] so I'll start by sharing a very common story. This isn't a hundred percent of the time, it always works out like this, but usually you have an agency [00:06:00] founder who maybe isn't quite yet a founder yet, because maybe they're working for someone else, they're moonlighting on the side, doing some freelancing, or maybe on Fiverr building [00:06:10] websites or maybe doing SEO.

And this soon to be founder is eager to start an agency. And so what do they do? They send out an email to all their friends and [00:06:20] family and colleagues and classmates, and they say, Hey, does anyone need a website? Or is anyone looking for some help with SEO? And of course, their friends and family, they wanna support this [00:06:30] budding entrepreneur. And so they'll say, sure, yeah. Here, you know, here's my website, you know, can you help me? Of course, this new agency founder, all of a [00:06:40] sudden over delivers for these first clients and by overdelivering they get a lot of referrals, and all of a sudden they have a clientele.

They've got [00:06:50] business. Maybe they've hired a couple freelancers to help themselves and it's a success. It's a good thing, right? They're able to quit their job and they're able to go full-time on the agency. Eventually they lift [00:07:00] their head up and they realize, gosh, you know, Arlan, I, my business is full of context switching.

I mean, today I'm building a website for a dentist. Tomorrow I'm doing a, building an SEO strategy for a [00:07:10] manufacturing firm, and then the next day I'm doing a an e-commerce strategy for a furniture company down the street. And all of this context switching results in [00:07:20] operational inefficiencies. What I mean by that is, and you probably heard this in the work you do, right?

You have an agency that is committed to this, you know, operationalizing their [00:07:30] business and using SOPs. But of course no one uses them 'cause they're not helpful. And so you have a business that is effectively dependent on the [00:07:40] founder, and the founder truly becomes the bottleneck. They're the only person in the building who knows what was sold, where each client is, which special combination of services and [00:07:50] products were sold to each client.

And as a result of that you have things like scope creep. You end up shipping a mediocre product because no one [00:08:00] fully understands the whole context, right? You just have a bunch of doers working on pieces of things, and of course when your clients realize that, hey, this is not world [00:08:10] class, you know, this is not amazing.

They begin to think of you or this agency as more of a commodity. And as we know what commodities get traded [00:08:20] for similar services for less expensive, right? So you can, you know, they figure I'll get this same service from somewhere else for cheaper because, you know, anyone can do this stuff.

And as a [00:08:30] result of being perceived as a commodity by your clients, you end up having client churn, right? Clients leave you, and when clients leave you, you end up having to chase [00:08:40] revenue. Which means that you start over the cycle over, I'm talking, I'm calling it the generalist trap, where you end up saying yes to everybody, reinforcing the [00:08:50] context switching, reinforcing the inefficiencies in your business.

It's really a negative flywheel. It leads to bottlenecks, it learns, leads to burnout, and it is [00:09:00]truly a race to the bottom, especially in our world of ai.

[00:09:03] Arlen: So this is the pattern that you're seeing with your clients 

[00:09:06] Corey: Yeah. 

[00:09:07] Arlen: and often in the agency world is, what you call the generalist [00:09:10] trap here. So let's talk about. The antidote as you see it, right? Deep specialization in

[00:09:14] Corey: Sure. 

[00:09:15] Arlen: what you teach,

but I find it helpful to start with what deep [00:09:20] specialization isn't.

So maybe you 

[00:09:22] Corey: Yeah. 

[00:09:22] Arlen: can tell me a little bit about that. When people hear the word deep specialization the phrase, they probably get a lot of ideas about that. What [00:09:30] isn't this prescription?

[00:09:31] Corey: I would say that when people think about specializing, usually they think about sales and marketing tactics, [00:09:40] which is, if you think of a, sort of the metaphor of an iceberg. 10% Of an iceberg is above the waterline. And that's what everyone else sees in the marketplace. And that 10% of the [00:09:50] iceberg is typically the sales campaigns.

Like, Hey, we're gonna, launch a bunch of new offers, or we're going to do this vertical specialization thing. We're gonna throw up a bunch of [00:10:00] landing pages and we're gonna run some ads and kind of see how it goes, right? We're gonna launch a new sales deck or a new sales process.

All of these things, which are sort of that 10% [00:10:10] above the waterline, as I call it. 

[00:10:12] Arlen: Yeah. 

[00:10:12] Corey: The packaging, exactly. Design a new website, or hire a new LinkedIn lead gen consultant. All of those [00:10:20] things are the shallow way at fixing sort of growth of an agency.

What's beneath the water line is much more profound.It is much more powerful and it's truly [00:10:30] what does drive the growth of really leading agencies today. Which is two things. Beneath the waterline 90% of the iceberg exists down [00:10:40]below. In the foundation of that iceberg, at the very bottom, is what I call strategic specialization.Not random specialization, strategic specialization. So I'll tell you, a quick [00:10:50] story, Arlan, that I think crystallizes this. I was talking to a business owner, her name is Nicole. She actually owns a, an accounting firm, which is not really a marketing [00:11:00] agency, but it's a service-based business and applies, you know, to, this conversation, I think.

 And she was frustrated. I got on a call with her and she was like, gosh, Cory, you know, I've been doing this vertical specialization [00:11:10] thing and it's just not working so I asked her. So, you know what, what have you been doing, Nicole? And she said to me was that a couple years ago really got interested in [00:11:20] taking a vertical approach 'cause of all the efficiencies and the scalability that you can have as a vertical specialist.

And I Started specializing in wealth management companies. And she [00:11:30] started doing all these really great things like speaking from their stages and writing content for them and launching a podcast and building relationships and networking. And eventually she built up a nice [00:11:40]stable of these wealth management clients. She realized at that point that the size of the wealth management industry was too small for her. 

[00:11:49] Arlen: Hmm. 

[00:11:49] Corey: What I meant by [00:11:50] that is that if she was massively successful in becoming the go-to solution or accounting firm in that space, she still wouldn't build a firm that was big [00:12:00] enough or didn't match the sort of goals and the dreams 

[00:12:02] Arlen: The vision.

[00:12:03] Corey: that she had been building for. And so she said, okay, well this sucks, unfortunately, but you know, I'm gonna try again. I'm gonna go [00:12:10] after another vertical because this time I'm gonna make sure it's a big vertical, so I'm not gonna have the same problem. So she started specializing in agencies [00:12:20] of all things. She started speaking from their stages and writing content, launched a podcast, doing all the right things, building the relationships, started to build her business around this [00:12:30] new vertical specialization.

And then she lifted her head and said there's a lot of agencies, but they're just not my people. Right? And so what she [00:12:40] was saying effectively was, I've been doing this thing for years now.

I've gone down this road once and then twice. I'm at square one and I'm thinking about just ditching this whole thing because [00:12:50] clearly it doesn't work. That is the opposite, that approach, unfortunately, it's very common, but that is the opposite of what I would recommend as a strategic approach.

And we could talk about how to actually [00:13:00] choose a vertical market for your agency so that you actually have long-term success. So that's the, the first thing is being strategic. Yeah. 

[00:13:08] Arlen: I'm very intrigued. 

[00:13:08] Corey: Right. 

[00:13:09] Arlen: Because I think, a lot of [00:13:10] us would say that list of things you said she had done,

[00:13:13] Corey: Yeah. 

[00:13:13] Arlen: those are good things to do,

[00:13:15] Corey: Yeah. 

[00:13:16] Arlen: to not just change the packaging, but to really engage with a vertical 

[00:13:19] Corey: [00:13:20] Yes.

[00:13:20] Arlen: in the ecosystem. So that's great. What problems does your approach to deep specialization to, you know, pursuing a vertical?

What problems does it [00:13:30] solve? Help me understand that a little bit more. 

[00:13:31] Corey: So one of the ultimate problems, is gonna be if a dependency on the founder for sales. 

[00:13:37] Arlen: Okay, so where the generalist trap is more of a [00:13:40] negative flywheel.

[00:13:40] Corey: I'm gonna talk about a positive flywheel. I wanna actually get you somewhere forward, right? So it is starts with specializing in a vertical market, which means [00:13:50]identifying through a process we'll talk about in a minute by identifying a vertical that is strategically sound and aligns with your business.

And so once you choose that, you begin to focus [00:14:00] your sales and marketing efforts on building relationships and clients in that vertical market. It's not that you have to fire all your existing clients, it's that if I'm gonna spend [00:14:10] any money going forward on building my business, it's gonna be targeting dentists or plumbers or manufacturer or one of these, you know, one of these vertical.

[00:14:18] Arlen: The pro-active marketing efforts are [00:14:20] gonna be...

[00:14:20] Corey: The proactive marketing efforts, right. And so when you do that, you begin to build expertise. That comes through repetition. If you are working with dentists every day you [00:14:30]work with 10, 20, 30 dentists, you begin to get pretty good 

[00:14:33] Arlen: pattern matching. Yeah.

[00:14:34] Corey: and you build some expertise. What's that? Pattern matching, exactly. And you get [00:14:40] dangerously good over time, right? Where it's like that old Bruce Lee quote, He said that, I fear not the man that has practiced a thousand kicks once. I fear the man that has practiced one kick a thousand [00:14:50] times. As a result of that expertise that you begin to build, you're obviously able to build those systems.

You're able to build frameworks and playbooks that your employees who don't [00:15:00] need as much specialized knowledge that can come in, that are greener, come in, and they can actually plug into your system, which creates operational efficiencies, creates leverage in [00:15:10] your business. What I mean by that is that, through repetition systems, you're able to create a predictable, good outcome for your client, consistently. Obviously we don't have control [00:15:20] over everything.We did this at Scorpion in my last agency. We had this massive growth. We would have an assembly line where when a client was sold, when they signed a [00:15:30] contract all the way through to when they had their website launched, their campaigns running, there was about 27 different steps. It was an assembly line and it went from one station to the [00:15:40] next, and it was very systematic. 

[00:15:41] Arlen: Then those SOPs make sense, like you talked about earlier. 

[00:15:44] Corey: Exactly. 

[00:15:44] Arlen: In a generalist firm, you have SOPs and no one follows them because honestly they shouldn't follow them.

[00:15:49] Corey: They're not [00:15:50] helpful. Yeah. And so as a result of this operational, kind of leverage this repeatability and ultimately the great results, you build authority, right? You build a [00:16:00] reputation for yourself in the market, which leads to the ability to charge more. When you charge more, it's because you are a rare resource in the market.

That's hard to find somebody who really [00:16:10] understands our problems, you could charge more. And of course, when you are charging more, that puts you in a position to really be able to reinvest the [00:16:20] margin and accelerate your results into that same vertical market. Now you can go in additional verticals.

I'll tell you what we did at Scorpion: one of our [00:16:30] core vertical markets was personal injury attorneys. What we did is we ran this cycle, or we've chose the vertical market. We actually started working with them early. So we built a lot of [00:16:40] expertise. We understood their world. We built systems and software and had a bunch of that operational leverage.

Which turned into our ability to build authority, and we raised prices. [00:16:50] And the result of that was that our PI, personal injury attorney clients would pay us $5,000 a month and they would stay with us for 30 months. [00:17:00] Which means that each new client generated $150,000 in revenue. Our closest generalist competitor charged $2,000 [00:17:10] and they would only keep their clients for 12 months. 

[00:17:13] Arlen: Hmm. 

[00:17:13] Corey: So every new client that we got was $150,000. Every new client that they got was $24,000. We [00:17:20] had a lot more revenue to be able to go out and market much more aggressively than our competitors.

[00:17:27] Arlen: Yeah, and provide a better experience and.

[00:17:29] Corey: Create a [00:17:30] better experience, invest in better people, like all the way through, right? That's really the essence of the deep specialization flywheel where you have efficiency, you have [00:17:40] authority, you have margin. And I think in today's world where AI is really coming in and shifting a lot of the dynamics in the industry, I believe that today agencies [00:17:50] really need to spend less time in the tactical execution parts of the business.  But from a relationship and from a value perspective, I [00:18:00] believe that the best place that you can build in is being able to be truly a trusted advisor in that business. And that happens not in the tactics, but it [00:18:10] happens in the strategy that you can provide. You know, what strategy to provide because you specialize in that business.

[00:18:15] Arlen: I see the wheel. That seems really clear, right? And how you're putting those pieces together. The pattern [00:18:20] matching leads to the ability to have success, to retain clients, which means

[00:18:25] Corey: Yeah. 

[00:18:25] Arlen: You know, your cost per acquisition is less per dollar [00:18:30] revenue. And then in addition to that you are able to, with that revenue reinvest and keep that wheel going. I think the questions that I have are mostly around, [00:18:40] okay, how do you start that flywheel? 

[00:18:42] Corey: Yeah. 

[00:18:42] Arlen: How do you get it going? So an agency wants to pursue a new vertical

[00:18:47] Corey: Yeah.

[00:18:47] Arlen: and maybe they don't have any verticals they, they've been a [00:18:50] generalist or maybe they have one. But there's a problem with that one,maybe it works out okay for a while, but it's too small Or you find after a few

[00:18:56] Corey: Yeah. 

[00:18:57] Arlen: years that, Hey, these aren't really my people, whatever it[00:19:00]

[00:19:00] Corey: Yeah. 

[00:19:00] Arlen: What are the first steps? Where would you say people need to start down

[00:19:04] Corey: So... 

[00:19:05] Arlen: the deep specialization pathway?

[00:19:06] Corey: Yeah, and I tend to [00:19:10] recommend. That businesses, agencies is, they're getting started to actually be more of a generalist.Start saying yes to everybody because [00:19:20] until you have a lot of experiences in the marketplace working with good clients, bad clients, this vertical, that vertical bad experience puts you in a position to make a very high [00:19:30] quality decision on where to specialize. 

I think there's a famous investor, Paul Graham, he says, you know, when you start a new business, you wanna do things that don't [00:19:40] scale. And I'm a big fan of that because that gives you judgment, like better judgment than just saying, Hey, I'm just going to specialize in dentists 'cause why not, right?

[00:19:50] And that kinda leads into the strategy that I teach my clients, which is when you have had you know, some good data, the first step is you need, number one, [00:20:00] you wanna harvest the wisdom that exists within your business. What I mean by that is you wanna do things like go back into your [00:20:10] book of business, your current clients, past clients, group all your clients by vertical, and you wanna look at things like.

Which verticals drive the most revenue? Which ones drive the most [00:20:20] retention? Where do we get the best margin? Where do we get the most, you know, referrals from where, what? How does that all stack up on a vertical by vertical basis? You also wanna [00:20:30] have to be curious about the people who are working with your clients in your agency, like your account managers, the frontline people who are working with clients day to day.

Be curious and ask them things like, [00:20:40] hey, if we were gonna specialize in only one type of client, only one type, have a vertical market, which would you choose and why? Same thing with your sales team, right? They're gonna probably recommend a [00:20:50] vertical market which they feel like they could sell into. Maybe because you have a lot of great case studies because they understand that market, right? There's a lot of really rich data. So you wanna go in and [00:21:00] you want to harvest that data in a meth method. Method, methodologic. 

[00:21:04] Arlen: Methodologically. Yeah, that's

[00:21:06] Corey: Methodologically, I can't say that word, but that's the word. Yeah. [00:21:10] Using structure. So I actually, I have... 

[00:21:11] Arlen: Methodically, yeah. 

[00:21:11] Corey: Yeah, thank you. I still can't say it, but I have a process called the Focus Finder, which takes you through sort of the quantitative, the qualitative [00:21:20] aspects. You look at things like, is this vertical recession proof, and those type of things. So there's, there's a way to, to measure all of that stuff, to be able to score it, to be able to sort of [00:21:30] begin to wean out bad fit verticals.

That's number one. And then number two is, like it or not, you have to care about the vertical market today. It's not [00:21:40] good enough to just say well, there's a lot of personal injury attorneys in the market. And I see a big, you know, financial opportunity for me. So I'm gonna target personal injury attorneys.[00:21:50] I'll tell you a quick story about a gentleman by the name of Luke Eggebraaten. Do you know Faser Marketing by chance? 

[00:21:56] Arlen: No. 

[00:21:57] Corey: so Luke is agency [00:22:00] founder, and he, they target construction businesses. And the big challenge in the construction space is, and this comes from Mike Rowe, the old "Dirty Jobs" host.

He says that there's [00:22:10] a five to two challenge or problem in the construction industry, which is that for every five people who are retiring out of construction, only two people are [00:22:20]coming in. 

[00:22:20] Corey: So what does Luke do? He is the founder of Phaser. He services this industry, and of course he builds websites for them, does SEO and PPC.

And of course he'll even do ad [00:22:30] campaigns to help his clients to fill roles. But he goes to a whole nother Level. And what he does is he has started a foundation which raises [00:22:40] money to raise awareness of careers in the trades. So he goes, and he has written books. He actually speaks on stages. And every year he hosts a big black tie event [00:22:50] where they raise a bunch of money and then they bring out a student who, who won the scholarship and give 'em all these big paper checks, you know, with thousands of dollars.

And this student is [00:23:00] graduating high school, going into the trades and not into college. And so what he has done effectively that I think is brilliant, what Luke has done, is that he understands [00:23:10] the deep fundamental challenges that are, the people he is serving, are struggling with, and he isn't just paying lip service to it.

Yeah, we specialize in the construction industry. We really care about it. He's [00:23:20] actually doing something profound to actually solve the problem. 

No lip service. And I think, you know, it's probably an extreme example of how, you know, how you [00:23:30] can exemplify that you care. But the reality is, Arlen, is that you're gonna be spending a lot of time with these folks.

[00:23:36] Arlen: Mm. 

[00:23:37] Corey: You're gonna be speaking from their stages. You're gonna be interviewing them on [00:23:40] your podcast, you're gonna be writing content about them, it really is that requirement of really caring. So that is number two. You have to actually look at yourself, look at the vertical market and [00:23:50] say, do I really care about these people?

[00:23:52] Arlen: Am I willing to invest in solving their bigger problems, even when... 

[00:23:55] Corey: Thank you. 

[00:23:56] Arlen: they don't align directly with what my firm is doing.

[00:23:57] Corey: Exactly. This doesn't [00:24:00] necessarily mean have to mean that you're that you're spiritually connected to this vertical market, but you have to find a way to really care about these people. Or just be honest with yourself to investigate whether or [00:24:10] not that potential exists. 

[00:24:11] Arlen: Hmm.

[00:24:11] Corey: And so you have to go through that process.I have something that's called the Care Compass to help with that. And then the third step, and this is really where the emotional sort [00:24:20] of buy-in comes, which is, this is when you go out and you look at the total revenue opportunity for your agency. And why this matters is [00:24:30] that we wanna avoid what Nicole found out the hard way around the wealth management industry, which is that we wanna know going in what is the true [00:24:40] revenue opportunity for an agency founder.

So how you do that is you look at the TAM, which stands for Total Addressable Market. Let's call it plumbers. [00:24:50] And let's just say that there are 20,000 plumbing businesses in the US that could potentially buy from you. They have a pain point that you solve and you have a product that can help them to solve that [00:25:00] problem.

What I want you to do is I want you to multiply that TAM by 20%, 'cause we know through the Pareto principle that out of any market, 20% are probably gonna be the best [00:25:10] fit for you. So you multiply the 20,000 plumbers by 20%, that's 4,000 businesses. And then what I want you to do is I want you to multiply that number by [00:25:20] 3% because through effort and focus over relatively short period of time, you should be able to gain about 3% of that market. So that's 120 businesses. [00:25:30] Okay?

[00:25:30] Arlen: So these are the people who might be buying in the near future or entertain...

[00:25:34] Corey: yeah. 

[00:25:34] Arlen: buying in the near future. Yeah. 

[00:25:35] Corey: Exactly. And when you have 120 businesses and you multiply that [00:25:40] times the average revenue per client in that vertical. I'm not gonna do the math live on the pod here. 

[00:25:45] Arlen: You have a good guess of what you might be able to earn in a year. 

[00:25:45] Corey: Exactly. So if you charge $5,000 a month, $60,000 a year, [00:25:50] times 120, that's a multi very healthy, multimillion dollar business and through all the things we talked about with deep specialization, you have the systems, you have the operational leverage. [00:26:00] Through the repetition, you're able to actually have really fantastic margins. 

[00:26:04] Arlen: Mm-hmm. 

[00:26:05] Corey: And, interestingly, we raised a hundred million dollars from private equity by selling a [00:26:10] minority stake in the business.

We're able to do that is because private equity, of which there is a lot of dry powder in the market right now, a lot of of companies trying to acquire agencies. They looked at Scorpion and [00:26:20] they saw three things, which were really important. They saw retention. When you're a vertical market specialist, people stay with you.

They saw net profit or EBITDA and they saw growth, [00:26:30] 30% year over year growth or more. And those three aspects of an agency drive a lot of enterprise value for your firm, and it happens to also [00:26:40] be the output of what you get as a vertical market specialist.

[00:26:43] Arlen: Yeah. And to do that, I mean, Scorpion, how many verticals were they in at that point?

[00:26:48] Corey: Great question. So, [00:26:50] when I arrived it was legal, and a little bit of healthcare. We expanded into home services and then franchise and then medical, which is, we categorize that different from [00:27:00] healthcare. But healthcare was mostly hospitals and hospital systems, so we had about five vertical markets. The way we did it, I think is a little bit unusual [00:27:10] in that instead of having an account manager who I originally worked with, attorneys now work with home services and attorneys. We actually created a different division, [00:27:20] different resources to manage each of the five verticals. 

[00:27:23] Arlen: Deep specialization within these departments.

[00:27:25] Corey: There you go. That's it. You got it.

[00:27:27] Arlen: I think what you described [00:27:30] there of deep specialization, a key thing that I'm hearing is you need to choose the right vertical and that is where maybe a lot of the problems people get into [00:27:40] are found actually is choosing a vertical that there isn't a big enough opportunity or you know, it's not a vertical that you can really care deeply about [00:27:50] because it's hard to sell when you don't really care about the problems of your customers.

Would you say that's true that a lot of the problems people get into with deep specialization relate [00:28:00] to choosing the wrong place to play?

[00:28:02] Corey: I think you know, the secret about vertical specialization is out. It's not a well kept secret. Everyone knows about this. And if you [00:28:10] want to target attorneys or plumbers or dentists, trust me, they're getting approached by a lot of agencies that sound verticalized. The way you break [00:28:20] through is with empathy.

And that is hard to come by because most agencies are not willing to invest that type of care and emotional sort of labor that is [00:28:30] required.

[00:28:30] Arlen: So how does that fit into Outbound? Right. Outbound... 

[00:28:33] Corey: Yeah. 

[00:28:33] Arlen: often gets a bad rap in agency space. 

[00:28:35] Corey: Sure. 

[00:28:36] Arlen: Maybe not even that it's a bad thing, but that, Hey, I [00:28:40] tried that. It doesn't work. Right? So, when you think about your formula for deep specialization.

[00:28:46] Corey: Yeah. 

[00:28:46] Arlen: How does that tie into taking Outbound from, you know, [00:28:50] repeated failure to something...

[00:28:51] Corey: Yeah. 

[00:28:51] Arlen: that actually can work?

[00:28:52] Corey: So going back to the iceberg, one of the things that happens below the waterline but above the specialization is messaging [00:29:00] and positioning. And so what you want to do is, what I advise my clients to do is once you've identified a vertical market to specialize in, going through the three steps that I mentioned, then you [00:29:10] want to be able to

communicate to that market that you understand them deeply, that you understand their problems, you've solved them for other people who are like them, and that is [00:29:20] required before you do any type of marketing. Being able to have that focus and have that positioning, messaging, that empathic messaging, because when you have those two in place, your sales [00:29:30] and marketing becomes much more powerful.

And that's definitely true with Outbound as well. So the way that I teach my clients and a topic I'm very passionate about is something [00:29:40] that's called Gift-Based Outbound, and it's kind of the antithesis of what traditionally people think about Outbound. Typically, people think about high volume, [00:29:50] you know, email, cold emails, or cold calls, or even cold LinkedIn, where the goal is to have a huge list and just to send out a bunch of messages in the marketplace and [00:30:00] see what comes back.

Gift-Based Outbound is kind of the opposite end of that spectrum where it is really a tactic for building relationships with high value [00:30:10] prospects in a vertical market. So instead of having a huge list, you have a small list. Instead of sending, you know, a bunch of random stuff out before you even look at the [00:30:20] prospects, you actually wanna study the prospects,

you want to send them something that's extremely thoughtful and insightful. The result of which is that you stand out and you communicate to these [00:30:30] VIP prospects in your market that you are a peer, that you have something interesting to say, and that you genuinely want to connect with them.

And so it is a [00:30:40] strategy that I think compliments things like content marketing and paid media and you know, SEO and all these great things. That is all great, but those are [00:30:50] heavily reliant on people who are coming, inbound, people who are actively shopping in the market. And as we all know, only about 3% of a market is coming [00:31:00] inbound at any quarter.

So it's a very small amount, and usually the people who are coming inbound or making a change with their agency, usually they have a short list [00:31:10] of agencies who they already have in mind.

[00:31:11] Arlen: The top two or three considerations.

[00:31:12] Corey: And if you're not on that list, it's very hard to break through. Yeah, exactly. It's very hard to break through, which is why either you could just [00:31:20] rely on your content marketing, put out more podcasts, or TikTok videos and all these great things.

Or you can do something like a Gift-Based Outbound where you are doing a, let's [00:31:30] call it a dream 100 list, where you're trying to un uncover and discern in the marketplace who are the high value prospects that maybe are [00:31:40] something I call taste makers, right? They have a lot of social currency in the marketplace,

and target them with very thoughtful physical marketing [00:31:50] assets to help build a relationship with them.

[00:31:51] Arlen: I resonate with that a lot. You might remember, I dunno

if I shared this with you, but as, as I explored Gift-Based Outbound, went through a great workshop you put on [00:32:00] on this, I think one of the challenges for a lot of agencies, depending on the vertical they're pursuing is, can be really hard to figure out how to get physical things two [00:32:10]people today, right?

Like If you're pursuing an enterprise with an office, then getting an address might be pretty easy. You know, you can get that into somebody. But [00:32:20] since the gift is sort of the way to break through, if you have to chase an address and get someone's permission to send them something, then in some ways you've defeated the purpose [00:32:30] of the gift in the first place, right? Like you're already havign to fight for that.

[00:32:31] Corey: That's right. Can't ask for permission.

[00:32:33] Arlen: I'm just curious if you've had clients who have explored, and maybe it's not even direct, but like digital [00:32:40] strategies of giving something meaningful that's not gimmicky, but putting things out in the market maybe in direct ways to people that are [00:32:50] clearly not a direct sales tactic, right? Like it is building...

[00:32:53] Corey: Yeah. 

[00:32:53] Arlen: a relationship. It's giving something that, of course to sustain a business, you're gonna need to build customer relationships. But [00:33:00] that specific thing you're giving them, is not a direct path to a sale. 

[00:33:04] Corey: Yeah, yeah.

[00:33:06] Arlen: But maybe you can get their email, you can have other ways of reaching them.

[00:33:08] Corey: Yeah, certainly. 

[00:33:09] Arlen: Maybe you don't [00:33:10] have an address.

[00:33:10] Corey: Yeah. Yeah. Certainly being able to add value to people's world digitally is a great way to build relationships. For example, you [00:33:20] can invite someone onto your podcast. You can send them thoughtful research or things that would be helpful or, or really introduce them to people that could be helpful.

All [00:33:30] those things could be done remotely. The benefit of sending a physical gift is that it's physical. It includes all five sense senses in some respects, right? You have the smell [00:33:40] taste in the case of cookies or cake or these other things. 

Sound and vision, and so it becomes a much more real communication that is much more difficult [00:33:50] to ignore than digital emails. 

[00:33:52] Arlen: Like clearly it's uncommon, right? 

Like a thoughtful gift that isn't swag or something. 

[00:33:56] Corey: Correct. 

[00:33:57] Arlen: People do this very rarely. 

[00:33:58] Corey: Exactly. And [00:34:00] yeah and to, to that point, it is absolutely critical that it is unique, it's striking, and it leaves a lasting [00:34:10] impression. Because if you do send out like a logoed pen or even a Yeti mug with your own logo on it, not theirs, but your logo, chances of them, of it [00:34:20] having the impact that you want, which is again, to initiate a relationship... 

[00:34:23] Arlen: hmm. 

[00:34:24] Corey: is very low because it seems as less genuine. 

[00:34:27] Arlen: That makes a lot of sense. One more thing to dig [00:34:30] into is what if you already are an agency working in a vertical, like you mentioned Nicole earlier, that you have a lot of experience there, but you find, hey, this is [00:34:40] not gonna get me to where I want to go.

[00:34:41] Corey: Sure. 

[00:34:42] Arlen: So I need to pursue another vertical, but I don't have, I haven't been a generalist.

I don't have a lot of things to draw on, so I'm starting from scratch. 

Do you feel like your [00:34:50] three-step approach there can still work to help keep you, you know, on, on the path in choosing...

[00:34:57] Corey: Yeah. 

[00:34:57] Arlen: a vertical, even if you don't have all that in-house intel [00:35:00] on...

[00:35:00] Corey: yeah. So... 

[00:35:01] Arlen: different verticals you've worked with?

[00:35:01] Corey: If I was in that situation and I had less data, I think the,of the three steps, the one that's gonna be the most important. I say those two are important, but the caring, because [00:35:10] as long as you can have evidence that other agencies have been successful in this vertical market and there's enough of the businesses around to, to really find your own space in that [00:35:20] industry I think the last ingredient that's required is, how could I find an emotional connection with this industry so that when I go to the conferences, I'm genuinely reaching [00:35:30] out, I'm genuinely introducing myself? And yeah, it may take a couple of years for me to really build up my credibility, my reputation, but I'm willing to go through that because [00:35:40] I know that I'm gonna be here in three to five years. 

[00:35:43] Arlen: Yeah. You care enough that you're willing to go through that sort of slog...

[00:35:47] Corey: That's right. 

[00:35:47] Arlen: to get to the otherside...

[00:35:48] Corey: Yes, yes, 

[00:35:49] Arlen: And it's worth it. 

[00:35:49] Corey: [00:35:50] Yeah, exactly. 

[00:35:51] Arlen: A few things. I mean, in marketing as in everything in business and life, there's often a scale that you have to think [00:36:00] about and trade off. So as I'm sitting in a gross seat in an agency, we're often thinking about, you know, how well do we do this thing that we're doing, right?

We're building a list, or we're [00:36:10] crafting messaging, or we're developing you know, selecting a gift that we're gonna send or whatever it is. 

We have to make a lot of assessments there. [00:36:20] And so if someone is entering a new vertical they're maybe even not at that commitment stage yet, but they think, Hey, this is a vertical I can care about. There are some [00:36:30] other seemingly really successful competitors, which to me is always a wonderful sign. Like, I want to see other companies doing well, where I wanna play and it seems like I can build [00:36:40] a successful business financially here. So you've put down that basic framework, maybe even you've worked with a couple of clients, but you just don't have the pattern yet.

When you're faced with these kinds of [00:36:50] decisions or guiding clients things like, you know, Robust, so you, you've really done your homework well. You've built that landing page with a lot of thought and research verses quick [00:37:00] and iterating. How do you make a decision like that, you know, what approach do you take to these trade-offs early on?

[00:37:07] Corey: What I would suggest. As another [00:37:10] way to get more clarity is to go speak with subject matter experts in that industry.

And regardless of what industry you're targeting, whether it's restaurants or [00:37:20] elder care or plumbing, there are people who service that industry, whether they're consultants or authors or coaches and whatnot who are [00:37:30] deeply immersed in that world.

You'd be surprised how much you'll learn in a lunch or a coffee with a person who's immersed in their world because we all have [00:37:40] assumptions going into these type of decisions. So the clearer you can get from other people who have been already in the space where you're trying to enter into is amazing.

You get so much [00:37:50] wonderful clarity that in many respects will either validate the decision or you may walk away from that conversation saying, you know, I thought it was one thing. I found out it's another, and [00:38:00] this is probably not the right thing for me.

[00:38:01] Arlen: Can you think of two or three questions that you would be asking someone in that kind of setting? What would you want to know from someone who has deep experience [00:38:10] in a vertical that you're looking to pursue?

[00:38:11] Corey: So a couple things come to mind. Who are the people that I need to get to know and to build relationships with in this industry that will [00:38:20] help me to accelerate my growth?

Number one. Number two, where's the watering holes? What conferences do people go to?

The people I wanna attract, you know? And quick story, [00:38:30] when I was working with a client who was targeting the restaurant industry, same concept where they were a generalist and they decided to go into restaurants through a [00:38:40] conversation with a subject matter expert, we got insight into a off, sort of off market conference that was off the books, but it happened to be the one that all of the biggest [00:38:50] influencers and the business owners would go to. No one talked about it, but you had to know. And as a result of this SME, we were able to get my client, the CEO, an invitation to go to this [00:39:00] very exclusive, private thing, which led to a relationship with a gentleman by the name of Danny Klein.

Danny Klein is the editor of QSR Magazine, which is a, [00:39:10] apparently the most well-respected industry magazine, and that led to media coverage, introductions and so on and so forth. So that's a sort of a real world example [00:39:20] of, you know, what we were able to harvest as a result of a conversation with the subject matter expert.

 And I would also just try and get a sense of who are the biggest competitors in this [00:39:30] space? Who else is doing this for this industry? Who's the most well known? Who's the most well respected? So you can get a sense of who you'll be compared to in the market.

[00:39:40] marketplace, 

[00:39:40] Arlen: Yeah, that makes sense. So not, who I can Google, but who people actually talk about. 

[00:39:45] Corey: Right. 

[00:39:45] Arlen: And people deep in the space really respect and look up to.

[00:39:48] Corey: Yep. 

[00:39:49] Arlen: Yeah. That makes a lot [00:39:50] of sense. So the last question in sort of that scale is when do you persist and when do you pivot? If you care about a space and you feel like, Hey, I could invest here for years. But [00:40:00] you're still testing the waters, right? Like you're still learning.

[00:40:02] Corey: Yeah, 

[00:40:02] Arlen: You're still feeling it out...

[00:40:02] Corey: Sure. 

[00:40:03] Arlen: What are some of the signs to you that say, Hey I had these assumptions,

the research was done. It looks good, [00:40:10] but probably we should pivot and actually say, let's pursue a different vertical?

[00:40:14] Corey: I would say that if you have evidence that other people have been successful in that vertical market. 

Then it's [00:40:20] just persistence, right? They've already proven that it's possible. The time when you want to think about do we pivot or do we make a change, is when the [00:40:30] industry itself is in a massive transformation.

So an example is higher education, which some may argue is going through a transformation [00:40:40] in that we have AI, we've got all these different forces happening in that world. And so as a result of that, these large universities are maybe not paying as much [00:40:50] agencies as much, or maybe holding back budgets and so on and so forth.

There may be signs of a more fundamental change, and so you could do make a decision, one of two things. You could either [00:41:00] say, okay, do we want to go find adjacent markets that we can kind of cobble together a story? 

[00:41:07] Arlen: Take our expertise a bit.

[00:41:08] Corey: Expertise to be able to that are [00:41:10] not subject to the same transformations, or, and this is an interesting one. Do we use this opportunity to consolidate the market? 

[00:41:17] Arlen: Hmm. 

[00:41:17] Corey: Do we go in and buy out our [00:41:20] weaker competitors Who maybe are getting hurt because they're not as financially stable, maybe don't have as much revenue coming in? And that's exactly what happened [00:41:30] to someone I interviewed on my podcast. Higher education, big market pullback on budgets and whatnot.

And he decided through, kind of going through this thought [00:41:40] process, do we make a shift? Do we change industries? He tested government, interestingly enough and got a bunch of government contracts and he decided that's not for us. It's not who we are. [00:41:50] But then it occurred to him that, Hey, we should actually go in and double down.

Let's go. Let's go acquire some other agencies. The other thing he did in this specific case, which I thought was interesting, is that. [00:42:00] The university's, you know, digital marketing team is different than the internal sort of web, website design and web, you know, web facilities of a university.[00:42:10]

And so what he did is he not only acquired his competitors, but he also acquired agencies that focus on that aspect of running a university, which is the [00:42:20] internal marketing and the internal website. And so not only did he consolidate the market, but he also expanded the value he can create to within the ...

[00:42:28] Arlen: For the same clients. 

[00:42:29] Corey: Same clients, [00:42:30] yeah.

[00:42:30] Arlen: Yeah. So the short there is if it's proven that this market has a place for an agency like ours, then [00:42:40] persist because odds are, you can make it, you can make it work. Unless there's some really big market changes and you say, you know what, I'm not really in for this ride. Maybe [00:42:50] it is an opportunity to consolidate or to actually disrupt yourself through that transformation. But if not, then maybe that's a reason to reconsider. Great thoughts, Cory.

[00:42:59] Corey: Well said. 

[00:42:59] Arlen: [00:43:00] So looking ahead what are you most...

[00:43:01] Corey: Yeah. 

[00:43:02] Arlen: excited about in your journey?

[00:43:03] Corey: I'm very excited about the future of this industry because of AI, because what it [00:43:10] does is unlocks the ability for us as consultants and agencies to be able to be much more consultative in our approach and solve much more profound problems. [00:43:20] So I think that's a real wonderful thing for the industry.

It's gonna increase the value that my clients and myself, frankly, are gonna be able to have. The impact will be more [00:43:30] profound. So that's what's exciting me in the future.

[00:43:33] Arlen: Less time on the mundane and more time actually on the strategic.

[00:43:35] Corey: Less hands, more, more judgment. 

[00:43:37] Arlen: And what are the best ways for people to, to follow your [00:43:40] work and to stay in touch with you, Corey?

[00:43:41] Corey: Yeah, Arlen. Well, what I'd love to do is I'd love to offer your listeners a free copy of my book.

And this book, it's called [00:43:50] "Anyone, not Everyone", and it is my five steps to escape founder-led sales, and talks a lot about the deep specialization flywheel, but [00:44:00] it is very practical, hardworking book that gives you a very simple way, the steps to be able to get out of these sort of the the generalist trap and to be able [00:44:10] to empower your agency to really scale.

Your listeners can go to anyone not everyone dot com. And they can listen to the full audiobook for free. It's the same audiobook that you buy [00:44:20] at Audible. 

[00:44:21] Arlen: Yeah. 

[00:44:21] Corey: But you also get a digital workbook, which includes videos and templates and all these really great resources for you. It's all free. You just go there now.

[00:44:29] Arlen: [00:44:30] Awesome. We'll put that in the show notes so people can...

[00:44:31] Corey: Thank you. 

[00:44:32] Arlen: take advantage of that and take a deeper dive into escaping founder led sales and deep specialization.

[00:44:37] Corey: That's it. 

[00:44:38] Arlen: So [00:44:40] fantastic. I really appreciate you taking the time to chat today, Corey 

[00:44:42] Corey: Yeah, Arlen.

[00:44:43] Arlen: And to share some of your journey.

[00:44:44] Corey: Thank you. It's been fun.

[00:44:45] Arlen: For those of you listening, are you facing a challenge with new business in your [00:44:50] agency, or would you like to talk through an aspect of your new business strategy? I'm sitting in that seat day to day and I'd be happy to be a thinking partner. So send me a message on LinkedIn. Or [00:45:00] grab a 15 minute call via my profile of the show notes and we can chat. And thank you for joining us for this episode of the Agency Health Podcast. 

You'll find key [00:45:10]takeaways and links in the show notes. And if you found this episode valuable, consider subscribing and sharing. Take care and be well. Alright.