Growing & Scaling an Agency with David Vogelpohl

Billable Hours

In this episode, I chat with David Vogelpohl, Vice President of Growth at WP Engine. Before joining WP Engine, David founded and ran his own agency Marketing Clique. Through his role at WP Engine, David is connected to thousands of agencies around the world and in this episode, he shares his thoughts on growing and scaling a successful agency.

Links

• David on Twitter
• WP Engine
• Flywheel Growth Suite

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Transcript of this episode (automatically generated)

Today I am really excited to have David Vogelpohl as my guest. David is the vice president of growth at WP Engine. Before joining WP Engine, David ran his own agency marketing clique. Through his role at WP Engine, David is connected to thousands of agencies around the world, and I can't wait to dive into today's episode where we'll be talking about growing and scaling an agency. By the way,
this is not the first time David and I talk on a podcast. One of David's many involvements in the WordPress community is as the host off the Press This podcast where I've previously been a guest, you can find David on Twitter at WP David V. Before we begin the episode, I want to tell you a bit about branch. Branch is my business, and the sponsor of this podcast.
It's the simplest way to set up automated deployments for your work per sites. We've got your back with recipes for all the common workflows that WordPress developers need making it super easy, and fun, honestly, to build out your deployment pipelines, it's continuous integration and deployment without the learning curve and it's free to get started.
So go check it out. And if you open up the live chat widget and identify yourself as a listener of this podcast, we'll double the amount of free deployments on your account. Yep. Twice as many deployments without paying, you can sign up for free on branchci.com. I started this episode by diving into David's own experience, running an agency, David, in your work WP Engine.
You work with thousands of different agencies nowadays. Um, but your background is also an agency and you had your own agency marketing click before you started working with WP engine with all. The things that you're seeing now, Adobe engine and all the thousands of agencies that you interact with at different levels, like, is there something you would have done differently at your own agency?
Kind of in hindsight, if you could. Yes. Hindsight's always 20, 20 Peter. So it's funny, actually, my agents. See, it was a vendor of WP engine. So before I actually joined WP engine directly, a WP engine was a client for actually many years since nearly the beginning of the company. But you know, when I started the agency, I didn't know anything about running an agency.
I guess I freelance, I guess you would say on my own for probably about three to six months and then hired my first employee within that six month period. And then eventually grew it to 22 employees. When I felt it was time to exit the agency world. After about five years, I decided to kind of shop my agency if you will, to see what sort of acquisition offers I could get.
And I would say the biggest thing I learned in retrospect probably was from that event. I think there's other like operational sides. Um, but what ended up happening is I did have an asset acquisition of the, kind of. Value of the business, if you will. But the multiples I got wasn't very high and the reason was because I didn't have established like long-term contracts with customers or like a recurring revenue stream baked into the business.
So that was kind of a nice little surprise on, I decided it was time to move into something else and looking back, I wish I had baked. Those elements into my business. We did have long-term customers who spend a lot of money each month, but they weren't locked into contracts. So that at the end of the day actually undervalued the business.
In my view, that's super interesting. And it really ties into, you know, the whole title of this podcast. I guess that's just a great lesson. And I think, you know, there's a book John Warrillow built to sell is. Exactly about this whole thing. Like basically, and we have a few of the episodes on this podcast as well about basically how to think about recurring revenue, maybe even stuff like productized services.
I don't know if that's something you've ever come across a productizing where you basically offer your services as moral, you package it as a product with different pricing plans and tears and stuff like that. Yeah, the maintenance packages, um, or a care packages, uh, site maintenance, like these kinds of offerings, this product is , it's interesting.
In my agency, we would have like big ticket customers, you know, like for us, we really wouldn't want to mess with anything, unless it was at least $5,000 of work. And then many of our clients were, you know, 10 or $20,000 a month. Worth of work. And so I often viewed those care packages as kind of not super helpful for the business.
In reality, though, productizing your services in that way, one can help you have higher margins, right? So you're not always having to do, you know, that amount of money's worth of hourly work to keep that customer in good shape. You can also leverage your technology and your systems to kind of scale that kind of work to further increase your margins, but also by having that kind of long-term value in your business that builds up over time.
I'm a little bit of a science nerd. One of my favorite topics are things called solar sales and the way solar sales work is they collect sunlight. And there's very little pressure of the sun's solar wind, if you will on the sale, but because there's no friction in space, each little push gets the spacecraft going faster and faster and faster, and you go to like insane speeds using this method.
Well, I think of that same thing within an agency business, as we think about these monthly recurring revenue care packages or maintenance packages or productized services, if you will, because each one of those, you add adds a little bit of pressure forward pressure, upward pressure for your business.
And so I think from the business strategy perspective, they actually make a lot of sense. And even though you may not make a lot. Per customer in that way over time, you can build that base up and have a lot more reliability in your business. I'm a big fan of them from a business strategy perspective, for sure.
Yeah, I love that metaphor. I think, you know, it just a good thing to remember about recurring revenue is you also have to provide recurring value, right. To justify the recurring ness of it. So it's just also is a good way to just keep in contact with your customers and, you know, keep the relationship going.
Yeah, I think so. I kind of shied away. It's it's funny. Cause like I ran the agency for five years and you know, tried a lot of different approaches, a lot of different billing models, hourly rates and so on and so forth. And when I realized at that time, which would have been 2010 to 2015, you know, even still today, there's this push around like, well, don't charge by the hour, like charged by the value, right.
Charge b...