Hello everyone today, I'm joined by Megan Bowen. Megan is the CEO of Refine Labs, and if you are in the B2B marketing space, it's almost impossible not to have heard of them. Megan is incredibly knowledgeable, not just in marketing, but in leadership and agency operations. So I was very excited to get into this interview to hear her perspectives on the future of agencies.
In this episode, we discuss how buyer behavior has changed and what that means for agencies, becoming the leader of an agency as a non-founder, CEO, and structuring your business as a talent destination and more. Today's episode is brought to you by Zenpilot. There are lots of tools out there for agencies to manage projects, but any project issues aren't usually caused by the tool, they're caused from your own processes. Zenpilot helps agencies implement their project management tools while streamlining operations.
So your team can move from chaos to clarity. You can see for yourself at zenpilot.com. And now, without further ado, the great Megan Bowen. It's easier than ever to start an agency, but it's only getting harder to stand out and keep it alive.
Join me as we explore the strategies agencies are using today to secure a better tomorrow. This is Agency Forward. Buyer behavior has changed in recent years. I guess how has it changed and how can agencies work with that?
Yes, buyer behavior has changed a lot. What, when I have this conversation with people, I like to ask them how they like to buy. I like to ask them describe the last time that you bought something and it doesn't need to be a B2B software product, right? It can be any consumer product or anything that you're interested in.
It typically involves a set of key activities. You are doing some research online. You are reading reviews from people like you who have used the product. You are talking with your friends or your trusted peers to find out if they've used the thing and if they liked it or if it did what it promised that it would do.
Only if you really, really need to are you actually going to engage in some type of formal sales process or sales conversation in an ideal scenario. Maybe you would never talk to anybody and just buy that thing online, especially from a consumer product perspective. That's how most people like to buy stuff. Does that resonate with you, Chris?
Is that how you buy stuff or do you take a different approach? Yeah. In recent years, I've really sat down. If I want to buy something big, I'm not doing this over a too fresh.
But just thinking, what am I actually trying to solve by making this purchase? And then using that to guide my exploration and discovery through all the brands. Great point. Anchoring on the Y.
What is the goal I'm trying to achieve? What is the problem I'm trying to solve? I think that makes total sense. Yeah.
I think a lot of times I get some money with people where it's like, I think I'm trying to solve this. But that software solution is not going to actually solve that problem if all of your internal processes are broken, things like that. So what are we actually trying to solve here? Yeah, I think it goes a long way.
Absolutely. Yeah. And those people will agree with that when I explain that. Yeah, that makes sense.
Yeah. That's how I buy, yeah, in a B2C or a B2B context. However, then you kind of, OK, now I'm in charge of hitting a revenue target. Now I'm in charge of a pipeline target.
And what am I going to do to achieve that? And when you're in a pressured situation with a big goal to hit, you then just say, well, this is what I've always done. Or this is like the playbook for taking your product to market. And I'm just going to implement that, which is typically, the way I describe it is like the playbook that people adopted back around 2010, give or take, and have been really using ever since.
People will acknowledge and agree with what I just described on the change in buyer behavior. However, they will simultaneously set the strategy and the tactics that are 10, 20 years old because they feel like they have no other choice. And so people hold these contradicting troops. And I see that over and over and over again.
So even though people know better, people haven't actually made any changes to what they're executing. Yeah, so I do see similar things happening. And I think because the focus changes, it moves from how can I be customer centric doing what my potential buyers need and more, how do I move this number on a spreadsheet? And when you start focusing just on the spreadsheet, you're missing the whole point of everything we're trying to do here.
And I think everybody falls prey to that on some level. But if you can catch it early enough and you learn the positive lesson, then yeah, it shouldn't be a problem. Yeah. And the other point I like to make is just because I talk about this change so much and obviously have a big focus on a perspective on how people should be thinking about their marketing strategy, it doesn't mean that there isn't a place for outbound sales.
Like, yes, many companies should deploy outbound sales strategies. And many companies will have a lot of success deploying those strategies. But to think about it in a new and a different way, and in a way that acknowledges the new reality that we're in, while also making sure that you're making appropriate investments in a strong marketing and demand and inbound strategy so that you're not solely reliant on outbound. So that's the other nuance here.
I'm not suggesting that nobody does any outbound sales, which is another question I get a lot when I talk about this. Yeah, when I set into running my own company, one of the things I kind of told myself was like, you will not go and it wasn't necessarily because I don't think going works and there isn't a place for it. But it's like, what if I could just talk about the problem with such a level of detail that it resonates with my target audience and they come to me? Because they know, hey, if I know this problem as in depth as it sounds, right, I probably have a solution for it.
And so let's at least have a conversation about it. That's the same approach that Chris and I took to build Refine Labs. And because we were bootstrapping the company and we had the long game mindset, we were OK with growing at a slower pace, if that was the outcome of that. So it's just also the trade-offs, right?
What situation are you in? What are the goals that you've set? Why have you set those goals? My preference is always to be in a position where you can set realistic, aggressively achievable goals and deploy a customer-centric strategy to hit that.
The reality is, is there's a lot of real life situations where those conditions are not true, right? So if you do get a huge injection of investment from a VC or a PE firm, that typically comes with strings attached. And those strings are high quarter over quarter, year over year growth targets. And in many ways, I've definitely been part of those companies.
And I've seen that, yes, you can, in many ways, through brute force, hit some of those short-term targets. But if you're not thinking about it in the right way, it's not going to be sustainable. And then there are other trade-offs, like really high customer acquisition costs, or other things that can come up. So it's just recognizing the set of conditions that you're in and designing a strategy that makes sense relative to what you're trying to do.
But at the end of the day, what I always ask people is, if ask yourself if the tactic that you're deploying would work on yourself. And if the answer is no, you might want to be rethinking that tactic. I love that you brought up trade-offs. I like seeing it as debt accrual.
Like you're going to take on debt in some place, no matter what you're doing with your business. If you over-focus on marketing, maybe sales has a little more debt. We've got to go make up ground later, our attention went somewhere else. If you're taking funding, right now your debt is coming from having a financial obligation back to investors, but it means you get to go faster in other places.
And so just like what is that trade-off that we want to make right now in order to advance a business? Absolutely. And then the other thing I think is so important is, what is your business? What problem are you solving?
Is it a need to have? Is it a nice to have? Is the problem big enough where it's going to warrant the growth targets that you have? So I think people just kind of go into this thinking like any company, you know, with any type of customer, any offering or any product in any market or industry, you just apply this and it works.
And there's so many nuances to it. And no matter how good your marketing is, if your product sucks or nobody needs it or your target market is too tiny, you're going to hit ceilings with growth, right? And so I think I like to bring this conversation back to a lot of like core business fundamentals, because it's not just about marketing or sales, right? All of it matters and having that context is really important.
Yeah. I want to go back to one of the specific words that you used for raising with essentially setting the conditions where I think I'd read, I'm pretty sure it was your content, but your role at Refine Labs is to set the conditions for your team members to be successful, right? To be able to do their job. Now that's something, like I was in the Army for like, after 37 years, and that was one of the big pieces of being an infantry officer was like, set the conditions, like don't go run into that house, right?
Unless you know, like you have all the right people aiming at the house to protect you and things like that. And so often we'd have to take like, what we call tactical pause, make sure the conditions are set and then advanced, but it became very much like, should look at the conditions, look for the conditions, make sure that they're where we need them to. What got you into like, it's thinking like that and looking for those conditions to be able to set. Yeah, well, especially, I mean, in any company, this matters, but even more so in an agency, your team and your people are arguably the most important thing because they become, you know, they're a human, but they become the product in a way.
And that's not meant to, you know what I'm saying? Like they are the service, they are the person interacting with your customers. It's not software, right? That your customers are buying, they're buying the expertise and the exposure and the collaboration with your people and your team.
And so the typical agency, you know, trope is that you get work to the bone, you work 80 plus hours a week, you know, they're just trying to get as many billable hours out of you as possible, they don't care about your wellbeing. It's really all about hitting the bottom line and getting, you know, as much out of every person as possible. And that's not a sustainable approach. And so when you think about how do you create the conditions for your team within a service agency to be successful, there are a lot of components into that formula that really, really matter.
Obviously, you wanna make sure that from a baseline of skills and experience, you know, an expertise that they have, what is required to do the job, right? So that's some baseline information. But a big thing within agencies, I think, is enablement. So how do you provide your team with enablement materials and tools and documentation to aid them and make the service delivery as seamless as possible where they're spending the most of their time on in their zone of genius and in their subject matter expertise versus other things because you haven't invested in appropriate enablement?
How are you thinking about designing your pricing and your business model so that an individual person can work with a book of business that can be serviced within 35 hours in a week? And in a way that allows them to have appropriate downtime and balance, acknowledging that beyond client work, there's other things that happen in a company and making a little space for that every week. How are you creating growth opportunities so that as you continue to scale your agency, your best people wanna stay and have opportunities to continue to grow and advance in their career? How do you take the time to understand what your team's long-term career goals are and how do you help them get there and make them feel that their time spent at Refine Labs for this period of time is gonna be valuable long after they leave the company?
And if someone does want to leave, how do you make that a good experience because people talk and how you treat people on the way in is just as important as how you treat people on the way out. No one's gonna work for a company forever. And so I mean, I could go on and on about this topic, but those are some of the most important things when you think about creating the conditions for your team to be successful. And what I've found is if you focus on that, then it translates into your team doing what is best and what is needed for the customer to drive those customer outcomes that you're trying to drive.
We had a particular instance in Refine Labs history. This was in like late 2021 where we were burning our teams out, or the demand for our services kind of ballooned in a period of time and we were doing the exact thing that I just said we don't want to do. And we had to take a hard look at what we were doing. We had to start breaking up books of business.
We ended up deferring new business for almost three months so that we could recalibrate and load balance people's books of business with signing contracts for start dates like 90 days out. So I was like, I can't take you because I'm not gonna burn my team out to serve you, right? So we kind of, even with the best intentions, you can get caught in a situation where that's happening. And the trick is you have to be able to know when it's happening and then you need to do something about it.
And if it means that you have to defer revenue growth to maintain the integrity of the team, then in my opinion, that's always the right choice to make. Yeah, I get a lot of directions I want to go with this. So I guess the first one was rather the quicker question and answer. So you probably saw even through that later stage where you had to have to defer different clients and stuff, it kind of really goes into the thinking of when demand is high, you can cut supply, now increase your rates, that kind of facilitate any other growth for you, like to be able to bring on more people to run their own books of business within the agency.
Yeah, so I mean, we've used all those levers. So when demand exceeded supply, we absolutely increased prices. That worked to a degree. The flip side of that is, I think in a period of maybe artificially high demand, we took it a little too far and then had to kind of recalibrate as the market, kind of recalibrate it itself.
But price is absolutely a lever, right? And when any agency owner should be thinking about in that regard. The second piece is like, yes, as you're growing, I think the hardest thing about an agency is managing demand and supply, right? Like you don't want to overextend and have too much supply because then that puts a ton of pressure on the business in cash flow and margins.
However, you don't want to be late to the game and then not be able to grow because you don't have the appropriate team in place to take the business. So it's one of the hardest things. One of the things that I've been testing or that I'm starting to experiment with this year is a more flexible kind of employment agreements to acknowledge this sort of difficult balance that exists. And so what my hypothesis is, what if we had a bench of part-time consultants that we put through our normal onboarding process and but are not a full-time employee and begin to integrate them into projects or client work.
And if they like it and they do a great job and we continue to grow over time, moving them into a full-time position when the business allows. And so it's more of, it's a different way than just, okay, let's get another full-time person. It's like, well, and in today's day and age, there's a lot of people that are actually very open to that type of an arrangement. Maybe they have some side project that they're working on and they're excited to like, hey, you know what, maybe this is good for me as a potential employee or a consultant to see if I like this type of work.
And if we mutually agree it's working and there's enough demand for me to have a full book of business one day, great, that might be the natural outcome here. So trying to think about different ways to structure employment consulting agreements to manage that more effectively. So those are some of the things I'm trying this year to make it a win-win-win for everyone involved. I like it, because it lowers the investment for everyone.
It makes it just a quicker decision to be able to let people in, see if it works out for everybody and then advance from there. And my guess, so you guys do a great job of talking like being a talent destination, right? And my assumption is that you don't have a shortage of applicants coming in at any given time for people who want to work with refined labs to be able to add that to their resume. And to learn how you're actually doing these things for your clients so that they can then grow with it and even take that on later in life.
How do you filter out all of the applicants and everything? Yeah, it's a great question. We are very fortunate that there are a lot of people that are interested in learning our methodology. We actually recruit all of our team members from B2B SaaS companies.
It's really important to us that we're almost like the first agency that anyone has ever worked with because we want our team members to have the experience that our customers are going to have. So that's one sort of requirement that we look at. And I also know that I've had so many people that have come in as a director of demand-gen here tell me, my intention was to come in and work here for 18 to 24 months and then go back in-house. I wanted my tour of duty at Refine Labs to my boot camp to really learn and understand the approach, but I never intended to work at an agency for the long term or for the rest of my life.
And I'm like, great, that's totally cool with me. I'm totally happy for that to be the case. And so we do want people that have real experience in beauty SaaS. We find that is a key ingredient for them to be successful.
They don't have to have fully implemented our strategy before, but they have to understand it, whether it's because they listen to the podcast or follow our content or they have had an opportunity to actually implement it at their company just on their own and or whether again, like our content, the podcast or the vault, they kind of know our playbook and have tried it. We really look for people that are strategic and analytic because a lot of the work that we do is not just about following a prescriptive playbook. You have to be able to understand the context of the company that you're working with and apply the overall framework and methodology to that company. And someone that is, and I tell people, it is hard to work here.
It is an intense environment. We care about our team. We do everything we can to create good conditions, but it's not an easy job. It's a hard job.
And it's hard to work with customers. It's hard to work at an agency. So I think people that are, people need to understand that and be ready for the challenge. And we have a pretty good interview process that we've cultivated over the years that allows us to really not only from our perspective, vet experience and skills and aptitude, but also give the person an opportunity to really understand what they're gonna be signing up for and if that's actually what they really wanna be doing.
Right, awesome. I wanna shift gears now too. So I had taken over as non-founder CEO for an agency and we had run into some hurdles of the founder handing over the reins. We worked through them, we figured it out, but I'm curious, that transition for you was probably unique as most are, but I guess what advice would you have for agency founders who are looking to bring in and see what are some of the things they should be doing in order to make sure they're not running into as many hurdles?
Yeah, I think, so one thing I'll say is, Chris and I worked together for three and a half, almost four years before I took over as CEO. So by the time I stepped into the position, both of us very much understood one another, we understood the approach, we both understood where each other's strengths were. And so I think like, there's something to be said for having like that history or a period of overlap where both people are actively working within the agency before the official handoff. I would say that probably was one of the big reasons why I think our transition in particular has been really smooth and successful.
I recognize that can't be, that's not true in every scenario, but even if a founder or CEO is thinking about bringing another CEO, you should be really thinking ahead and having a long-term succession plan and trying to identify who that person is and have as much overlap as soon as possible. I think the other key is, you need to have some conversations about what the new working relationship is gonna be like. And I get it, if you're a founder, the company is your baby, right? Like it's yours and it is really hard to let go of that, right?
But if you wanna bring in a new leader, it's really important that they have the space and the independence to do what they believe is best, right? Presumably you've identified this person and you believe that handing them the reins is gonna be the best possible outcome for both of you and the company and the customers. And so I've been in other situations where I've seen maybe a founder want to hand it off, but then kind of come back in because maybe things weren't going as planned. But I think that's really important to have a direct conversation about that and have some clear guardrails about how that person's gonna be involved, when they can chime in, to ensure that the new leader isn't undermined, or gets frustrated.
I think the other piece of it is, I've done a lot of these podcast posts the event and most people ask me without hitting record and they'll just be like, oh my God, what was it like to take over from Chris? You're filling big shoes. I think it's like, you don't have to be like your predecessor. Like I am who I am, Chris is who he is.
We're very, very different people. And I'm just leaning into my approach. Like Chris made this decision for a reason. Like I'm not gonna try to emulate him or be him because that's not me.
And it's not that either of us are good or bad, we're just different. And I think that's actually a great thing. And so I think lead how you believe to be lead, like trust in your instincts, have confidence, do what you believe is best. So I think those are some of the big things that I would call out that I think are really important when you think about the type of transition.
Yeah. So I like looking, so you have the visionary integrator combo from EOS, right? I've always liked viewing them, I guess as more of a revenue generator and a profit optimizer. And I think as at COO, right, you're in more of the profit optimization type role.
But then did that shift at all? Like did you move into revenue generation as your primary role as COO? Or were you more of a, are you feeling kind of like an executive? I'll say do her, but like, you're paying more attention to some of the stuff that a COO might pay attention to just because you have that experience and knowledge.
Yeah, it's a great question. So yeah, I do, I love the visionary integrator combo. I very much would say when Chris and I were operating as when he was COO and I was COO, he was definitely the visionary and I was the integrator. I've actually had to be really intentional with not doing stuff.
And so I was able to elevate someone that had been at the company for two years and sort of the COO, COO positions, same tag, he's awesome. And he really is so strong that I have been able to truly delegate all of that function to him. Chris and I, the way that we divided roles and responsibilities I think was a bit unique because I think in many ways we both had our hands in revenue generation and profit optimization. In many ways we were like co-leading the company but he had clear strengths and I had clear strengths that we leaned into.
And so what I'm trying to focus on is being like my version of a visionary which is gonna be different from Chris's version of a visionary. And what I've realized is it's less about, delegation is important. What I was thinking about a lot as we were coming into this year knowing that this, Chris and I planned this transition for almost a year before we announced it externally. I was really getting a lot of thought to, when I move into this role, how are we gonna make some other changes to other people's roles to really put the right people in the right roles?
And I think one of the things that we got right was making a few key adjustments to some key positions in the company, including who the new COO CFO is, and we put the right people in the right roles. And so it allowed us to start the year off strong. And so I think as a CEO, yes, you have to delegate and not get stuck in the weeds, but I think if things aren't working, I would look at do you have the right people in the right roles? And it's not necessarily that someone needs to leave the organization.
Maybe their set of responsibilities just isn't aligned to their strengths. And how can you divide roles and responsibilities across a leadership team that really lean into each person's strengths? And by making some small adjustments and aligning goals and incentives, I think we're able to create a really strong leadership team coming into this year. That is advice I can fully get behind.
So. So a question that's probably burning on everyone's mind is around AI. I guess, how are you guys viewing AI? Every fine labs, what are some of the things that you're doing to kind of get ahead of it and make sure it's not something that just completely disrupts what you're currently doing and throws things off?
Yeah, totally. I mean, I was definitely one of those people. I think I saw the Sam Altman article was like, like generative AI is gonna make 90% of marketing agency work, obviously in the next five years or something, spending the article to my team. I'm like, guys, what are we doing about this?
You know, and having some brainstorming sessions about, all right, like, how are we gonna integrate AI into everything that we do? So we've definitely been talking about it a lot, but kind of where we landed was, I mean, at this time, there's absolutely, you know, low lift ways to integrate it into workflows, just as an enablement tool, really, right? Not really a replacement. And so, you know, the team, our teams here are experimenting with that, you know, and just kind of a normal course of our service delivery and the way that we do things.
We did integrate AI into our content product called the Vault, specifically to help with content discovery and help people that subscribe to that product get the information that they need. That's been a great utilization of it because one of the common pieces of feedback we got from our customers at the Vault was that it was sometimes hard to find something specific. So that was a great use case of integrating that technology into this product dramatically improved the user experience. Awesome, cool.
So that's probably like the most tangible example I can point to where we've integrated it in a way that greatly benefits our customers. But I'm still, I'm actually like taking a step back because I don't, I think AI is cool and it's awesome. I think it's still early. I don't think it's gonna replace people in a marketing agency in the near future, certainly in the longer term future, who knows, right?
But instead of getting caught up in the hype, I'm trying to take a more measured approach to really how is this actually gonna help? And it's less about like, oh, can we do something faster and quicker or more efficient? And more like the Vault example, how can we leverage it in a way that's actually gonna improve our customer experience? So, jury's still out for me.
It's something that we continue to talk about and think about, but trying also not to get caught up in the shiny object syndrome. Well, I think that's a better way to look at it because a lot of agencies are probably focused on the tactical deliverables and how AI now lets them do it faster, but without kind of realizing that makes you a little more replaceable. If AI is doing all of your work, that might not be the best way for you to sit versus how can I just create the best customer experience? And then now people are still gonna go to you because that experience comes from you and the people, tying back to the talent destination, right?
But those people that you're building up and giving them the skills, like it's their expertise that people want. Yeah, it's awesome. So, I guess what advice then would you have for agencies just in general, as they start looking at the future, and things that you've noticed in market changes that they should be aware of and buffering for? Yeah, I think, and we try to integrate this into our service as best we can, but I think that the most successful agencies of the future are gonna be the ones that are helping customers solve like core business fundamental problems that they have.
Do you have the right product? What's your positioning, your messaging, your overall go-to-market strategy? So many companies still lack really solid basic business strategy. And it's fairly easy to spin up a content marketing agency or a personal branding agency or even a paid ads agency, and something that we really try to focus on.
It's like, we're not just gonna run ads for you. We're gonna try to be a strategic partner to make sure that you consider your whole strategy, that you look at all of your data, that you make good decisions, that you define a great strategy, that you identify if you have a root cause issue in a core business strategy aspect versus your demand program. That's how you actually solve problems and drive better results. And so, I think what's gonna be, and to the conversation we're just having about AI, the execution of tasks is gonna become more and more commoditized.
So, when you think about deploying a service, how are you deploying a service that is strategic, that can't be replaced by a machine today or tomorrow, that is actually helping solve the real problem versus just delivering a task and being paid for a task. I think that's gonna be the future of really successful agencies, is like truly differentiated strategic thinking that's focused on root cause problem identification and true problem solving. Right, yeah, it's definitely one of the benefits of being in an agency is being able to see these problems so frequently. Pattern recognition, yeah.
Now I know exactly what to look for when I go into a client engagement and especially if you're niche and you're actually working with a specific type, I say, oh, I think that's problem five times. Here's what we do, right, versus figuring it out on a whim. Awesome. So, I have two more questions for you.
First being, what book you recommend every agency leader should read? Oh, that's a good question. So much of my reading I do is more like personal, personal development focused. I don't read a ton of business books.
What I will say, I will give a business book. The book is called, Mastery by Robert Green. What I love about that, and kind of to the point I was making earlier about the future of agencies being really more around strategic thinking, is, and then the purpose of that book is to really walk through and sort of explain the thesis that in order to truly master your craft, it requires significant investment and repetition to really master your craft. And I think today that's a little bit of a lost art.
I think the way that the internet has become, every, people in the early 20s want to start their own business and position themselves as a master of something. And that's fine. I'm not saying people shouldn't do that. But I think there's something to be said for really dedicating part of your early life to truly mastering your craft and then figuring out how you monetize and build up a business based on that in a little bit of a later chapter.
I started my career being an account manager for seven years at a company in my 20s. And my subsequent career chapters accelerated very quickly after basically having the same job for seven years. But I really mastered my craft. And so I feel like that's an important message that I wish most people would think about.
That's all. Yeah, huge value in that. Last question. Where can people learn more about you?
Can find me on LinkedIn. I'm actually not a social media person. I've never had Facebook or Twitter or Instagram or any of those things. I am on LinkedIn because let's face it.
I can make money on LinkedIn. So you can find me on LinkedIn or obviously check out Refine Labs at Refine Labs. Awesome. Megan, thank you so much for joining.
This was awesome. Thanks for having me, Chris, for a conversation. That's the show, everyone. You can leave a rating and review or you can do something that benefits you.
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