We’ve been on a mission to move our entire agency to agile during 2016. We accepted that this was a long term move, one that would take us months to master. We started testing various components of agile marketing with different teams back in late 2015 and then made the decision, based on the results of our testing, to go all in this year.
In January, we moved project management systems, we reassigned resources, we trained our team on Scrum, we hired an agile consultant and started managing all our client engagements with Scrum as the core methodologies.
Here’s what our inbound marketing agency learned after two full months.
More To Learn
Generally, once I make my mind up, it’s full speed ahead. While I expected to stumble a few times with this massive undertaking, I didn’t know how long it would actually take to start to see the kind of dramatic results I was expecting.
What I found out early on was that I need to be patient. Almost every week presents a new metric we should be tracking or a new issue we have to deal with. We’re still transitioning clients off of old agreements and onto new points based agreements. Right now our biggest takeaway is that there is a lot more to learn and we’re going to need a lot more time before we see the kinds of massive improvements promised by agile. Twice the work in half the time is a big promise for an inbound marketing agency.
One of the first places the move impacted our business was pricing. We had a product catalog going into the transition. This made it easier to adopt point based pricing. We had value based pricing so taking a points model and applying it was also relatively easy. But pretty quickly we realized we had to change the way we were thinking about pricing. In essence, we raised all our prices on some servcies and lowered it on other to better reflect the value of the services we were delivering.
No matter how long it takes us to do something, we charge the client based on the value that services delivers to their overall engagement. Instead of delivering some services at a loss, now all our services are prices based on value.
Team Member Happiness
Almost immediately, our entire team became more engaged and happier. Team member happiness scores from mid-February were 7.8 and today they’re 8.2. That might not seem dramatic but any improvement in team member happiness is a welcome at Square 2 Marketing. The team enjoys the freedom to select tactics for our clients, they enjoy the collaboration they get from other team members and they get more wins in this scenario as they move work through the shop on a weekly basis.
About a month ago, we stopped tracking time and started tracking velocity or the number that represents the amount of work shipped to clients. This decision was scary initially but I was encouraged at the number of extra hours our team members had to do client work instead of tracking time.
In mid-February the team shipped around 800 points of work each week and today they’re shipping slightly over 900 points, a 12.5% improvement in about 30 days. I expect this number to continue to go up, but I don’t expect a 12% improvement every 30 days. Eventually it will level off, but when and what the number will be when it does—we still have to see.
As you’d expect, this is still a work in progress. We have seen some clients see improved results and others not so much. The data and the conclusions are still to be determined. The team is also in the process of transitioning to the more collaborative engagement and older clients are still receiving the more traditional engagement which is holding back our ability to measure the impact of agile across all our clients.
What I have seen is for the newer clients, the team is responding in a more dynamic way, they are adjusting more quickly to the program data and they are applying more thinking to their client engagements as opposed to simply delivering what was scoped out in the original agreement. This will produce better client results every single time. We just need more time to see this realized.
Other Key Metrics
We found out that every team is over committing every week. This is perhaps a reflection on their desire to deliver work to clients, they’re overzealous nature and that they’re still mastering the commitment part of their sprints. We’re working together to help them commit more realistically and then balance those commitments by making sure the client expectations are also realistic.
Their capacity to deliver work has also improved. This is a significant number and a reflection on the cross functional and collaborative nature of the new teams. In mid-February the capacity number was 698 and today it’s 830. Same number of teams, same number of people, but almost a 20% improvement in their ability to get work done.
We also saw our cost per point decline from around $67 to $54 which reflects our ability to deliver more work with the same team or even a slightly less expensive team. Delivering inbound marketing has never been the challenge. Delivering it profitably has never been the challenge, but delivering it at a highly profitable clip has always been the challenge.
Traditional agencies typically run around 20% net profit and inbound agencies usually run around 5%. Our goal has always been to create a sustainable 20% net profit month over month. Now we’re closer than ever.
This is going to be a long journey and I’m happy to continue to share our findings with you. My advice has always been and continues to be, learn inbound first and then apply agile to it. Do not apply agile while you’re learning inbound. This would be like standing on two surf boards in the middle of the ocean. Staying up on one is hard enough, two is almost impossible.
Start Today Tip – Agile is the future of marketing. The future of internal marketing teams and inbound agencies. Today your homework should be to research what’s going on in the agency space with agile. You should be refining your processes and getting good at inbound. We’ve decided to limit the amount of changes we’re making agency wide for the entire 2nd quarter to let my team master agile and Scrum. Once you can afford to go three months without making any operational changes, then that might be a signal that you’re ready for agile too. Until then, stay tuned.
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