Critical Agency Acquisition Mistakes

Marketing School - Digital Marketing and Online Marketing Tips

Eric Siu and Neil Patel

Business, Marketing, Careers

4.6 • 1.4K Ratings

🗓️ 27 November 2023

⏱️ 7 minutes

🔗️ Recording | iTunes | RSS

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Summary

In episode #2619, We delve into the crucial mistakes to steer clear of when acquiring an agency, drawing from our own experiences and aiming to offer valuable insights to those contemplating a similar move. We underscore the significance of avoiding errors such as neglecting to retain the founders and management team, rushing through the due diligence process, and overlooking the importance of ensuring a cultural fit. Our emphasis lies in taking the necessary time to find the right agency, conducting meticulous due diligence, and aligning incentives with the founders for a successful acquisition. Additionally, we stress the pivotal role of cultural fit and advocate for open communication throughout the acquisition process. Don’t forget to help us grow by subscribing and liking on YouTube! Check out more of Eric’s content (Leveling UP YT) and Neil’s videos (Neil Patel YT) TIME-STAMPED SHOW NOTES: (00:00) Today’s topic: Critical Agency Acquisition Mistakes (00:32) Importance of retaining the top talent during the acquisition (01:39) Need for founders to stay on board for knowledge transfer (02:59) Importance of conducting thorough due diligence before acquiring (03:56) Taking time for due diligence and decreasing the seller's advantage (05:32) Key factors to consider during due diligence: churn, revenue, growth (06:20) Importance of cultural fit and interviewing for it (06:52) The Leader's responsibility to be closely involved in the acquisition process (07:10) That’s it for today! Don’t forget to rate, review, and subscribe! Go to https://www.marketingschool.io to learn more! Leave Some Feedback: What should we talk about next? Please let us know in the comments below Did you enjoy this episode? If so, please leave a short review. Connect with Us: Single Grain << Eric’s ad agency NP Digital << Neil’s ad agency X @neilpatel X @ericosiu Learn more about your ad choices. Visit megaphone.fm/adchoices See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	All right, so we're going to talk about critical agency acquisition mistakes.
0:04.0	So in the last episode we talked about if agencies are right for roll-ups, check that one out.
0:08.0	But that actually sparked the idea for this one.
0:10.0	Critical agency acquisition mistakes, I've acquired some, and then Neels has acquired some companies
0:15.1	in the past, and we might or might not be in the market
0:18.1	in the near future.
0:19.1	So if you got a cool agency, let us know.
0:21.3	But we wanted to share some mistakes
0:23.2	that we made and hopefully you can sidest that these mistakes because this is a
0:26.3	this is a lot of wisdom and a lot of money spent and a lot of time too yeah
0:30.9	yes you know the the first big mistake is when you buy an agency and Eric went through this,
0:40.0	whoever you're buying it from, the founders and management team, they need a stick on board for a while.
0:46.6	If they're not there for a year or two years, it's really hard for the knowledge transfer, the client relationships,
0:52.2	and you're in you know expect a world of hurt if you're
0:57.6	not retaining the top talent whenever you acquire because the agency is a people
1:01.8	business the people is really what matters. The people is what's
1:05.2	driving the revenue. The people, it's what's reducing the churn. And if you just do a change of all the people or the
1:11.5	main people, you're going to have a lot of issues.
1:14.7	Yeah I'll get a little more specific here so you know in one case for the agencies that we got
1:19.0	the founder was involved with every single account. He was super serving every
1:22.8	single account, which is good when you're a smaller agency. That's how you build a lot of
1:26.0	goodwill with the clients, the clients, the clients are like, oh my God, I love working
	...

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