How Digital Agency Increased Profits by Doing Less - with Ralph Burns and Ryan Hodges of Tier 11 - E112

How Digital Agency Increased Profits by Doing Less - with Ralph Burns and Ryan Hodges of Tier 11 - E112How Digital Agency Increased Profits by Doing Less - with Ralph Burns and Ryan Hodges of Tier 11 - E112In this strategic conversation, Mandi interviews Ralph Burns and Ryan Hodges of Tier 11, a digital marketing agency managing over $105M in annual ad spend. They discuss their journey of transforming from a chaotic 70-person agency to a streamlined, more profitable operation with 40 team members.Key Topics Discussed:[00:00-03:45] IntroductionOverview of Tier 11's business modelIntroduction to Ralph Burns (CEO) and Ryan Hodges (COO)Discussion of their podcast "Perpetual Traffic" with 12M+ downloads[03:46-09:30] Growth Stages & Breaking PointsEvery time you 2-3x your size, everything breaksFirst milestone: $100K/month revenueSecond milestone: $300K/month revenueThe importance of finding complementary talent[09:31-15:45] Acquisition StrategyUsing acquisitions to gain talentConverting contractors to full-time employeesBuilding strategic partnerships within the industryImportance of relationships with competitors[15:46-24:15] Operational TransformationReducing headcount from 70 to 40 while maintaining outputImplementing standardized systems and processesFocus on the 80% fundamentals of business operationsDiscussion of operational efficiency improvements[24:16-32:30] Client-Centric ModelTransition from accepting any client to selective partnershipsDoubling revenue per customerImproving client retention dramaticallyCreating strategic partnerships for referrals[32:31-39:45] Profitability & Team OptimizationIncrease in gross margins from 50-55% to 65%15-20% productivity increase through aligned purposeDiscussion of team motivation and cultureImplementation of standardized processes[39:46-44:15] Vision & LeadershipImportance of clear vision communicationHow to handle team members who don't alignCreating a legendary brand in the agency spaceBuilding operational excellence[44:16-50:02] Key Insights & ClosingFinding complementary leadershipThe importance of saying no to wrong-fit revenueFocus on metrics that matter to clientsDiscussion of ideal client profileNotable Achievements:Doubled revenue per customerIncreased gross margins by ~10%Improved team productivity by 15-20%Successfully transitioned from 70 to 40 team members while increasing efficiencyKey Business Insights:Focus on running the business properly (80%) versus just delivering services (20%)Importance of clear vision and purpose alignmentValue of complementary leadership skillsNeed for operational excellence and standardizationActionable Takeaways:Systematize vision communicationFocus on operational excellenceCreate strategic partnershipsImplement proper management systemsAlign team with company visionResources Mentioned:The "Hodge Wheel" - Vision, Journey, Culture, Results frameworkRocket Fuel by Gino WickmanClient Experience Engine methodologyPerfect For: Agency owners generating $1M-$5M+ in revenue who want to transition from chaos to operational excellence while increasing profitability and reducing personal involvement.Want to transform your agency...