Hey, everyone! Welcome to another action packed episode of The Agency Accelerator. 

Today, we are talking all things about white labelling. I know we've spoken about this before but I think it's a really important topic for many people who are just starting out in their agency life. They might be freelancing. 

White labelling for another agency is a great way of getting your clients. As you grow, you may also decide that providing white labelling to an agency is a way of getting consistent business as well as finding your own end clients.

We're going to talk about how to make sure that you find the right partners and you have this equal partner-partner relationship. We're going to talk about getting the pricing right and how to cope with scope creep. We're gonna flip it on its head and talk about, if you're an agency and you want to bring in some additional services through a white label partner, how do you go about finding them? How do you make sure you have a great partnership relationship? So, another action packed episode and let's get on with the show.

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Okay, on with today's show. 

Hello everybody and welcome to this week's Agency Accelerator Podcast. I'm really excited to talk about this topic today because it's one that we haven't spoken about before. That is white labelling your services as an agency or indeed, buying in services from another agency as white labelling.

 I'm joined by an expert on this topic, John Horn. 

John is the managing partner of Stub Group. It is a premier Google partner and ranked in the top 1% of all Google partners worldwide. He has also taught marketing to over 85,000 students online, which is pretty impressive.

John has been with the Stub Group for close to a decade, working with companies across the globe. Managing marketing for them, mainly focusing on pay per clicks.

As I said, John, that's a pretty impressive track record. Do you want to just start off by telling us a bit about your journey in the agency world? 

Absolutely! Rob, thanks so much for having me on here. I've been looking forward to the conversation and digging into white labelling in particular.That's one of the things I'm excited about, the work that we do here in Stub Group. 

Then, just to give background on what we do. We are a pay per click advertising agency. The way I got into things was back at the very beginning, we started out as two (2) co-founders of the agency. We've been in marketing for a long time. We're looking at the trends of where marketing is going and what types of services our business is going to be needing in the next 5, 10, 15 years and so forth.

At that point, pay per click, also primarily Google advertising, Microsoft Advertising, Facebook etc., was very prevalent but also in some ways nascent in that many businesses had not yet made the switch to a more digital advertising component to their marketing strategies. They still were kind of stuck in the traditional world but they were heading that direction because they're realising that the customers they needed to reach were online, so, they would need to be online to reach them.

Then, we started a Stub Group at that point, wanting to both capture the existing business that existed in the marketplace as well as grow along with the growth of pay per click, search engines and Facebook. 

All that's happened in the last close to a decade here. That's how we kind of started things out. I came on board as the first employee with the co-founders, and really, we just bootstrapped it and figured out how to do things. Figured out how to be successful for our clients. How to get those clients on board, and then grow our team along with our client base. Eventually reach things like Premier Google partner status.

You mentioned Facebook marketing partner status so forth to be able to have those relationships and credibility with the platforms we're using for our clients to help our clients best succeed.

Yeah, fantastic. You must have seen so much change in the pay per click world. It's really changing by the month, isn’t it? Like, Apple that keeps changing their latest operating system. I think it makes it even harder for tracking and so on. I guess there's a big effort to stay up to date with what's going on in that world.

It is very much an adventure. It's kind of the curse and blessing of our field in that. Yes, there's always something new to learn. What you did yesterday may not work today but at the same time, that's why we have work to do and that's what we're being paid. To keep on top of those things and to be able to leverage these insights for our clients who just want to run their businesses. They don't want to spend their days reading Google announcements and testing Facebook campaigns and so forth.

Absolutely. Then, let's move on to talk about white labelling. Let's just start with a couple of fundamental questions. 

You and I obviously know what we mean by that, but just give us a quick definition of what we mean by white labelling. Also, why would an agency consider white labelling their services?

White labelling typically means when you have a service provider, let's say an example, an SEO Agency. They do SEO for clients and they want to provide a service to those clients but they don't have the in-house capacity to do that service. In that scenario, they might go to another service provider such as Stub Group, who specialized in that service and say: “Hey, we want you to do this work, execute this work on behalf of our client but we don't want to just send the client over to you. We want to retain that client relationship. We want to maintain a cohesive point of contact for our client, and also we want to profit from providing this service to our clients.”

The agency, in this example SEO agency, will sell PPC as a service to their client and they'll take that money. Then, they will come and hire Stub Group to provide that service and obviously, they'll be margin there. They'll profit from the work that they're putting into coordinating things, for finding that solution and just providing that solution to their client.

Yeah, and I always tell my clients that there's two key times to outsource services, will that be freelancer or white labelling.

One of those times when you have capacity issues. The other time is when you have a service to provide but you don't have the skills in-house or, you don't want to have the skills. In your example, there may be an SEO Agency that really wants to focus on SEO but they've got a few clients asking them to do some PPC work, and so they think, “Okay, we'll bring in a partner to do it”. 

One thing that we see there often in terms, that thought process on the agency side is, “Do I really want to go through all that work of hiring a new employee?” Betting them on trying to figure out if they know what they're talking about, when I don't know what they're talking about as saying, SEO Expert.” 

How do I really vet somebody on the PPC side and then invest that risk into bringing on multiple employees. Hoping that I'm going to get the business and will be able to meet payroll every month as opposed to the project based. Go find a partner, a client comes in and pays you. Cool! We've got money to pay them and you're just passing that risk on. 

Also, if it doesn't fit in your core wheelhouse of what you do as an agency, then there's quite a big risk to start hiring staff immediately without the certainty that you're going to have a consistent amount of projects or retained work coming in to pay for it.

Talking about paying, there are lots of minefields, tips and tricks and things that we need to explore with the whole white labelling thing. One of them is pricing. How do you white label your services through another agency? How do you get the price right? And, how do you make sure that the agency isn't bashing you down on price? Because obviously they want to add their margin on top of that.

I know I'm sort of sharing some of these. A lot of the questions today are questions that have come from my clients, who have white labelled in some form or another. So, I'm kind of just passing them on to you to get your view on it.

Absolutely. The way that we have approached that historically is definitely looking at each situation. Each partner who is reaching out and saying, “Hey, we want a white label and customising pricing in a way that's a win win for each side.” Like you said, you don't want to get bashed down by your partner.

You don't want to just say, “Hey, let's make pennies on the dollar.” It's not going to be a good long term scenario. Also at the same time, you want to create a scenario where the partner who is hiring you to do white label services is incentivised to do that. Incentivised to go out and bring on new clients because they're also making a great margin. It's usually a process of negotiations. I'm talking with that partner to figure out what's realistic here in terms of what they're looking to charge their clients.

Also on our end, we're looking at scope of work. With white labelling, one of the big reasons why we can offer a discount, often to our partners, is because in theory we have less communication that's going to end up happening because instead of us having 50 different clients that we have separate communication with and separate relationships with, we're going to have centralised communication with our agency partner who their own team has those relationships. Then, we’re able to have significant time and labour savings by not having all of those disparate relationships going on.

Therefore we can pass that on in the forms of cost savings to our partner. However, you've got to figure out that scope of work and expectations going into things and be very clear about that because still, creep.

Also, something that happens constantly where you agree to X and say, “Yep, I can give you this discount because we're not going to be doing, let's say, installing conversion tracking.” Your partner says, “Hey, we're going to take care of making sure codes get installed.” Well, I can give a discount to a partner because I know how much time it takes for my team to generate those codes, install those codes and troubleshoot those codes.

If we're not doing that, well then, it's not time we have to give you a discount. But then, to clients down the road that partner comes to you and says, “Hey, we're not really sure what we're doing here. Can you just tap in to install these codes?” That's where things get tricky. So you need to have a process in place to identify the type of scope creep occurs. Also, kindly but firmly pushing back, having clear communication with your partner to say, “Hey, we gave you X pricing because we're giving you X services. If you want Y services, cool, we can do that but then, the price is going to change as well.” 

Yeah. This is just a good moral for any agency that's listening to this around their pricing, whether they're white labelling or not. It 's just a good strategy to get your boundaries in place and get really clear your scope of work.

I've written before about you, John, actually used exact words that you can just request from a client, an agency or a white label that they are implying that this is a really trivial thing for you to do, but often it isn't and there's dreaded, “Can you just do this?” “Can you just do that?” .

Now, when it comes to finding your scope of work, you've agreed that I don't need to get too much into the mechanics of how you do it. What's your view on how you price that? Do you price against that scope of work? Do you take a “Time and Materials” kind of approach? An hourly rate, daily rate, or even a value based pricing rate? 

What was your advice about that? 

Typically, we'll look at labour costs because that's really the primary cost to us. We are selling the time of the team that we have, as well as their expertise and access to our teams at Google and Facebook and so forth. But, really looking at that time as the main hard expense and identifying, on average, how much time does it take to work on different types of businesses. Of course, we've got so many clients and we've been in business for so long that we have a good sense for, “Okay, on average, clients may take X amount of work.”

Obviously, some clients take way more, some less. It's the 80/20 rule but you average that out. You also look at the economy of scale. If we have a partner who wants to give us three accounts, we're probably going to need to charge significantly higher per account than if the clients are giving us 50 accounts because the more work they’re giving us, the more assured income is coming in. Also, the more I'm able to say, “Ok, well, I'm dedicating X amount of time from these team members over here to this partner.”

I can justify salaries. I can justify the expense of their time based upon this somewhat assured income. Obviously, no income is assured because things change all the time, however, having a sense for how much of that work is gonna be coming in and justifying the expenses of me. Paying those employees is the primary metric that we're looking at.

What's just changing tact a bit? You kind of alluded to this in the point you made earlier. What's your view about the white label partner having any direct access to the client and having direct communications? Sometimes, obviously the agency wants to have that extra resource and have that expertise available to the client, but that obviously opens a whole kind of worms and risks as well. I don't know what your view is on that. 

We're always very open to that, if that's something a partner wants. The way we approach it, we want to be the solution that you need. Then, if that's a completely white label and the client doesn't know the work we're executing, cool. We'll make that happen. 

Some of our partners, they'll actually want to leverage the fact that we are premier Google partners. That’s a big selling credibility aspect to communicate to the client. If they're not in the PPC world, they may not know how to answer a complicated question or help set a strategy. So, they want us to contribute to that conversation. We're totally open to that. If that's the scenario that you find yourself in as an agency, again, you've got to factor that into what you're charging the client, because that relationship is going to directly translate into more time on your end.

More conversations with the client, more repetitive work, where you're saying something from the client and you're saying something from the agency partner, and more access to your team, where they have to be available to get on a call with a client within a reasonable timeframe, etc. It's totally doable. Sometimes, it can be a positive to all sides because as a white label partners have that direct access. You can avoid pitfalls that your partner might not know how to avoid because they're not the expert in PPC as an example.

Then, we can hear a question from a client but we just point them in the best direction for them. As long as you get paid for the time and effort that goes into that, then it can work well. 

In that scenario, would you be working under the brand of the client rather than your own brand? 

 It’s really all up to the client and what they want.

We have processes in place if they want a strict white label. We can operate in the accounts, we can have access to the accounts, we can send reports that don't have any kind of study logos or information on its clients and our clients. The agency partner can do what they want. Or, if we're a known entity and our partner is simply operating as that point of contact because the client doesn't want to have 10 different vendors they talk to every week.They just want to talk to one person, have that person go do the rest of the work, then, we can do that as well. 

If I'm an agency and I'm looking for a white label partner, what advice would you give me about separating the good ones from the bad ones? 

Again, this comes through the sort of experience of my clients because I've had a few clients that have actually outsourced PPC to offshore white label agencies, and they have promised a lot in the beginning and then failed to deliver.

So, what would you say the things to look out for?

Offshore is kind of the key word there that you mentioned. Most certainly, not all, but most white label partners, especially if they focus on that, they are paying very cheap labour. Let's say team members in India, the Philippines somewhere there. The work product that you're getting out of them is some respect. You're getting what you pay for. If you're going to pay somebody five bucks a month to do something, well, that's the kind of work you're going to expect to get.

When you are researching that white label partner, you have to understand these: Where is their team based? Who's gonna be working on the accounts? It doesn't mean that there aren't good resources outside of the U.S. Of course, we have some team members, let’s say in the UK, Spain or different places where “Hey, they're awesome!” 

We found them because we live in this remote world where you can find great talent anywhere and it can work fantastically. If you are researching that partner and realising that all their team members are not based in the US, that looks like they're primarily just leveraging new.

Well, I wouldn't say talent, but freelancers. You might find a fibre up work who charges 15 bucks an hour or something like that overseas. That's probably not going to be a good fit for you. That’s one thing.

Another thing, too, really ask them about their processes. What processes do they have in place for white labeling? If they have been doing white labelling for a while, they're going to have figured out how to streamline things. They're going to be able to say, “Hey, yes, when we onboard a client, here's what we do A, B and C.” Here's how we cut down on communication so that both parties spend less time and get to the core information we need.

Here's what happens when a client asks a question of you, the partner, that needs to get to us, so, they should have those answers down path. If they're sounding very like they're making up on the spot then, they might just be getting into white labelling and trying to sell a new service but figuring it out on the fly. So, that's going to take questions.

That's good advice. I think I really understand the process because obviously working with the white label partner is gonna be different to working with an in-house team.

The systems and processes that are put in place to communicate effectively to keep up to date with what's going on and to be able to see progressive projects is super important. That's good advice.

Let's just switch it around a bit and say, let's take it from the agency's perspective now. If I'm an agency, when should I consider bringing in a white label partner? I know you've alluded to this already a bit, but let's just turn it on its head and say, I'm an agency. I'm growing. I'm trying to make that decision. Do I bring in a white label partner, do I hire a team or do I do it myself? What's your thoughts? If someone was at that crossroads, what would your advice be?

I'd say, typically, you want to have a market for the service that you're looking into. Let's go back to the SEO Agency as an example. If they already have a client roster and they're seeing repeated questions, they're seeing clients, ask them, “Hey, can you guys do a PPC?” or “Hey, can you guys recommend a good PPC vendor?”

Then, that's happening consistently. That's telling me, as an SEO Agency, that I can probably sell this service to our clients because they have this need and they trust that we can help them with this need. It's going to be an easy sale or a natural sale, as opposed to your PR firm. 

All of your clients they've never asked you about doing SEO for them but you decide, “Oh, hey, I just want to make more money. Let me go to SEO, at my roster.” You can do that and maybe, you can do a great job at it, but it's going to be a harder sell because you’re trying to create interest in your clients for something new. They haven't expressed that interest to you yet. I'd say that's part of it. 

And then, deciding whether in-house versus outsourced, really, it comes down to your goals as an agency. Do you want to be a full service agency where you have team members who can do web design,who can do SEO, who can do PPC, who can do PR or whatever the case is, and you do all that in-house. Are you willing to deal with the HR headaches that come with that. Investing the time and resources into finding the candidates in those disparate fields. Vetting them and figuring out how to gauge their expertise in areas where you might not have much expertise?

Versus,  do you want to give up? Maybe some margin by going outsourced but also moving that risk away from your in-house team, where you are responsible for payroll every month. Regardless of whether your clients are hiring you or paying you, whether how many clients you bring on board etc.

It's really a risk, a big part of it. You're excusing what your goals are as an agency and which direction you want to grow into. 

I think that's good advice.The niche specialist agency is almost always going to win out against the generalists. Especially the smaller to mid sized agencies. Sometimes it can be very tempting to feel like the other man's grass is green because it's hard where I am.Then, I go in and try to sell all these other services to my clients, and that very rarely is the solution.

I think hanging on to what you're good at and your specialty is where you want to really be building. Like you say, have a clear plan. Have a clear vision so that the decisions I'm making, it takes me on steps towards delivering that vision as opposed to just seeing a shiny new object and getting distracted by it. 

Also, let's just talk a little bit about when things go wrong. So sorry to be negative, but I think, again, I've sort of had client experiences where things haven't worked out as they hoped. That’s why, I feel like good due diligence should touch upon that topic. 

What's the typical causes of why relationships might go a bit sour in the sort of white label agency relationship? 

I don't know. I've never had that happen. I'm kidding. Yes, relationships will go sour. There will always be fires and things you have to deal with. Well, the reality is, if you have a lot of clients with an agency partner, again, the 80/20 rule, there's going to be problems with some of those clients.

That can flavour the entire relationship. If client A over here, if that particular account went sour, maybe a mistake was made by a team member or whatever the case may be, then that can flavour the other nine accounts that are doing well because it's the same point of context of the same relationships. 

The ideal relationship that we're always striving for and looking foreign partners reaching out to us is just, where there's going to be transparency, communication. If one of the other sides messes up, apologise. 

Here's what we're doing to make sure we don't make this mistake again. Own up to it,  move on and not get into this tit for tat where, we made this mistake over here, then,  you made this mistake, that equals out. We're bitter about this. That’s just a terrible scenario for both parties.

Being transparent in communication and recognising that our partner who’s hired us, they're counting on us and we've got to do well for them. Sometimes that means, I've been on the phone on Thanksgiving Day or different times, saying, “Hey, there's a problem here. The fire. We're going to figure it out. We're going to get it solved for you.” 

Showing that level of commitment and care to your partner goes a long way. Having confidence that you're the right partner for them. I think that's important. 

Also, not letting your partner step on you. That's important as well because your partner, everybody, likes to pass blame. That's just natural and human. Your partner is going to always be incentivized and say, “Hey, things aren't working well for this account because your team did X or Y” and you've got to really dig in and say, “You know what, maybe we made a mistake here or maybe not. Here's what's actually going on and we don't have the information that we need, maybe from you, to do well for this client” or “Hey, the client, they stopped answering their phones, which we know because we're doing call tracking, and that's why they're not selling. So, this is not our fault.”

You need to have a conversation with your client about how they're handling the sales process. It's having that level of true partnership of viewing yourselves as in business together and working together.

Sometimes, if you have a toxic partner, you've got to cut them. We've had scenarios where we came to believe that our partners are not being straight with us, not doing right by us, kind of trying to manipulate us to accomplish their ends, kind of blaming us for things that weren't really our problem and trying to get stuff out of us. We had to go to them to say, “This isn't working out. We need to have transparency and trust with our partners and best wishes to you but we're no longer the right partner for you.” 

You gotta be willing to take that step and take the short term pain that comes from that in order to not have your life a living hell.

Yeah, exactly. I think the key message there is the partner-partner relationship, as opposed to the kind of customer-supplier where the customer is beating up the supplier. If you're a way level partner, then, you're sort of two steps further down, removed from the customers. That’s why, there's a danger that can happen even more.

Let me just ask you, I want to ask you a couple of other questions for you to wrap up for three more questions. Is there a scenario where the agency would say, look, we've been working with this white label partner for a long time. We've got this consistent amount of revenue coming in for this service. We need to bring it in-house now. If that happens, how do you manage that?

Great question. Actually, we have not had to deal with that scenario ourselves,  thankfully. I'm sure that scenario does happen. 

The first thing, if one of our partners came to us and said that the question is so kind of helped them thinking through the numbers, because often, there's an alert of yes, they can make so much more money by bringing this in-house. However, what they don't really get is how much work goes into things. What the benefits are even of leveraging. Let’s say, a partnership with Google, like we have a premier Google partnership. The access that gives us the things that we're doing behind the things are behind the scenes for their clients. 

It's making sure they really understand how much work, how much value we are providing, and they're taking that into account. Also helping them understand how hard it is to find good talent in this workforce and just how much work they're gonna have to put into finding those people in the house. Keeping them happy and entertained because that's not easy. That's what I spent a lot of my time on, in solving that problem.

Yeah, I don't know how it is in the U.S. but I tell you, it is a constant conversation over here at the moment. I had my group coaching call this morning and recruitment came up again. Someone was saying, I just thought I got the right team and I've had two people resign, and so I think, it always seems to be an employee's marketplace but it seems to be even more the case at the moment. Kind of as we come out of the pandemic and when we're recording this. Then, I guess that's probably true in the States as well. 

Yes, absolutely. I'd say, don't burn those bridges. If a partner makes that decision and brings things in-house. Again, the reality is they may not like that decision two months from now. Once they're dealing with the realities of actually handling that team next to in the work. You wanna maintain those bridges and say, “Okay, you want to take some of the work on? Hey, maybe start with 10 accounts.Take them on. See how you like it will keep working with these and we'll be your scaling arm. So, when you need help and you don't have those internal resources we're still here for you. We’ll help you scale”

You can even make great hybrid relationship where they bring some business in-house but they keep some business with you. Or, they use you to leverage in those crunch times when they bring in a bunch of clients and they can't handle them internally. There's still a lot of ways you can provide and make value. I think, from those relationships, even if they start to bring that in-house. 

Yeah, that's good advice. My second to last question, I said that you've taught digital marketing to 85,000 plus people. That's a lot of people. How do you do that through online stuff or how have you reached that number? 

Some online training, so I put together, really focused on Google ads. It's really oriented towards small businesses who are getting into Google ads and trying to figure out what to do. Trying to help them avoid some of those pitfalls that new businesses have, such as, they've read Google stuff, “I think this is going to be amazing. Let's do what Google says.” Then, put a budget in here and they wake up the next day, realise that I spent a lot of money and didn't get anything for it. It's trying to help them avoid some of those pitfalls, and I think It’s just to do well. 

I can concur that if you think you can do some of these things yourself that are not in your kind of wheelhouse, then you are on a quick road to spending a lot of time and throwing a lot of money down the drain.I've certainly been there myself, a  bit with Google, but mostly with Facebook ads. 

John, where I'm conscious of our time and keeping the podcast about 30 minutes. I just wanted to ask you the question that I ask all of my guests, which is, if you go back in time and give your younger self just starting out in business, a piece of advice. What would it be? 

That's a great question. I would say be a little more confident. What I mean by that is, when you're just starting out in business, as I'm sure you know, It's so easy to have that imposter syndrome.

I have no idea what I'm doing. All of my competitors, they have it all figured out. They're doing a fantastic job and how do I get into this space? Just realising that everybody is figuring it out everyday. The market is always changing. People look like they got it together but we're all we're all figuring it out. If you invest that time, that energy and that intelligence into what you're doing. If you're truly meeting a market need, caring for the businesses you're working with and the clients are serving then, go forth, do it and things are gonna work out. 

Good advice. I think you're right that we have that imposter syndrome and we have to live with it our whole lives, right? Every day we've got this voice. 

Can you know when you're gonna be found out? But, it's good advice. Whether your younger self would listen to that or not, I don't know. Whether my younger self would listen to that, I don't know. But, a really good bit of advice.

We're coming up to episode 100 of the podcast. My plan, I'm saying this publicly now, so I'm gonna have to do it. My plan is to take all of the bits of advice that my guests have given me over 50 episodes and put them into one episode to celebrate our hundreds. 

That's really interesting. One of the reasons I want to do that is because I don't think people have ever said the same thing about the advice they give themselves. I don't think anyone said what you just said, which is really great. I think there must be a lot of wisdom in that.

John, I really appreciate your time. I've really enjoyed the chats. If people want to reach out to you and contact you, what would be the best way for them to do that? 

LinkedIn, search my name on there. Always looking for DMs on there. If you want to reach out to our company and learn more about our white labelling services, stubgroup.com. Reach out through there with your case studies, video reviews, all that good stuff, and I’d love to chat. 

Great. I will include your LinkedIn profile and also your Stub Group's website as well in the show notes. 

Again, thanks so much for joining us today. I know listeners are going to find this topic useful because they'll be somewhere on their journey of being white label or working with the white label partners. So, there’s some good nuggets of advice in there. Thanks so much for joining us today. 

Thank you, Rob. 

I hope you found today's episode useful. As ever, I try to make the episodes as action packed and actionable for you guys as possible.

I hope you took something away from that, which will help you manage or find white label partners. 

If you enjoyed the episode, please make sure that you leave a review because that really helps the algorithms show me two more people and help more people just like you. And of course, please share the episode with your colleagues as well. Other than that, I will see you next Thursday for the next episode of The Agency Accelerator Podcast.