This post is part of the Insider Series, which is designed to feature professionals in our industry, offer business insight and discover new paths in the agency world.
Tony Ahn (@_TonyAhn_) is a principal at Tony Ahn & Co., a hybrid-marketing agency in the Philippines. As an American expatriate living in Manila, Tony was the first to launch an inbound marketing agency in the Philippines. The company serves clients from the Philippines, Singapore, Hong Kong and the United States. It uses a value-based pricing model to deliver a full spectrum service approach that drives results.
Marketing Agency Insider spoke with Tony about his agency’s services, pricing and processes.
Q&A with Tony Ahn
MAI: What drove you to move toward hybrid services in the past year?
Tony: I started as a digital marketing agency, and noticed that some prospects would be better served by traditional PR. Others had digital marketing needs, but were asking if I could recommend a traditional PR agency for their corporate communications needs.
But most importantly, I saw powerful synergies between traditional press and digital marketing that we could use to delight our clients—ways for online communications to amplify the offline, and vice versa.
MAI: I understand that you do not use a billable hours model. Can you explain how your pricing is set up, and how you determined the appropriate price tag for services?
Tony: I am very much oriented to market price sensitivity. This is a succinct way of saying that I charge what I think companies are willing to pay (or as economists say, “what the market will bear”). I start there, and determine that price point completely independently of my costs/overhead or revenue targets.
Once I arrive at that price (which I determine by speaking with business contacts and benchmarking competitors), then I go back and calculate the time and costs, using my hourly revenue targets to determine how much the agency should be making. Once I see the margin, either it’s sufficient, or it’s not. If it’s not, I see how I can re-engineer the execution to bring costs down. Eventually, I arrive at a margin that works for us.
MAI: Is most of your work project-based or do you also manage ongoing campaigns?
Tony: We do both campaigns and projects. Since most of our services are productized, most campaigns are a collection of our products with some extra-customized services. And even for campaigns, we don’t charge a separate retainer. What other agencies call a monthly retainer, we build into each product. That way, when clients cut down a proposal for budgetary concerns, we don’t have to fight for our retainer.
MAI: As the first inbound marketing agency in the Philippines, what geographic markets do you serve?
Tony: We serve the Philippines, Singapore, Hong Kong and the United States, and we partner with other agencies to serve the rest of Asia. It is tempting to say that we can serve the entire English-speaking world, since many of our services are delivered online.
However, after working in an Asian English speaking country, I’m acutely aware of how important relevant cultural insights are to the PR and marketing here. For example, getting a couple movie stars and singers to eat in your coffee shop won’t drive a ton of business in the states, but it can here in Manila. Filipinos are highly affected by influencer marketing and social status.
Fortune 500 companies, local banks, major real estate corporations and small businesses have used my signature line of products.
MAI: How many people work for your agency (either on staff or as partners/freelancers)?
Tony: Our staff is currently nine (including partners and freelancers), plus the suppliers we manage. We expect to add a full-time person per month for at least the first year. We are 20% owned by one of the largest PR firms in the country, and they provide us a great deal of support.
MAI: How do you forecast and staff accounts?
Tony: I treat our agency like an account itself. When we’ve got a lull in business, I put the extra manpower on marketing our agency, which results in more leads and more business, so the lulls don’t last long.
Also, Tony Ahn & Co. operates under a Results Only Work Environment, which means we don’t track hours for the purposes of compensation. Employees can come and go as they please as long as the work gets done. So time has a radically different meaning at our agency. We only use it to figure out costs and targets. If you want to catch a movie at 2 p.m. on a Thursday, that’s fine as long as all your deadlines are met and your clients are enthusiastically satisfied.
One more hurdle to forecasting is the fact that we white label/resell our services to other agencies, both locally and in the USA. We can’t always predict what our agency clients’ flow of business will be like.
One thing I learned managing for Starbucks when I was a kid was to have one more person available than you actually need, which allowed the crew to operate at about 80% capacity. They didn’t spend the other 20% of their time doing nothing; they were often tasked with “nice-to-do but not urgent” tasks, marketing efforts, or their own professional development. Once everyone was working at 92% capacity or more for a sustained period of time, it was time to hire again. I use a similar model at Tony Ahn & Co.
MAI: What have been the biggest challenges you’ve faced growing your agency? How did you overcome them?
Tony: My biggest headache has been with government bureaucracy so far. We’re the first hybrid agency in the Philippines, locally owned, but with some foreign ownership, and that causes issues. But for something more relevant to your readership, I have a really hard time hiring an in-house SEO expert that will work on salary. All the good ones are freelancing it seems, and I haven’t overcome that problem yet.
MAI: What is the biggest lesson you learned in starting and managing a marketing agency?
Tony: The biggest lesson I’ve learned in starting and managing a marketing agency is that there is software to assist with almost any business issue out there. We’re using Basecamp for task management paired with GanttProject for granular project management. We’re using Highrise for CRM. We’re using WorkSimple for HR. We’re using Microsoft Office 365 for productivity and intra-office communication.
And everything is usable on our mobile devices. My consultants have fold-up bluetooth keyboards paired to their Windows phones so they can edit Word documents or PowerPoint presentations wherever they are. We’re wired tight, and the productivity gains make that totally worth it.
Right now, we’re servicing clients on three continents. Western countries like our price points, and Asian countries like that we’re in their time zone and understand their culture. The technology we use allows us to do more with our staff, and the reason that’s important is because of that old compliment “I wish I had three of you.” The productivity gains I see are equivalent to having almost two of every employee, and the investment I’m making in technology to see those gains doesn’t come close to the cost of hiring and training.
Tony Ahn is a principal at Tony Ahn & Co. Connect with him on LinkedIn, or visit his blog.