Ep 508: How to Scale an Agency: Kyle Hitchcox on Pilothouse's Marketing, Sales, and Content Strategy

Summary

DTC Podcast Episode 508 Summary: How to Scale an Agency with Kyle Hitchcox on Pilothouse's Marketing, Sales, and Content Strategy

In Episode 508 of the DTC Podcast, host Eric Dick engages in an insightful conversation with Kyle Hitchcox, co-founder of Pilothouse—a thriving agency renowned for its innovative approach to direct-to-consumer (DTC) marketing. The episode delves deep into Pilothouse's strategies for scaling an agency, effective marketing techniques, sales processes, content strategy, and talent management. Below is a comprehensive summary of the key discussions and insights shared during the episode.

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1. Pilothouse's Origin Story and Evolution

Kyle Hitchcox provides a foundational overview of Pilothouse, tracing its roots back to an affiliate marketing business model.

• Affiliate Beginnings:

  • "Pilot House was born out of an affiliate business where we would spend our own money to drive sales for brands... basically CAC from there." [03:42]

• Transition to a Services Agency:

  • Kyle explains how Pilothouse evolved from affiliate marketing into a full-fledged services agency with performance incentives.
  • "We just turned it into a services business with performance incentives... paying on CPMs and things like this." [05:08]

2. Investment in Media and Content Growth

The discussion highlights the significant investment Pilothouse made in media to fuel growth and the pivotal role of content.

• Initial Media Spend:

  • "We spent about $120,000 in our first year... closer to $50,000 only to drive ads in that first year." [07:35]

• Content as a Growth Driver:

  • Eric emphasizes the importance of quality over quantity in content creation.
  • "You only need the right listener. And in the B2B world, one listener can be more than worth your time." [39:04]

3. Effectiveness of Meta Ads and Alternative Channels

Kyle defends the continued effectiveness of Meta ads despite industry skepticism and discusses the diversification into other channels.

• Meta Ads Success:

  • "We just actually doubled or tripled our meta spend... Meta is doing well for us." [09:12]

• Exploration of New Channels:

  • "We've added different channels and have built more, more holistic... Reddit, Quora... Google or YouTube transcripts." [15:42]

4. Sales Team Architecture and Process Evolution

The episode delves into how Pilothouse's sales team has grown and adapted over the years to support the agency's expansion.

• Team Structure:

  • "The sales team is eight people, give or take... broken into two groups." [17:48]

• Consultative Sales Approach:

  • Kyle emphasizes a consultative sales process tailored to client needs.
  • "It's always consultative... you have to adapt and change things sometimes to perform." [18:19]

5. Adopting an Omnichannel Strategy

Pilothouse's shift from a Meta-first agency to an omnichannel powerhouse is explored, showcasing the benefits and challenges of this transition.

• Departmental Integration:

  • "We've broken it up into kind of three clear groups as opposed to eight. And that's really simplified things." [23:37]

• Client-Centric Service Offering:

  • "What's the best mechanism to find that in the short term? What's the roadmap?" [24:45]

6. Hiring Strategies and Talent Management

Kyle shares valuable insights into hiring practices, emphasizing the importance of cultural fit, experience, and empowering teams.

• Selective Hiring:

  • "Filter out people and try to scare them away... let people know how hard and challenging this industry is." [28:36]

• Empowering Teams:

  • "Get out of your team's way when they don't need you and celebrate those wins." [30:59]

• Retaining Talent:

  • "If you can imagine a need and you need an agency and this agency has a bunch of services... we want things to go smoothly." [23:50]

7. Warp Drive Product and LinkedIn Marketing

The conversation shifts to Kyle's efforts in promoting Pilothouse's CRO tool, Warp Drive, through personal LinkedIn marketing strategies.

• LinkedIn Strategy:

  • "I was trying to pre-schedule everything... keep it as a journal." [36:30]

• Content Creation Approach:

  • Kyle emphasizes quality over quantity, ensuring that LinkedIn content remains valuable and authentic.
  • "I always end up rewriting it... it's gotta be you." [37:56]

8. Leveraging AI and Emerging Technologies

The podcast touches upon the impact of AI and platforms like ChatGPT on lead generation and content optimization.

• AI as a Lead Source:

  • "We've got our fourth inbound in a month and a half from ChatGPT with different prompts." [14:09]

• Optimizing for AI:

  • "We're trying to figure out the specifics and how Chat GPT specifically functions compared to, say, Gemini." [15:42]

9. Future Directions and Reflections

Eric and Kyle wrap up the episode by reflecting on the agency's journey, the evolving digital landscape, and future plans.

• Content as a Foundational Element:

  • "We have a great understanding of content and just the pure volume of content that we've put out." [14:09]

• Sustaining Growth Through Relationships:

  • "We're trying to build a relationship with you... we'd much rather work with someone for five, six, seven, 10 years." [24:45]

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Notable Quotes:

• "You have to be dynamic. You have to have team members who are coming up with new ideas, get out of your team's way when they don't need you." — Kyle Hitchcox [01:50]

• "If you're starting an agency right now... there's one thing that can happen when you bring in someone with experience if the culture fit isn't right." — Kyle Hitchcox [01:35]

• "You only need the right listener. And in the B2B world, one listener can be more than worth your time." — Eric Dick [39:04]

• "It's always consultative... you have to adapt and change things sometimes to perform." — Kyle Hitchcox [18:19]

• "Filter out people and try to scare them away... let people know how hard and challenging this industry is." — Kyle Hitchcox [28:36]

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Conclusion

Episode 508 of the DTC Podcast offers a deep dive into the inner workings of Pilothouse, highlighting its strategic pivots, steadfast commitment to quality content, and adaptive sales and hiring practices. Kyle Hitchcox's experiences and insights provide valuable lessons for agency leaders and DTC brands aiming to scale effectively in a competitive landscape. The conversation underscores the importance of building strong relationships, leveraging diverse marketing channels, and fostering a dynamic and empowered team environment.

For more tactical insights and strategies, listeners are encouraged to subscribe to the DTC Newsletter and Podcast at directtoconsumer.co.

Transcript

[Eric Dick]

It's all killer, no filler. And before we get in today's episode with Kyle Hitchcox about agency growth and content marketing. Just a quick announcement for you to go right now to wherever you get your podcasts and type in the words ad dash venturous and there you will find the new podcast that we're releasing with Pilothouse's creative lead Avery Valerio where she's going to be breaking down some of her all time favorite ads. She's going to be having some guests on to talk about creative ads and the process that thought leaders kind of use when it comes to creating great creative ads. I think there's lots of of topics that she's going to be able to cover in this creative focused podcast, the third podcast on the DTC Podcast network after the world's best email retention podcast and of course this the D2C podcast. We're going to be launching some more podcasts in the future. So if you have any more ideas about the kind of content you'd love to see, feel free to send me an email. Erictconsumer co. Otherwise, go. Go find the very first episode of Adventurous with Avery right now or right after you listen to this podcast. Whenever and until then, on with the show. Hope you enjoy this one with me and Kyle Hitchcox.

[Kyle Hitchcox]

I'd say we're lucky, but on reflection talking to you, it's because we created a badass engine and we invested into that engine and it is now evergreen and it gives us space to find new channels and opportunities. We're not trying to close a 50 grand deal on a call. We're trying to build a relationship with you.

[Eric Dick]

Do you have any like overall lessons or big wins when it comes to hiring or personnel?

[Kyle Hitchcox]

It's one of the hardest things to do. Like if you're starting an agency right now. There's one thing that can happen when you bring in someone with experience if the culture fit isn't right.

[Eric Dick]

This is my best tip for anyone thinking about building B2B content out there.

[Kyle Hitchcox]

You have to be dynamic. You have to have team members who are coming up with new ideas, get out of your team's way when they don't need you. Foreign.

[Eric Dick]

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[Kyle Hitchcox]

I'm great, Eric. How are you?

[Eric Dick]

Good to hear from you. You're also working on Warp Drive, our CRO tool. Today we thought we're going to do a little retrospective on how we've grown the agency at Pilothouse, how we've grown our media operations, how they've grown hand in hand and how those listening in the audience, whether you're, you're building an agency or maybe another kind of service business or even a D2C brand, how you might be able to think about growing kind of using the kind of content that we've been able to do here at D2C. Start me off, Kyle, on the origin story of Pilothouse as an agency.

[Kyle Hitchcox]

Sure, yeah. Pilot House was born out of a affiliate business where we would spend our own money to drive sales for brands. And so we'd get paid on a, on a CPA or cost per action, now known as a cost per acquisition. Basically CAC from there. Yeah, we just saw the opportunity and brands needed those, those services and timing.

[Eric Dick]

And expertise all worked out to go even further back. You and I worked at an affiliate marketing company. I remember I took you out for lunch on your first day. We went to Patisserie. Danielle had a lovely croissant. And that was like the early, early days of performance marketing. That was when, you know, that's 2008, 2009, that' were, you know, doing Google Ads marketing and the early days of mobile marketing and really realizing as an affiliate, the kind of affiliate we were, that you had to perform, you had, you had to make the profit work or you wouldn't make any money because you weren't getting paid cost plus, you were getting paid, you know, $10 for a sign up. On a dating network and you had to make sure that you were spending $5 or $6 or $7 to drive that lead. And any profit you made was just in that arbitrage.

[Kyle Hitchcox]

True. Yep. And I've worked in every single vertical, you know, dating, sure, but health and wellness all the way through up to home goods and, and we just started seeing, seeing momentum and the need for it in the DTC space.

[Eric Dick]

Let's talk about when Eric joined. So I, I had previously been working at a, at the affiliate with the affiliate world guys putting on live training events, building. It was basically a community for affiliates that I was trying to bridge into the e commerce world. And I, I remember I met the guy in like 2015. The found Thomas, the founder of Oberlo, which was the very first app I think that allowed you to basically go on AliExpress and sell something directly on your Shopify store with a, with a click of a few buttons. And I was like oh my God, this, this e commerce thing is just going to continue to get massive and a lot of these people who built performance based businesses in the affiliate world are going to be looking to find ways to build longer term brands and higher quality products or just learn to drop ship and make it quick buck in the e commerce world. But I was like this, this is the future.

[Kyle Hitchcox]

Yeah. And we took it a different direction. We just built not just, I mean it's a pretty big business at this point but we, we just turned it into a services business with performance incentives and I think that's pretty common now. I think agencies, you know, especially the bigger ones are trying to figure out how to get away from non action based work where you can actually measure the results as opposed to, you know, paying on CPMs and things like this. But yeah, Eric, I think that you, you, you came into pilothouse after that venture. We were probably at it for two years under you know, a couple brands, brand names and we decided to partner with you to create what is now dtc which we didn't know how it would go. And I think as we, as we talk through this, you know, it's not our story. I think what we're trying to do is share marketing approaches, tactics, get to market quickly, how sales teams work. Our marketing teams work just to help others out there. And so you, we did that and I think, correct me if I'm wrong, but we spent somewhere between 2 and $400,000 the first year on media to feed it. You were creating all the original content. I mean you're still influencing content today. But you have a team around you now. And from that early growth, we didn't know if we were going to get advertisers, but we did know we could back it out in Pilot House. And what we have now, I think, correct me if I'm wrong, there's 175,000 strong brands, investors, marketers, people trying to learn the space. But I believe we were able to make that profitable through Pilot House. The first year it would have been.

[Eric Dick]

I'm just actually looking at our numbers right now. We spent, in our first year we spent about 120,000 to drive. Actually less than that. We spent closer to 50,000 only to drive ads in that first year. But it was pretty much, it was only like Q3 and 4 I think of that year.

[Kyle Hitchcox]

And then Q4 would have slumped you.

[Eric Dick]

But yeah, and then next year we spent closer to like 250 grand. So over those first two years, like, yeah, close to 300 grand we were spending to drive new users into the ecosystem. But it really was those first few days where we realized, you know, where we had a couple thousand subscribers and we went to, I think our friends at Gorgeous and we wanted to say, you know, and this was before any other newsletter, I think had, had popped in the space. There's now hundreds of e commerce newsletters. I think we were one of the first, if not the first, and we just realized, okay, well, can charge, you know, we have 2,000 subscribers, we can charge a thousand for ads because if one of those people, you know, becomes a client of gorgeous, it's 10x value for them. We knew we had the right audience. We knew we by making the content really tactical and strategic rather than just like what's going on in the space, we knew we were able to attract operators. And we saw from the people that were subscribing and the brands that were joining us that we were getting real operators who were looking for an edge in either their job or the brand that they were building. And then we just ran the math to be like, okay, well if we are at this subscriber rate and we can charge this, what if we can get to 10,000, 20,000, 30,000 subscribers? How much can we charge for ads? And we just ran the math and then just sort of took a leap and put, put the money into, into meta ads just like everyone else does in this business. And, and here we are today.

[Kyle Hitchcox]

Well, it's interesting you say everyone in meta ads, I suppose on the, on the commerce side, but I'm seeing a lot of people say that, you know, meta isn't working to drive agency growth or the leads aren't good or whatever, but I think we just actually doubled or tripled our meta spend and I don't know why that is. Maybe it's because we are performance buyers. I don't know. I don't know. But I see a lot of people saying, forget forget meta for, you know, growing your, your agency or whatever. And they're moving to LinkedIn content and posting and things like that.

[Eric Dick]

I think it'd be worth talking briefly about just like, because I think we've talked about the pilot house D2C story quite a bit on this podcast. I'd say maybe, maybe not enough. But really this idea that we're going to grow a media company in order to drive leads. Because the idea originally from the beginning was don't make everything a Pilot House ad. Make everything. Make Pilot House like the person that's hosting the party, like I'm the host, I'm the MC of the party and we invite everyone to this great party about E commerce, we teach everyone a bunch of things and then by the end of it people are asking like, who's the host? Who owns this house? Who's, who's, who's the host of this party? People would then natively sort of discover Pilot House as the brain trust kind of behind a lot of the content that we were putting out there. And then people would kind of join. And since then we've done ads in the newsletter of course, and in our signup flow we let people know that we're Pilot House as well. But what's crazy is it really did, it really grew. This agency as it was the majority of lead source for the first several years for brands. Discovering the podcast, discovering the newsletter and then coming to work with Pilot House worked like an absolute charm through the COVID years. But I wanted to talk a little bit about what. Because I know you were fundamental in the establishment of the Pilot House marketing team, which is what you're talking about on Meta right now, which is this great person we have on our team who's just really headed up marketing and marketing, just marketing Pilot House on Meta, not through DTC or not through anything else, has become a major source of growth, a really two legged stool for Pilot Houses growth. And I was wondering if you could talk about that a little bit.

[Kyle Hitchcox]

Yeah, for sure. Stepping back a bit, I just, I think deal flow, DTC maybe, you know, 80% for the first little bit and slowly drop down. It's more Equal now in the 40, 50%. And that's because we've added different channels and have built more, more holistic. And so meta, Meta is one part of that. It's heavy content, it's normal stuff that you would see case studies, testimonials. But we're, we're using the same tactics that we use for clients. And so we're telling, we're telling real stories, sharing tactics and takeaways. We're not even treating it like as a first session experience. We're, we're trying to build that brand. And so a lot of our campaigns are just there because they look good and it's, it's more holistic and part of that kind of brand, brand halo effect. We're not doing a ton of landers, we're not doing anything quirky like, you know, crazy agency hooks like we'll do X, Y and Z guaranteed flat out, blah, blah, blah, blah, blah. Because that just leads to burn and churn and we're not looking for those types of, types of clients. So I, I think we have the advantage of hindsight at this point. And yeah, as a result, meta is doing well for us. It's interesting. Meta is a little colder. So our close rates on the, on the sales side of that activity can be lower than, you know, the warm DTC listener or subscriber who's read our content for six months, a year and a half, two years, three years, four years, however long that's been. Those, those relationships are faster typically to, to build than, than the more kind of cold traffic sources. But the whole ecosystem supports, supports each other.

[Eric Dick]

Omni, you mentioned no landing pages. What are we actually driving to on the Pilothouse website? Is it just to the contact form essentially, or to the case study and then people find the contact form?

[Kyle Hitchcox]

Good question. We have a team dedicated to drumming up case studies and finding client results and our quarterly surveys and these things. And so we're able to get that content out efficiently and fast and of high quality. So the case study ads match the case studies? Yeah, one for one and then generic, depending on the angle or the messaging we'll send to different pages. Within Pilot House itself, there are a couple landers, but I think they're just kind of stacked client experiences with videos and things like this. It's, it's like a classic, It's a classic Ecom DTC testimonials page. Yeah.

[Eric Dick]

I want to jump into a little bit about how the sales team has been architected, but just real quick, the other source that we're starting to see. I know we just had a lead come in yesterday from it and I'm really excited to see the way this develops is like chatgpt. Like chatgpt people asking CHAT GPT, like who. Who's a top performance marketing agency or whatever. And part of me wonders, like, how much has it helped that we've put so much Pilot House content out into the ether that OpenAI is now scanning and coming up with these results.

[Kyle Hitchcox]

I, I'm glad you brought that up. It's, it's, it is a new channel. I don't know how to control it yet, but we are putting energy into it. I think it's like LLM search. I don't even know the definition of it yet, but basically someone will prompt something like, you know, Best Mushroom Coffee company and then it will generate a response for those that haven't tried it yet. And we've got our fourth inbound in a month and a half. I believe we just qualify. Hey, how'd you hear about us on our exploratory calls? And four of them that we know of have come in through ChatGPT with different prompts. You know, best agency that does XYZ kind of thing. So I think we have a good understanding to your point about content and just the pure volume of content that we've put out, not really understanding this world was even going to exist. I think that is in part why. But we've explored and been trying to figure out the specifics and how Chat GPT specifically functions compared to, say, Gemini and how they're actually gathering these results. And the cool thing is you can actually just prompt into it and ask and ask and ask and it'll get down to like your meta tags and your site and what to optimize and things like this. So it is, it is. They're also prioritizing different channels. So Reddit, Quora, you know, the biggies too. Google or YouTube transcripts are apparently a big source for them. So actually I think we need to improve our SEO work related to Pilot House somehow through DTC in order to feed those transcripts so that the scrapers can get all the right content.

[Eric Dick]

I think that's a great show. We could do that retroactively. We've got all the transcripts for everything, so.

[Kyle Hitchcox]

So it's new, it's new territory, but we are starting to see it happen. And so even just today, the marketing team's running around trying to figure it out. There's an operational movement around it because once you, you Know, this is, you know, if there's smoke, there's fire, but more so if there's data, there's opportunity. And, and so we're going to try to figure it out. We'll let, we'll let you guys know once we figure it out.

[Eric Dick]

Let's talk a little bit about the sales process and how, how has, how has our sales team evolved in these five years from. Because I know I got hired right is our mutual friend Mr. Dan Norcio, who could probably be on this podcast if he's not taking meetings because I think that's what he's done for the past five years is just take sales meetings over and over again. The guy's an absolute machine. And so that we had this early idea of like D2C is going to throw fish in the boat and he's going to dress him up or whatever you do with fish that isn't kill them because you want to help their businesses scale. But talk a little bit about the evolution of the sales process of Pilot.

[Kyle Hitchcox]

House just to shift out the, the marketing team there. Marketing team size 1, 2, 3, 4, 5 people. But then also they're pulling on Pilot House resources. The content teams and department heads will, you know, support them with content creation on schedule and things like this. So it's a pretty monster operation internally. They also work to feed your system. And so there's a really nice kind of feedback loop there where we're rehashing recycling and reusing. So really, really proud of how we've. We've gotten those two groups, three groups to work, work together. The sales team is eight people, give or take. And that's broken into two groups. Well, three groups, I guess leadership, but then also operations inside of that team to keep the, the trains moving. And then certain team members more further along in their career actually have support, support people also to help with scheduling, team organizing and whatnot. And then there's an exec and VP sitting over it.

[Eric Dick]

Talk a little bit about how this. Because I think the sales process has evolved a little bit. It's always been a real consultative kind of thing, especially with, especially in the early days when so many of the leads were coming in warmed up with people that are already like, hey, I saw this method that you do on Meta. I, I heard about how your creative team thinks about iteration. I vibe with that. I think there was a lot of like people that were kind of really warmed up to us in the beginning and that led to a sales process that was like super consultative.

[Kyle Hitchcox]

Yeah, it's, it's always, it's always consultative. Like especially in the agency game, you can't just sell a fixed thing, especially if you're trying to drive results, because you got to adapt and change things sometimes to, to perform. Right. Because if you don't perform, you're not gonna keep that partnership. And so the sales team has grown. So, you know, og you were making content in dtc, I was bridging that. Marketing, onboarding. Dave and Dan were just doing sales and Dave's, you know, now always was the CEO, but now he's managing 180 people across our whole ecosystem. Right. So we've had to build teams around it. Majority of our deal flow is inbound. I'd say we're lucky. But on reflection, talking to you, it's because we created a badass engine and we invested into that engine and it is now evergreen and it gives us space to find new channels and opportunities. So the, the way the, the, the deal flow works, it's DTCs like 30% meta or other paid ads. Channels is like 30% and then the rest is referrals and client expansion, word of mouth type stuff. So, so that's what it is that leads come in. We've changed things a few times over that history where, you know, we had automations going for, you know, call bookings and all this stuff. But we decided in the last year to shift that around and put more priority on first touch in a shorter period of time. So picking up the phone and someone opts in, if they say they want to have a phone call, you just give them a call. And we've really optimized and streamlined our onboarding processes, making things super easy to have those exploratory calls and super easy to find that value moment in the teams. Once that transition from your exploratory sales conversation through to the actual teamwork, which is a hard thing to do as someone who manages. I mean my old title was CRO Chief Rev, right, Marketing and sales and client fulfillment. And it can be challenging to make that handshake from a sales conversation through into a team value moment perfect. But I'm really proud of the team and how they've been able to do that. Leads come in, they're dished based on salesperson's capacity to handle that call and then, yeah, the, the rest of it takes over.

[Eric Dick]

I know there's been an evolution on the pilothouse team from an organization that was, you know, meta when we started. We were meta first and I, and we still may be a meta Meta first agency. That's maybe where our greatest strength is. But we're a fully.

[Kyle Hitchcox]

You mean, you mean DTC or, or Pilot?

[Eric Dick]

I mean Pilot House, like, but because Pilot is a full omnichannel agency at this point.

[Kyle Hitchcox]

Yeah. Where, yeah, we were really, really good at Meta early on.

[Eric Dick]

Yeah. And you've since really. With this really entrepreneurial mindset where you've got these heads of each of the departments in retention, in Google, in CRO, in all these Amazon, all these different aspects that a lot of times agencies really specialize like in one of these, like an Amazon agency. Whereas we've got this like real omnichannel approach. And I know we've sort of like built it so that each of these departments is very entrepreneurial with the idea that they're looking to like create like a good piano for, for, for their department sort of thing. But there was a period where things had the potential to feel siloed, where, where someone would come in, then we'd have to determine the overall strategy for that brand rather than saying, okay, well you need Meta, you need this. And I know we've gone through a bit of a, an evolution with that even just recently in some of the internal channels, seeing some of the big wins coming out from the sort of more strategic department. Can you talk a little bit about that evolution to an omnichannel strategy agency?

[Kyle Hitchcox]

For sure. Well, first things first, we look at our department heads, their teams and the ones and the twos. I guess most of our departments have signaled ones, ones and twos, department head and you know, technical support or teams, team management or whatever it is. We certainly empowered a meritocracy of opportunity in the first forever, and we still do. And as a result, you know, a complex deal with a big brand, you know, could sometimes it would take a month and a half, 2, 3, 4, just to get through the actual needs on their internal side and our internal side to make it, to make it fit. But yeah, at times there would be a little bit of a clash, but everyone would always kind of come around to the opportunity and the actual need for the, for the client. When you're adding an investment cost to a partner, you also have to keep in mind that they're not going to be able to probably invest in all of your services straight away. So you have to be really intelligent about what you're offering. You have to make sure it's going to work. You have to, you have to agree on the plan, on the performance incentives and all these things that it's evolved Certainly, but it's more internal in that we have a different process or handshake between the partnerships team and the traffic teams. And there's. We've broken it up into kind of three clear groups as opposed to eight. And that's really simplified things. So, you know, the team's incentives are more aligned to the client's needs, where you're not just having a bunch of hungry people trying to stack services.

[Eric Dick]

What are the three groups?

[Kyle Hitchcox]

There's Shopify or dtc, which is anything, any traffic that goes to Shopify. As an example, there's the Amazon group, and then there's the post Click group, which is CRO. CRO and fulfillment and warp drive stuff.

[Eric Dick]

And everyone just kind of fits within the str. And then the strategy can be tailored within each of those three groups depending.

[Kyle Hitchcox]

On the brand we've actually shipped. This is really interesting, not easy to do, but if you can imagine. If you can imagine a need and you need an agency and this agency has a bunch of services, your. Your thinking is, well, I could go all over there or I could kind of piecemeal it in, or I could give it a try on a service that makes sense that I need really quickly. Right. We always opt into the first one because we want things to go smoothly. Also, relationships are like, our priority is client profitability. And so what's the best mechanism to find that in the short term? What's the roadmap? What could the roadmap actually look like later? But we're not trying to close a 50 grand deal on a call. We're trying to build a relationship with you. We'd much rather work with someone for five, six, seven, 10 years than, you know, eight months. Just because your billables and processes and things didn't. Didn't match what your. Your perfect vision of what a partnership could be. Right.

[Eric Dick]

I think it's worth mentioning too. I think this is. I don't know if this is now the industry standard, but I know went back in our affiliate days when you looked at agencies like this, most of them are getting paid cost plus, and they're incentivized to kind of like to drive traffic and they know they're going to get paid. There probably are still a lot of agencies that work on this model on like a markup of ad spend, essentially.

[Kyle Hitchcox]

Lots. Lots. That's lots.

[Eric Dick]

That's crazy. It's got to be on its way out. I know Pilot House came into the marketplace five years ago with a radically different value proposal and for how it would be Built and it's essentially the same now as it was then, right?

[Kyle Hitchcox]

Yeah, give or take. It's, you know, it's a percentage of net in Shopify in that team retainers are at cost and we try to make our margin on that, on that performance incentive. I thought spend was going to go away too but honestly I think a lot of brands are intimidated by the data needs. I think some brands or some people or big companies, they just like to know what their cost is going to be on, on their meta traffic. Like it, it is shocking and I just, I just think that like if you think about a big org, like they just need simple things to communicate to their bosses and I think we do a pretty good job simplifying some complex stuff and you know, reporting and whatnot. But I don't know if, I don't know if spend will go away. I mean we've talked about like we have, we're saying no to lots of people. We have, we have deal flow. We're like, well should we just do spend? But we probably won't because it's not our ethos.

[Eric Dick]

Yeah. Because it aligns. You just, it forces you to align when you're, when you're both going after the same profit goal, which is what we need to be successful. We need that kind of communication, we need that kind of speed to action.

[Kyle Hitchcox]

It allows you not to micromanage too because the teams know what they're shooting for. Right? Yeah, it's like get the client ROI tied to the goals of the conversation that you had in your first, you know, exploratory. Like it's, it's all there. But yeah, so the sales team, it's grown quite a bit I think the most just for takeaways from. On the sales team side, we've been lucky in that our sales we call partnerships people, they're going to get mad at me for calling them salespeople. They build partnerships. They were operators in pilot house so they're actual ex media buyers and DTC brand builders and things or their ex founders and startup people. So they know, they know what they're actually talking about. And then I think we're also lucky in that the teams actually qualify the deal like the client is and just a takeaway sales or partnership building, it's a two way street. Right. Like the sales team's job is to find the opportunity to make sure that it's a good fit on both sides and allow the teams to tell the partnerships team if it's not a good fit and they actually get priority. So that's a takeaway or a strategy that maybe could help some people listening.

[Eric Dick]

I wanted to ask just in the growing like Pilot house as an organization, I think including D2C, including warp drive is somewhere 170, 180 people at this point from like 17 when I started. So it's been this massive growth curve. What are. Do you have any like overall lessons or big wins when it comes to hiring or personnel? I know there's, there's probably a few ups that we've had as well. I can think of a few. But I'm curious what, what, what about wins? Any good HR wins for how. Because this is essentially especially Pilot. It's a talent business. A lot of it is like being able to hire and retain highly talented, creative, thoughtful people.

[Kyle Hitchcox]

Our business, we build, we build high performance talent. That is our business. Yeah, I mean focusing on the market and sales side or just generally like where.

[Eric Dick]

Just kind of just general, just hiring in general for agencies, I guess.

[Kyle Hitchcox]

Yeah, it's one of the hardest things to do. I think it's like if you're starting an agency right now, I don't know, I'd reconsider it. It's going to get more competitive. AI's on everyone's heels. If you have a niche and something that, that is scalable, where you're not needing to hire a ton of people to pull it off, go for it if you have something there. But I think going to build a performance agency these days is probably something I wouldn't recommend. With that being said in terms of hiring, filter out people and try to scare them away. I think that we were very lucky. I use that word a lot today, but we just did it. So we really tried to let people know how hard and challenging this industry is. And, and when you, when you say that to someone three, four times and you have three or four pre screens and you're meeting with different execs to, to get in, you're not gonna, you're not gonna want to continue in that path. And if you want to continue, you probably have someone who's at least going to give it a college try. The other side of it is experience can reach ceilings where if someone either comes in with a ton of experience for, for a gig, super hungry, like I want to be this, that, this. Yes. You know, and, and you give them the opportunities, but you know, it just doesn't land for whatever reason. Just know that that's the case and that's okay. If it doesn't work out Even if you work with someone for, for a while and be honest in those conversations, be transparent, be clear. And then the other piece is for scaling people in an agency specifically is just don't overlord people. Don't over process, don't like creativity. Like it in the. You have to be dynamic. You have to have team members who are coming up with new ideas, their ideas. Like, I met with Evan today. He's doing a lot of stuff he said he was going to do a while back. And I was like, I don't do it that way. The way he's doing it is the right way for him and his team right now. And he's had space to go do that. And who am I as, as like in brackets, his boss or whatever to. To tell him he's wrong. The data, the data is right. And so get out of your, get out of your team's way when, when they don't need you also and celebrate those wins.

[Eric Dick]

And even if it isn't the way you do it, like the fact the whole, this whole business is based on like, you can just do. You, you can just do. So like, if you've got someone who's willing to take that initiative, turn them loose sometimes.

[Kyle Hitchcox]

Yep, yep. And if they're not feeling motivated for a while, but you just be like, are you, you doing all right? You know, I'm a little tired these days. Like, okay, like, just take a couple days off. Just come back when you're, you're refreshed, you know, like, all good.

[Eric Dick]

Where do you come down on hiring for? Because I know we've done everything. We've hired people, fairly green people, and now they've become industry leaders in a lot of cases. I think of, I think of a lot of our team leads. They had a little experience coming in. They now are absolute veterans. I know we've also hired some, some hawks, some veterans, some have worked out, some haven't. What do you have to say about that spectrum?

[Kyle Hitchcox]

I'd say, I'd say our team's very experienced. I'd say our team is high caliber. And some people had that inkling and you knew they'd figure it out. Some people surprised you and some people didn't. In those early days, the leadership, strong people come in. We're doing a lot of consultants these days. We're trying to not necessarily like, put a new face in charge of these people who have worked so hard to get to the position that they're in. And we still believe in those people and we see them growing and so we're doing a lot of kind of back end consulting in how we should be shaping our teams and structuring things to move up market more. And that's been the last year or two and that strategy has been great. Always open to new people coming in. But there's one thing that can happen when you bring in someone with experience. If the culture fit isn't right, I can ruffle some feathers, but sometimes you need to ruffle some feathers to reinspire and revigorate. A good example of that is our people and culture team and our finance team. The last couple years just brought in two amazing people that have a, a plethora of experiences that, that we didn't. And if you need that, go do that. Just be cautious of who and how and make sure your needs coming in are super clear and find the right people when, when you need it. Also find hire hire ahead. Even if, like, if you're a smaller agency. Our biggest unlocks have always been hiring the right person, which creates space for you to actually grow your business as opposed to doing all the work.

[Eric Dick]

It's just like, it's amazing to think of how many people that I started with are who predated me are and the people that got hired in those first few years while I was here are still here, still growing their careers, still moving up the chain. And I guess, and I get one of the challenges there is to not have them move out of the doing too much. You don't want a team of managers, these people who've come up doing, you want them to still be able to be in positions where they can do.

[Kyle Hitchcox]

Unless they show that they're better not doing that. And if they can clearly show that and explain it and create those plans and explain how they're gonna build themselves out of a job, automate themselves out of a job, they got free reign to go do whatever they want. But you have, you have to make a plan, you have to show how you're gonna do it and all these things. But as soon as you want a little Runway, go for it. Like, oh, you want a travel budget, go for it, do whatever you want. It's all good. Just, it just backs out. And you know, in that process, a lot of people have excelled and a lot of people have just found their spot where they want to be and where they're, you know, where they're stoked and they're doing great work and love what they're doing and that's okay too.

[Eric Dick]

Can't say enough about the pilothouse team. But to switch to another topic, you've kind of been lone wolfing a little bit on the warp drive product, really trying to, trying to get that product up. And I know part of that has been your foray into LinkedIn personal profile marketing. Just sort of like putting out content. And I've just seen recently you've started to get some real traction. I think in the early days it was a little bit touch and go, getting a few likes here and there. And I know you're still in the early days, but you're getting a lot more traction. It's good to see the progress that you've made. You talk a little bit about what you're doing there.

[Kyle Hitchcox]

Thanks, Eric. Yeah, coming from you, that means a lot. Genuinely. Yeah, it was, I don't know, I wasn't, I didn't use LinkedIn for like 12, 13 years. I guess since you had a fake.

[Eric Dick]

Name on there for a while, I was like, I'd have to tag you and be like, who's this codenamed guy?

[Kyle Hitchcox]

Yeah, we were just building businesses, right? And I had some space and some, some creative freedom and I was like, well, it looks like LinkedIn's the thing if, you know everyone's saying meta ads are dead, I better figure that out. Meta ads aren't dead. But yeah, I think I started with like 680 followers maybe seven months ago. And I'm just about to crest 2000. Learning how to remove yourself from, you know, the introvert in me to post content that you're worried about. Everyone's gonna, oh no, am I gonna get a like, like, is this crap, I don't know what I'm doing? And then you just kind of lean into it, take a chance. And I consulted with some, some experienced people too, agencies that, that I needed help. I knew I didn't have the skills, so consulted with a couple agencies. But I also have a history copywriting just from all of my ad work over the years. So it was kind of fun. But it's an incredible tool if you, if you stick to it. But it is quite noisy and saturated.

[Eric Dick]

How are you selecting the content that you're going to write about? Is it just, it just comes to you? Do you have a schedule? Are you trying to do a certain number of pieces a week? How does it work?

[Kyle Hitchcox]

I was trying to pre schedule everything. I was trying to like do best practices. I was trying to, you know, do all the guru y stuff. But I honestly just get an idea and if I have the space, I stop what I'M doing and I try to type something out and then just keep. It's a journal. Basically someone in the team will say something and it's super cool and I'll just be like, oh, that gives me an idea. I could write about this. Or I'll. I'll be, you know, gardening or building a shed over the weekend and I just have time to think about what's coming up this week and beyond. So, um, yeah, I don't know. I don't, I don't have much structure to it. However, what I have started doing, which I've hesitated on for forever since I started this journey, is lead magnets. Apparently that's still the way to do it at volume and scale. And so my. Once I crest 2000 here, I'm going to shoot for 5000 followers. Hopefully I can get to that by the end of the year.

[Eric Dick]

I like it. Yeah, I saw a recent post where you're like, say this in the comments to get this. And I'm like, yes, that's what's still working.

[Kyle Hitchcox]

Totally. Yeah. And that stuff takes time to write too. So, you know, you're not just pumping crap out. You want to, you want to create high value things. It depends. You could also just do scale shotgun. But like, I'm over prioritizing quality over quantity and I'm not prioritizing it for deal flow. I'm prioritizing as another channel for the pilot house ecosystem.

[Eric Dick]

And you're not using AI to write your LinkedIn content?

[Kyle Hitchcox]

No, the. Sometimes the first drafts or sometimes sticking it together, but I, I always, always end up rewriting it so. Because it's, it's gotta be you. I don't know.

[Eric Dick]

Yeah, it does.

[Kyle Hitchcox]

I hasn't been able to make it perfect yet. I'm sure next week it will, but.

[Eric Dick]

Yeah. Nice. Have you generated any deal flow from it yet or is it still kind of early days just getting your feet under you?

[Kyle Hitchcox]

It's, it's shocking. I mean, I'm also, you know, adding old contacts and from our old lists and people that subscribe to DTC in these things. So I'm, I'm adding enough and deal flow has, has come in.

[Eric Dick]

It's shocking how little of an audience you need. This is my, my best tip for anyone thinking about building B2B content out there. I probably told this story on the podcast before, but I think we had 50 listeners per episode on the podcast in the first or second year of the podcast. And what the, the lead, you know, marketer from Kellogg's was there and so, and Kellogg became a client when we had, I think between 25 and 50 listeners per podcast. So it's like it. You only need the right listener. And in the B2B world, one listener can be more than worth your time.

[Kyle Hitchcox]

Totally. I'm curious, Eric, what. What's your guys's LinkedIn play like? What. What are your guys's plans? What are your channel plans?

[Eric Dick]

Like this year we're just really focused on creating the best content we can. And, and we've done. We've really improved our, our engagement with our, with our advertisers over the last little while. We're really just focused on creating. Is.

[Kyle Hitchcox]

Aren't we working like Walmart now?

[Eric Dick]

Like, yeah, we're working with Walmart. We may. Will be our biggest month ever, which is huge to, to be growing through all of this. And I think we're just, we're reaching a bit of a point where we're a bit of an. Even though there are so many other voices in the space, we're a bit of an institution, I think with the amount of eyeballs that we have. And so we're just doing our best not to take that for granted. We put a big investment into social. Over the last little while. You've probably seen a lot of Heather's stuff that's been really good. But I, but I think, and I do, I do my LinkedIn posts for my podcasts. I probably use AI more than I should, to be totally honest with you. But I think, and I think there's probably a lot more room for me to grow my personal LinkedIn. I think that would be an area that, that I think we could benefit from if I could figure out how to do that. So I must. I gotta watch what you're doing a bit more closely.

[Kyle Hitchcox]

Well, you watch me on LinkedIn, I think I've got the playbook. And then I gotta do what you're doing on YouTube. So let's meet separately and figure it out.

[Eric Dick]

Yeah, it's. And then we'll just keep. And, and we'll just pump all of this stuff to the point where by the time AI is looking, when everyone just uses chat, GPT for their search engine will be so ubiquitous everywhere. That will always get returned in the results, hopefully.

[Kyle Hitchcox]

Yeah, I don't know where it's all going, man. Let's leave it there.

[Eric Dick]

Well, it's funny, we just had. We post one of our big social wins last week was something that I sent the team. That was Zuck's speech essentially about like destroying Me, he was kind of bombastic in it about putting, you know, paid media buyers, you know, out of, out of work. And then I saw, I actually did a little pre interview yesterday with someone from Meta. We Meta's gonna sponsor the podcast, which is great. But they showed me a post that their CMO made on LinkedIn yesterday where he really walked back a little bit of Zuck's commentary about how we're always going to need media buyers. We're just going to free them up to be, you know, do the more creative things that they can bring to the table rather than the number crunching which they'll lead to.

[Kyle Hitchcox]

The Algos, they're always pushing up the stock for the next quarter too, right. So I think that that happened around the same time that they announced that Oculus lost 6.8 billion or something like that. There you go. It's all just news cycles and whatever. It's good that they walked it back though. I'm sure they appreciate that we're, you know, retail brand and advertiser representation and we've kind of co built the business even though he's got the, the amazing high converting platform that we all love and use.

[Eric Dick]

Yep, not dead. That's for sure.

[Kyle Hitchcox]

Not dead.

[Eric Dick]

Nice. Well, thanks for coming to check in with us today, Kyle. If you got it, I'll. We'll put a link to your LinkedIn in, in the poster but you gotta follow Kyle Hitchcox and get in early and we'll watch the, watch the follower count go.

[Kyle Hitchcox]

All right, Eric, thanks. Thanks everyone for listening. Hope hopefully it wasn't too much about us and more about stuff that you can apply in your businesses. And like Eric said, just reach out. Happy to connect and talk with with y' all. Thank you.

[Eric Dick]

Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer Co. And if you want to learn more about Pilothouse's all killer no filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.