There are many schools of thought surrounding monthly agency retainers and whether they're better for client relationships than pay-as-you-go hourly or project-based services. We dig into these topics when Deb Cinkus joins as a special guest on the Outsourcing Oasis Podcast (episode 4, April 2020).
Find out why we believe monthly retainer services are the best way to keep a strong focus on the growth and profitability of a client's business and provide us flexibility to deliver outstanding services as an agency.
Listen to the podcast now and read the full transcript below.
DISCLAIMER: After this podcast was recorded, our company became an official Monday.com partner approximately two months later. Monday.com links on this page have been updated to include our partner links. By clicking these links, your Monday.com pricing and offers will be exactly the same, however, Polished Geek will receive a small partner reward if you choose to sign up.
Charles Max Wood (00:08):
Hey everybody and welcome to another Outsourcing Oasis. I'm your host, Charles Max Wood and we are here with David Hemmat.
David Hemmat (00:16):
Hey, nice to be here again.
Charles Max Wood (00:18):
Yes, and we have a guest this week, Deb Cinkus.
Charles Max Wood (00:25):
Do you want to introduce yourself real quick? Let people know who you are, and what Polished Geek does and all that stuff.
Deb Cinkus (00:34):
Sure, absolutely. I'm happy to be here. Thank you very much for inviting me. Polished Geek is a small boutique kind of a web company. I use that in the most loving way, "boutique" as in small, but mighty. What we do is a lot of website support and maintenance. That's one of the core things that we do.
Deb Cinkus (01:01):
We really do a lot more to help our customers make their websites more effective and more powerful for their business. We do marketing automation, we do conversion rate optimization work. We also do dynamic website personalization, where the website can adapt and share different content based on who's looking at it and what their interests are. Things like that.
David Hemmat (01:44):
Great, can you tell us about the name, Polished Geek?
Deb Cinkus (01:47):
Oh, that actually is a very deliberate name. It didn't just sound cool. My business partner is the "Geek" of Polished Geek and I am the "Polish" ("polish" as in shiny, not Poland!) of Polished Geek.
When we formed the company back in 2009 -- so we're well over a decade now at this point -- we knew we wanted to be a little different.
We knew we were going to be doing web development, we knew we were going to be doing custom stuff.
We really wanted to always be keeping in mind, what's the business value of what we're delivering?
What is the purpose of what we're delivering? We were never just people who, you gave a spec to, and we went off and built it and that was it.
Deb Cinkus (02:26):
We were always making sure that we understood, how can we make it better for the business?
How can we make it more effective?
Polished Geek just kind of ended up becoming the name that stuck with us. It's geeky, but we make sure everything is very polished. Quality is very important to us.
Charles Max Wood (02:42):
What's your background then? Is it business or something else?
Deb Cinkus (02:46):
My background, I worked for many years in the world of corporate enterprise.
I don't know if either one of you remembers a company called Northern Telecom, Nortel from the telecommunication days. I used to work there for many, many years. I was a project manager in the global services division.
Then I spent a long stint as a contract project manager for a company that did software, that was used by a lot of big corporations. I spent time working with companies like Sherwin-Williams, ABN AMRO, Banco Popular down in Puerto Rico. I spent a lot of time down there.
I have a lot of wide industry experience, doing all kinds of business process development and putting things into place, to make our software again, work with their business.
Then the last corporate role that I had, was working at Fidelity Investments. I was a director of project management for internal projects.
Deb Cinkus (03:49):
I did a lot of large scale multimillion-dollar projects. Nothing like what I do now, but these are all skills that have been very handy to me in running Polished Geek and in delivering projects for my companies that I work with. I understand how to put together a business case. I understand how to look at what the business value is and how to phase things out.
Deb Cinkus (04:16):
I'm used to working with all different types of people in development, programmers, business analysts, salespeople, et cetera. All of those roles were people I had to interact with for many, many years.
David Hemmat (04:28):
Yeah, so that's it. Pretty interesting. One of the... I guess it's a theme we touch upon fairly regularly. It's the difference between large, well-funded projects and then smaller projects.
It seems like you've had a chance to be on both sides.
What would you say is transferable? What would you say needs to be adopted?
Are there any things that stand out to you?
Deb Cinkus (04:53):
That is an excellent question. Let's see, so I mean, other than the obvious budget things, going 5% or 10% over a budget that is millions of dollars is pretty bad.
Honestly, when you're working with a company that has that kind of money, it usually just becomes an exercise of, write up a good case for why the additional funding is needed.
Put it up through the right people, and eventually, you get your extra million or your extra couple of hundred thousand.
It's not even 10%, it's not that easy if you're dealing with a company that has a $10,000 budget. That's a lot for them because that (budget) might not be there for them.
Budget-wise, it's not a question of 5%, 10% difference. Okay, it's more meaningful.
At the smaller levels, you really got to look at what you're doing there.
I would say that on a big project, the problems, of course, are coordination. If you're working with all these huge different departments, they all have competing priorities.
Deb Cinkus (05:58):
Maybe that manager doesn't like this manager, all those kinds of things that go on in a big corporate thing. There's politics and all of that.
In smaller companies, you often might be working with one or two people. Some of our clients, we do have mostly B2B clients. A lot of them, there are several contacts that we deal with who are in different departments.
In the end, there is usually only one or two in each department that we're dealing with. We're not dealing with a large group. It's usually a little more clear who gets a say.
They don't tend to do things as much by committee, which makes it a little easier to get a decision.
Deb Cinkus (06:36):
When I need a decision. and I need a decision about some functionality that's going to maybe make it into this phase versus that phase, or we're going to take this marketing approach and we're going to use this copy or whatever, I usually have one person I can go to. One person who has gotten to know me, we've gotten to know them.
We can make the case persuasively of why we think this recommendation should hold.
Generally, we don't have to listen to, "Well, let me go off and talk to everybody, and I'll get back to you in two weeks at the next quarterly meeting or whatever." It's usually a decision that's pretty quick.
Deb Cinkus (07:10):
There is a little bit more... just a fluid kind of work style that you get, because you have less people to deal with and there's less politics and baggage because there's not all this hierarchy.
I have to say that I like that. I like the fact that we can get in there and get things done. Talk to people and really get to know the client on a deeper level.
Deb Cinkus (07:32):
When you're working with big enterprises, it's more difficult. Then people move around a lot, they get promoted, transferred, whatever.
You can be working with somebody and they're gone. You work with a small business, a lot of times we're working directly with owners. They're not usually going anywhere.
Deb Cinkus (07:50):
Maybe one of their people will move on eventually, but a lot of times the core group that hires us and chooses to work with us is who we get to keep working with. That's also nice too.
David Hemmat (07:59):
Yeah, that's an interesting problem you're mentioning. I remember one particular client that we worked with at Blue Coding and they hired us.
I mean, actually, Charles we heard from them because they were listening to Ruby Rogues. Somebody in there listened to Ruby Rogues, that's another (podcast) show that Charles manages.
David Hemmat (08:26):
I think it was their director of engineering who reached out to me and he said, "Hey, we're looking to staff our team." They needed a couple of people back then, and the team that we built for them grew to like eight people.
Yeah, but what happened was, we kept getting handed off to other people, right?
Deb Cinkus (08:43):
David Hemmat (08:44):
First, so we had an accounts manager that would deal with somebody. Then after a month, we'd send the time report and we get emailed back and say, "Oh, this person is no longer in charge of this project. He's been moved to this other department, please reach out to person B." Then a month later, that would happen again.
At the end, we had like five different contacts within the company. Two developers were under one guy and three were under the other.
We never knew what was going on. It was difficult to get feedback. It was difficult to set up meetings with them.
Especially because the work that we do at least through Blue Coding is... it was staff augmentation.
David Hemmat (09:19):
We weren't involved in the day-to-day operation. It was more of finding the right people and then making sure they continued the work.
We weren't having weekly conversations with the manager in charge of each specific project. It was rather, we'd check in once every two weeks, just to make sure things are going well.
David Hemmat (09:39):
Then once every month, we'd like to have a little bit of a deeper conversation. Those were always difficult to set up, because we weren't providing them all that much value directly, at least to that manager.
He just wanted to deal with the developers and we needed to make sure everything was okay. It was kind of tough in that sense.
Then we also find that in small companies, sometimes the opposite happens. Which is, the owner does everything and the owner is too busy.
Charles Max Wood (10:07):
I'm sure you've come across that.
Deb Cinkus (10:09):
Oh yeah, absolutely. We've come across that. I mean, I think-
Charles Max Wood (10:17):
I do... podcast sponsorships is usually what I'm selling. Yeah, we'll send the invoice in and it's, "So-and-so is not with the company anymore."
We'll get handed off to somebody else, handed off to somebody else. "Oh, well, we hired a new CMO," and yeah.
Charles Max Wood (10:34):
"Yeah, a podcast is not part of our strategy this quarter. We're not going to pay the invoice and..." because I make people pay up front. If they don't, I'm not out anything, except for money that I might have been planning on.
Yeah, it happens more than you think. Different companies at different levels have that problem or not, so yeah.
Or I've been delegated to somebody else and yeah, they're busy or... yeah, anyway.
David Hemmat (11:02):
Yeah, you know what? At the agency level, we've had projects that maybe haven't been lost, but they've gone down significantly, precisely because of staff rotation on our client's side.
We had a great... at Resolve Digital, we do a lot of eCommerce. We generally deal with VP of marketing, digital marketing manager, that kind of role.
We had a great digital marketing manager, two-year relationship, everything is great. One day she sends a notice in and she said, "Hey, I'm quitting and this will be your new point of contact."
It seems like the company was undergoing some significant changes at the time. Every two months or three months, we'd be told, "Oh, this is the new person in that role."
David Hemmat (11:44):
Then that person would move. What happened was, we went from having a steady project with a lot of hours every month to nothing, because nobody knew what was going on the client side. We couldn't get anything done, yeah.
Deb Cinkus (11:57):
Yeah, I absolutely feel for you with that. We've seen stuff like that too, that the turnover leads to the new person.
They're like, "I didn't choose you. I have my own way that I want to choose to spend my budget." Or maybe they'd rather hire in-house.
Deb Cinkus (12:13):
They want to make a case for that, so then they start using you less and less. Or they start just literally giving you less direction and less stuff, so they can kind of point to, "Oh, it's just easier if we work with someone in-house."
I have to say though, that sometimes it works out when someone leaves.
Deb Cinkus (12:30):
We've had one client who was at one company that is still a client of ours today, and this was like five years ago and he worked there for several years. He's the one who brought us in over there.
He left that company eventually. After about six months or so, he suddenly called us again out of the blue and, "Hey, I'm at this new company and I want to hire you."
He brought us in over there too, and that client is still a client of ours and he's left that one.
Now, I'm just waiting for the third phone call. (Laughter) I'm just hoping, eventually... I mean, it can happen.
If someone is a really big fan of you, they know what you're like.
Deb Cinkus (13:07):
I mean, we've had the comment made of, "You guys set the bar for how well I expect a vendor to work with me. How well I expect them to partner with me," because we really don't just throw that word partnership around.
We want to be a seamless extension of their business. We want to be their remote web people.
We are remote, but we want to make it super easy for them to communicate with us. Super easy for us to do the right work that they need done.
We work very hard to go above and beyond. We're always giving suggestions, feedback.
Deb Cinkus (13:40):
If I don't hear from a client for about a week or two, I'm going to reach out to them. "Hey, you haven't been using your care plan as much." Or, "Hey, we've got some work we have on the table, that we believe should be done next month inside of your marketing retainer. Here's what we suggest."
Then we proactively go after them, because you're right, they get busy.
The last thing you want is for them to turn back and look at three months of you not talking to them, because you're like, "Woohooo, money is coming in and they didn't ask for anything, awesome."
That's not being a good partner. That's not going to keep you with that client long term and that's not going to make that client successful.
Deb Cinkus (14:16):
I mean, I do think it's on us as companies that people outsource work to, to go after pursuing that conversation, when they start to not utilize you as much.
Now, ours is when those things were. they're not paying by the hour. We don't do that.
They pay a monthly thing, and they get a certain level of service depending upon what they're paying for.
There is none of this, "Oh, this month we only need 10 hours. This month we need 40 hours." We don't have that kind of relationship with them.
Deb Cinkus (14:45):
Genuinely, if a month goes by and they don't use much of their service, they're out a month where they could have been doing something to get their marketing ahead.
Something to get their marketing in a better position to compete against their competitors, but it's just been lost. It's not like they've saved any money.
So, we proactively will go to our clients and say, "Here's what we suggest. Here's how we think we can bring you some value this month," if they haven't actively asked for something.
Charles Max Wood (15:12):
It's funny you talk about that because... and I've had the same experience.
When I was freelancing... or sometimes I was just freelancing myself, and sometimes I was freelancing and I had subcontractors that worked for me and so they'd hire a whole team.
Yeah, I had some folks that would come back, and they'd move on to a new company and they'd hire us to come in and work with them there. Then we'd have other folks that I'd wind up talking to and trying to get to hire us for the first time.
They'd be like, "Well, I've worked with outsource companies like you before, freelancers like you before and it didn't go well. I'm really worried that this isn't going to work out."
I mean, it's hard. It's hard to say, "Okay, well, we're different, and here's why." Eventually, I wound up outlining sort of what you talked about there.
Charles Max Wood (16:01):
We're going to communicate. We're going to communicate this often, we're going to communicate in these ways. We're going to make sure you have all the information you need, and on, and on and on.
By having those kinds of conversations, I was able to close them. Then as I delivered on those things... yeah, some people were really good at following up.
Getting back to us and knowing what we were doing, and knowing what... yeah. Some people were really not.
At the end of the day, when they came back and were unhappy, we could ask, "Well, have you been getting our emails?"
Type, type, type, type. "Yeah. Oh, I see."
"Have you been getting our messages in Slack or text messages?" Or whatever we worked out.
"Oh yeah, I did see those."
Then it's, "Okay. Well, we're really trying to make sure that this is successful."
Then you have another conversation. You kind of train them to pick up on that stuff.
David Hemmat (16:50):
Yeah, so I had a... not a funny experience, but I had an interesting experience just a couple of days ago.
Where one of our older clients that we haven't been doing much work for reached out and said, "Hey, are you guys still working with us? The invoices are really small."
I said, "Yeah, back in December, you asked us to cancel your retainer and you wanted to do an hourly engagement. Then you haven't asked for any work."
Apparently... I mean, and she had work to do. She had apparently just been busy and didn't reach out to us.
David Hemmat (17:25):
My team was busy with other stuff and we didn't reach out to them, because they had specifically said, "We don't want a retainer, we just want to call you whenever we need work." Yeah, it's a tough situation.
Deb, I was just thinking about what you said, you don't do hourly. Can you tell us a little bit about that?
David Hemmat (17:39):
I'd like to think about that from the client's standpoint and also from our side. It's something I've been tempted to do.
We have clients that... their business is down. Especially now, we've had a couple say, "Hey, our business is slowing down. Can we cancel our retainer and just have you guys nearby if we need you?" We're usually open to that.
David Hemmat (17:58):
My development team, and especially our director of engineering hates it. His position is, that makes it much more difficult to work with these clients. It's much more difficult to allocate resources and make sure we can get to them in time. "Can you just bring me retainers only?"
My position on the business development side is like, "But we want to take care of these people who have been our customers for the past few years."
Can you tell us a little bit about your decision?
Charles Max Wood (18:25):
Can I jump in here real quick? This is an open debate on the Freelancers Show, just so you know.
David Hemmat (18:31):
Charles Max Wood (18:32):
Charles Max Wood (18:33):
Hourly versus not hourly. It's funny because when we started out, we were very pro-hourly.
Then we got Jonathan Stark on and he started convincing us to do value-based pricing.
Now, so a lot of us are on board with the value-based pricing, but we have one or two people that are kind of on that weird place, where hourly has really worked for them and has been a lot easier for them to manage.
I'm curious where you've seen the trade-offs.
David Hemmat (19:01):
You're going to have to tell us about value-based pricing.
Deb Cinkus (19:04):
Yeah, I know Jonathan Stark as well. I'm also someone who follows him, so I know who you're talking about and he's very convincing.
I know it doesn't show up on a podcast, but when David was talking there about, that it's harder to work with that kind of client and hourly is not as fulfilling and not as easy to manage as retainers, I was vigorously nodding my head, yes.
Deb Cinkus (19:25):
Yeah, it's really what it comes down to. I mean, okay, so from an agency side, we can look at the perspective of, "Hey, recurring revenue is super important as a lifeblood of your agency."
Assuming someone doesn't get to cancel or something like that, you know within a reasonable way how much you're going to get next month and the month after that and the month after that.
That's helpful for a business. You can plan, you can grow, you can invest in your team, those kinds of things.
You know that you've got this base amount of core revenue you can count on. Then maybe you do special ad-hoc projects or bespoke work or whatever, in addition to that. The retainer really is good stability.
Deb Cinkus (20:10):
I don't even know who said it first, but somebody said something that has always stuck in my mind, "You owe it to your clients to stay in business."
Having recurring revenue helps me as a business, stay in business to serve my clients.
It doesn't help anyone if I have to go through a feast or famine cycle of, "Well, this month suddenly nobody needed anything, so we don't have any revenue."
Now we're having to cut back. Or I'm having to let someone go, who's worked with us for four years.
These are not healthy things for me when I'm delivering them to the client.
Deb Cinkus (20:42):
I can't deliver the best service without the best team as a service agency. Now, that's all from the agency point of view.
From the client point of view, I know some people are tempted by... they want to pay hourly. They're like, "Oh well, then I only pay for what I use."
Unless clients are so... let's ignore the COVID-19 thing going on right now.
I know everyone is having financial challenges with this for the most part. Unless you make sanitizer, in which case you're fine. If you're Lysol or somebody, you're okay.
I mean, pretty much everybody is having trouble. Let's ignore that. That's unusual, an unprecedented event. Let's just talk about normally.
Deb Cinkus (21:23):
Normally, if a customer puts their work into hourly, they sit there and they think about the money every single time they're going to make a decision.
"Do I really want this? Is it worth three hours? Is it going to be six hours?"
Then as the agency, that client is always going to be asking me, "How long is this going to take? What's the price tag going to be on this? Et cetera.
We collectively, them and us, spend time talking about, how much is this going to cost?
I would so much rather have the conversation about, how much revenue is this going to get you?
What is this going to deliver to your business? Is this is going to save you money?
Is it going to automate a process? Is it going to get rid of this nagging thing you've always wanted to get rid of? That you wish it could be better about how your systems run and communicate.
Is it something that is setting the stage for long term growth?
Deb Cinkus (22:11):
Let's look at how we can make your business improve, instead of making decisions based on hourly numbers.
It's easy for me to say that when I do virtually everything retainer-wise. A client can be on a couple of different retainer levels. There's not just one.
There are some levels. What I always tell clients... and when they work with me, they realize I'm telling the truth. I'm telling it like it is.
Which is, "I'm not going to sit here and count up your hours."
If after a couple of months, I don't feel like you're asking for support at the level you and I talked about...
There are some numbers in the contract, they have to be there. The contract is what people pull out when things don't go well. If it goes well, we should have had a good conversation.
Deb Cinkus (22:56):
We should say, "This is what to expect. This is the service that you're going to get."
We write it all up, we put it in writing legally, we sign it and we put it in the drawer. We hopefully never need to touch it again.
The only time we should have to go to that contract is when something is not going well for somebody. It's the only time we should have to do that.
When a customer is signed up for a certain level, if after a few months we feel like, "Wow, this is not the level that we agreed to. This is not that level of service." (If) we're giving them far more than what they're buying, it's not fair and equitable. Then I'm going to have a conversation with them.
Deb Cinkus (23:34):
We're going to just talk. We're going to get on a Zoom call and we're going to have a chat.
I'm going to say, "Look, this is kind of like what's been going on. I have good records about what's been going on."
Again, I'm not going to do it by hours. I'm not going to sit down and go, "Oh, your contract, your retainer was up to 25 hours a month and you used 35."
You know what? There are times when some months people use more than others. The way I feel like is, as long as that wave goes up and down and around that middle line, and it comes out kind of even where they're getting good value and we're getting good value.
(When) we're able to be profitable and they're able to grow their business, then everyone's happy.
Deb Cinkus (24:11):
It really frees us up from having to have discussions and justifications about, why someone took four hours instead of two. These are just not places I want to spend my time, and these aren't the kind of value-added conversations I think I should be having.
David Hemmat (24:31):
That's an interesting-
Charles Max Wood (24:31):
"I don't know, my brother-in-law said that the work you did should have only taken you a half hour."
"It took you three hours, and so I'm only going to pay you for a half hour." (Laughter)
Deb Cinkus (24:44):
Yeah. Well, yeah. Exactly, and if I'm not working hourly, that conversation doesn't happen. It doesn't happen at all.
Again though, if you're going to work this way with a client, you have to be willing to take the responsibility of, "Let's proactively go back to them if they aren't using it at the right level."
If we really look at them going, "We haven't really done much for them, and they're paying for a level of service that they just don't need," or whatever.
You have to also be willing to go back to them and go, "How can we make this more valuable for you? How about we do something for free for you?"
Deb Cinkus (25:18):
Free being, of course, you've been paying for it, but you know what I mean.
Let's proactively suggest something they haven't even asked for. We do that. We will occasionally go to clients and say that.
There is a client who's been on care plans with us for about four years, and our care plans specifically exclude doing major rework, like completely redesigning your whole site. That's a whole separate project, that's not ongoing monthly kind of stuff.
There was a point where... she'd been a client for a very long time and it frankly needed a refresh.
The minute any of that kind of came up in our conversation, we said, "Yeah, okay. We're going to do that and we won't charge any extra," you know?
David Hemmat (26:02):
Deb Cinkus (26:03):
That was one way that I rewarded that longevity of being a client with us.
A new client that came and signed in March, and then April turns around and goes, "By the way, now I want you to do a full redesign."
No. A retainer package that doesn't have strict hours accounting and limit is not a way to get a bunch of "free" work.
David Hemmat (26:23):
Deb Cinkus (26:23):
It has to be fair. If they don't feel like we are being fair with them, I want them to tell me and we'll have a conversation and vice versa. I will tell them.
David Hemmat (26:33):
That's really interesting, because yeah, I'm thinking about it from the client's perspective.
We do a bunch of different work. I've come across a whole series of these problems.
The hourly ones are the ones we dislike the most, because they'll call you on Friday and say, "This has gone terribly wrong. Can you get it done now?"
We're like, "No, we've planned the week around the whole bunch of other retainers that we have and they need constant work."
Then you have an unhappy client that needs to wait until Tuesday, Wednesday whenever, so we can get to that thing. That's one case.
David Hemmat (27:06):
On the staff augmentation side of things, the issue we've seen is, we occasionally did agreements where we'd say, "Hey, you're going to have a full-time person. A full time as 160 hours a month for us and we'll charge you X per hour."
What would happen is, suddenly they'd start slowing down, so 120 hours, 110 hours.
Then just suddenly, it doesn't make sense to us, because our margins aren't that high on that kind of work.
You would just reach out to the client and they'd tell you, "We're just going through a slow phase."
Then we started thinking, "Well, maybe we need to change our retainers." To say, "We'll charge you 160 hours and you can do less if you want," right?
Deb Cinkus (27:49):
David Hemmat (27:51):
Then I'm thinking about it from the client's perspective.
One thing I've come across as a client, I occasionally also buy services is, as long as I feel like I'm getting value, I don't care what you're doing, right?
Deb Cinkus (28:04):
David Hemmat (28:05):
We have employees and contractors that are just really good at what they do. I don't care to look at their time logs. I don't care what they're doing.
I'm getting results and I'm paying for them, I'm happy.
When I start feeling like I need to know what they spent their last eight hours on, that probably means that I'm not feeling happy with the results, right?
Deb Cinkus (28:25):
David Hemmat (28:25):
Maybe it's time to reevaluate the relationship. Often times, it just comes down to communication.
The person or the team might be doing great work, but they're not telling me about it.
When all I'm seeing is invoices coming in, and work not progressing the way I expect it to. That's something to take care of.
Deb Cinkus (29:25):
Yeah, it is. Absolutely, yeah. I would prefer to have people on retainer and be able to be flexible of, "You know what? I know something that's coming up that we need to prepare for."
We know that there is something in the next month or two that has to get done, like a major system update.
Or maybe we have some work that we can work on ahead of time, on spec'ing out something that they've talked about wanting to build.
Maybe we can do a little competitive research for them.
There are things that (retainers) give us the latitude to do, to better contribute to being a successful partner with them and helping their business grow.
Deb Cinkus (30:02):
That, when you're by the hour, the client's going to turn to you and go, "I didn't ask you to do that, so I don't want to pay for it."
Well, if you're on a retainer and I know that my guy is not getting a lot of requests from you, I'll tell him to do something else on your behalf.
I'll tell him to go out and do some competitive research. I'll tell him to go out and do some SEO stuff.
I'll tell him to start doing some testing on maybe one of the new pieces of development, that we normally could have waited a few weeks to do. We'll go ahead and accelerate it and bring it up faster.
I'll make sure that something is being done for their behalf, but because the price doesn't change to them, they're paying the same thing every single month, there are none of those conversations of, "Well, I didn't think this needed to be done. I didn't ask you to do it, so I don't want to pay for it."
Deb Cinkus (30:47):
Then during the month that they ask us for extra, okay, so this is something where again, a client has to be established and it has to be somebody that you have a good working relationship with. You can't have someone sign on next week and then do this.
When this whole COVID thing started happening, we have a couple of clients that are having to practically reinvent themselves.
They're having to completely shift their business models online. Their revenue streams are impacted significantly.
I had one of them that's worked with us now for two years. They're on basically our flagship program, conversion rate optimization. We do A/B testing for them. We do a lot of stuff for them.
Deb Cinkus (31:27):
They said to me, "Hey, we're getting a lot of pressure from the executives. This is a big problem for us. What will we have to pay you if we need you to work over a weekend or something like that?"
I said to them, "Under normal circumstances, our nights and weekends are charged extra." You get 24/7/365 for emergencies.
Emergencies being, "Our website's down, it got hacked." or something like that.
I always tell customers, "If you hire us and something happens to your website in the middle of my Christmas dinner, I'm going to get up. We're going to take care of it."
You have 365... but just asking us to add new products to the site or asking us to change the homepage, well, that's not an emergency.
That normally we wouldn't do that nights or weekends.
I said to them, "This is not normal circumstances. We really value you as a client, we know what you're going through. We're not going to charge you any extra."
Deb Cinkus (32:22):
We have actually put in a decent amount of weekend work and some nights, to help them get their business completely shifted to this new model that they've got to do. They really appreciated that.
We want to see them get out of this hole that COVID has thrown everybody into.
I can do that, because we have this long-standing trust with this client. That they're not going to take advantage of it. They're not going to abuse it.
I mean, that isn't something normally that we can do. I certainly can't afford to be paying my people overtime to do that and not charging a client, right?
David Hemmat (32:54):
Yeah, we'll do that occasionally. When we have a client that's going into financial difficulty, and they still need to get something done because it has to happen, either we'll do it upfront for them and charge them later. Or we'll do it for free if they've been around for a long time.
I guess it's on a case-by-case basis. You have to decide what you want to absorb or not.
The way I see it, if we keep one of these clients happy, they'll eventually come back when things get better, yeah.
Deb, last time we spoke, you were telling me about how you ended up in Guatemala. Do you want to tell that story?
Deb Cinkus (33:34):
Yeah. Well, I mean, I was telling you much earlier about my original days in the enterprise world, working at big companies and everything. Then now I have this small company, less than 10 people.
Most of us... what we kind of considered our core team, we were all physically located in the Raleigh, North Carolina area. That's where we were.
Deb Cinkus (33:54):
I had raised my children in that town. We'd all lived there for a very long time and we were always 100% virtual office. We never had a physical office.
We never actually deliberately sought local customers in that area. We always served worldwide.
Primarily the United States, but we've had customers from Malaysia and France and everything else.
Deb Cinkus (34:18):
We were already kind of mostly used to working remotely. Everybody would come over and sit in the house and work. We actually had a couple of rooms in our house that were actually set up as home offices, with regular office furniture and everything else.
Every now and then people would get kind of stir-crazy. They're like, "We need to change the scenery."
There were a couple of places we liked to go to work. We'd drag all of our laptops to Starbucks of course. We also... we had this really nice Indian restaurant nearby.
They had a great lunch buffet and they completely humored us. They let us come in and get a big table.
We'd work while we got Indian food and we'd talk or whatever. They just loved seeing us come in.
Deb Cinkus (34:57):
Anyway, one day, we're sitting there at a coffee shop and somebody says, "Okay, so we have these awesome jobs. We can do them anywhere. It literally doesn't matter where we are as long as we have internet. Why is the most exciting place we're going is Starbucks in Cary, North Carolina? Why aren't we going somewhere more interesting?"
I think we were just all at the right point in our lives to go, "Yeah, let's actually talk about that."
Nobody had kids in school. Nobody had anything that they just felt like they couldn't make a change in their life. There were no barriers to that.
The whole group started... the six of us really started talking in earnest about this.
Deb Cinkus (35:37):
We looked at all kinds of things that we could do. We looked at just going on the road for a while.
We actually looked into how much it costs to rent a tour bus. I'm really glad we didn't do that because that would have been insane.
Charles Max Wood (35:53):
Deb Cinkus (35:53):
We looked at that, and then we just really started saying, "Why don't we look at doing something really different...?" At the time, it was crazy.
"Why don't we look at living abroad for a while?" Become digital nomads in the real sense. We looked at a bunch of different countries and everything else.
Guatemala won because it is easy to get back to the States. It's not like you're in Europe or whatever. The time zone is kind of lined up, halfway decent.
Then the cost of living certainly was a consideration. Then we actually knew someone in Guatemala, so it was like one of the only countries where we actually knew someone on the ground in the country.
That if we had a problem we could go, "Help!"
Then we chose what is a pretty touristy area. There was a decent amount of English. It's not a huge amount of English, but there was a decent amount of English.
We're not 100% nuts. We didn't just move. We did bring everyone down for a month.
Deb Cinkus (36:55):
We came down for a month and we stayed here. We stayed, we rented a house. If you stay in a hotel or something, that's not real life.
We stayed in a house, and we explored the area and we saw what real life would be like.
We dealt with the whole language frustration and all of that and everyone loved it.
Everybody was like, "Okay, yeah. I really want to do this. I really want to live here."
We all went back at the end of the month, and we all began to get rid of all the things we had to shed to move.
I sold the house, I sold the car. I sold almost all my furniture. I gave a bunch away to family, donated a whole bunch of stuff.
Deb Cinkus (37:39):
I basically got myself down to a couple of suitcases. That was my life, a couple of suitcases.
There are still a few things stored in a smallish kind of box in my daughter's house. That's about it. A few things I didn't want to bring with me, but they were like mementos, like pictures and stuff like that.
The others all canceled their apartment leases or sold their stuff, sold their cars, everything else. We took six people and four cats, and went and lived in one house for a year.
And a year was enough. (Laughter) It was a lot of togetherness.
That was kind of tough. I kind of think that you probably could have made a TV show out of it, kind of like Silicon Valley.
Deb Cinkus (38:21):
You definitely could have done something like that, because there were times it was pretty amusing. Times when we had all kinds of crazy things happen with cats, because houses are very open here in Guatemala.
Cats kept escaping and showing up in other people's houses, and all kinds of stuff that we had to deal with.
At any rate, we all really liked it and we all did the year in the same house. Then after that, we said, "Yeah, that's enough togetherness."
A couple of people were mostly done with living outside the US. They were like, "I'm kind of over this now. This has been fun, but I'm ready to go back to the United States. Drive my SUV, and have malls and more than two brands of ketchup to choose from in the store."
Deb Cinkus (39:02):
There are just things you just can't get here. The rest of us really liked it.
I never intended to stay this long. I've just really loved it here.
We're still here in Antigua. A couple of people live at the lake (Lake Atitlan), a couple of people live in Antigua. I mean, we can do our jobs anywhere.
Really, no reason why we can't do them from wherever we want.
David Hemmat (39:26):
Well, that's an interesting subject. How do your customers feel about that? Is that ever a sticking point in conversations? I'm asking because I operate a remote team too.
I don't know, we have a team that's spread across Latin America. We have one person in Spain as well.
A lot of our clients will often ask like, where are we based? I'm wondering if that's relevant to them at all. We feel it's not, but-
Deb Cinkus (39:57):
Well, yeah, I think it is...
David Hemmat (39:57):
I feel like our clients sometimes do. Ever get that feeling?
Deb Cinkus (40:00):
I think it is relevant where you're based, but that doesn't mean that's where you physically have to be. I say that, because we do have clients who want to know that when they sign a contract with us, that they're signing a contract with a properly registered, tax paying LLC in North Carolina. And they are.
That is where we're beholden to. We are a North Carolina business, all of our banking is there. All of our servers that we lease from different datacenters, are all in the US. We don't have anything else.
It's just the people that are working remotely.
The two things I found that clients care about is one, legally, where are you, right?
David Hemmat (40:37):
Deb Cinkus (40:37):
They want to know that they have a contract with a US-based entity.
Then secondly, they just want to know that they can have good communication with you.
By good communication, I don't just mean that they can call on the phone and you'll answer. You can, we have a 919 phone number, it rings us down here.
It's not just about that. It's about, that we can get on the phone and we understand each other.
That we have a cultural understanding, that we certainly speak English well. That we're going to understand what they write, that it's easy to communicate with us and that's what matters.
Deb Cinkus (41:09):
Generally, I have found that I'll have people call. Cold leads will call sometimes on the phone and say, "I found you online. I was looking around, you guys are just down the street from me."
And I always go, "Well, not exactly."
If you're really wanting to be able to sit down over a cup of coffee in-person, at that Starbucks in Cary, North Carolina, this isn't going to work.
If what you really care about is someone who gets you and understands you as a US business, and understands your clientele and understands your marketing and everything else, then that's it.
Usually, the minute we start explaining that, they're usually fine with it. They're talking to me, they can tell English is not my second language and all that.
They find it's very easy to get ahold of us.
Deb Cinkus (41:56):
They know legally they're protected because we're a US company.
Generally, it's fine. There are a few are like, "No, I really want to be able to meet in person."
David Hemmat (42:03):
Oh yeah, we don't want to do that anyway.
Deb Cinkus (42:04):
Oh yeah, we're not within-
David Hemmat (42:04):
You're not right good fit for us.
Deb Cinkus (42:08):
When I was in Raleigh, that isn't really what I wanted.
The whole drive to the thing and sit for an hour, then... it's more effective to me, "Let's get on a Zoom, and let's have a conversation. Let's go through some visuals. Let's screen share and stuff like that."
People who feel like they cannot work unless they are face-to-face... and I think nowadays, even those people might be having a little bit of a change of heart.
People who feel like that's important, that they have to have that to work with somebody, are probably not going to be a good fit for us.
They wouldn't have been a good fit years ago when we were living in North Carolina. They're certainly not a good fit for us now.
I mean, they do ask and they do care. There were one or two clients who didn't take it well. Who felt like, "Oh my gosh, you've gone offshore. That's horrible and unpatriotic."
Deb Cinkus (42:56):
There were a couple who didn't... but I've always been very, very candid with people. "This is what our situation is. This is where we are. This is who we are. My people are US people."
I do have some employees in the Philippines.
They are people who work directly for us. They've worked with us for years.
I don't have companies that I send stuff to, or that I have no idea who's going to work on your thing next week.
It is dedicated people that work exclusively with us. That really helps.
Deb Cinkus (43:28):
Pretty much the main people who talk to the clients are myself, my business partner, a couple of the other people who are US-based people.
They get on the phone, they get on a Zoom and they realize that there's no problem working with us. It doesn't matter where we physically are.
David Hemmat (43:41):
Yeah, it's so funny you mentioned the Philippines. We've had a few people on the show already mention the Philippines as places that they've hired people.
I'm wondering how that happened. How did the Philippines, which is not a very large country, become that hub.
Yeah, that's a pretty interesting story of how you got there.
Charles, I want it to hear from your perspective. I know you did a lot of freelancing work. I don't know if you still do, but I'm sure not all of your clients were near you.
Charles Max Wood (44:11):
David Hemmat (44:12):
You had people across the US as clients, right?
Charles Max Wood (44:15):
Yeah, let's see, I had one client that was... one of his daughters lived here. In the same city I live in. He would fly out every month, and he would take me to lunch and we'd sit down and we'd hash stuff out.
I had him pretty early on. I had a couple in San Francisco Bay Area, a couple in New York Area. I had one from Hong Kong, which is kind of interesting because they were offshoring.
David Hemmat (44:48):
To the US.
Charles Max Wood (44:49):
I had a couple in Europe. Again, that were offshoring to here.
Again, a lot of them I met, because they listen to the podcasts I'd get on. I'd say, "Hey, my contract is ending."
They'd be like, "Oh, we got to get him." Yeah. I mean, some of them were kind of hard to figure out, because banking across borders is tricky sometimes.
David Hemmat (45:13):
Oh, I know. We spent I think $700 on wire transfers last month.
Charles Max Wood (45:18):
Yeah, and I've also had people work for me from Brazil, Jamaica, Argentina. Argentina was super hard to figure out.
David Hemmat (45:26):
Charles Max Wood (45:28):
We'd get it figured out and then they would change the rules.
David Hemmat (45:31):
I've had that happen too with Argentina.
Charles Max Wood (45:32):
That happened twice with us. We finally wound up using Xoom, but then even that didn't... Xoom not Zoom. That finally stopped working at some point.
I mean, it was messy. Yeah, I mean, for the most part, most of the people that I talked to either spoke good English or were American expatriates that would hire me, if they were outside the US.
David Hemmat (45:59):
How did the rate situation play in there?
One thing I've found is, when companies are looking to hire people outside the US, there's generally a cost component to that, right?
I think there is, of course, places that are more expensive than the US. In my mind, the US tends to be one of the places with higher developer rates.
It's interesting that you say you had clients in other parts of the world that were hiring you. I guess Hong Kong is not cheap either, and probably not the parts of Europe you're talking about.
Charles Max Wood (46:35):
Well, and I was trading on my reputation, as much as I was trading on, "Hey, I'm a US developer."
When they would hire me, they were hiring me, because they knew who I was. It was a little bit different situation.
They weren't looking for a US developer. They were looking for somebody they could count on, and because of the podcast, they knew that they could count on me.
David Hemmat (46:56):
Yeah, do you guys get any push back on rates, Deb, around that subject?
Deb Cinkus (47:01):
Well, no. I mean, we really don't. Again, people aren't hiring us because we're outside the US.
David Hemmat (47:07):
Deb Cinkus (47:07):
They're hiring us because we're us, and because --
David Hemmat (47:11):
They don't know you are outside for the most part, yeah.
Deb Cinkus (47:13):
Well no, I make sure everyone knows that. I think it's important to be honest. I don't want someone to feel tricked.
I mean, there are a couple of times where I have conversations on the phone with leads, and for whatever reason, it doesn't come up.
We get toward the end of the conversation, and if we just haven't touched on the location issue, I will say, "Look. Hey, there's something I need to discuss with you. I want to make sure you're going to be okay with this. That this is fine with you and you don't consider it a work problem."
I explain to them where we are, what we do, that we are legally... and our status and everything is North Carolina-based business, et cetera, et cetera, but physically not located there at the moment, working abroad.
Deb Cinkus (47:54):
Like I said, 99% of the time clients are fine with it. They're not hiring us because they're looking outside the US...
David Hemmat (48:00):
Right, yeah. Yeah, that's-
Deb Cinkus (48:01):
They're hiring us... I don't even want to say in spite of.
The people who hire us, it is not important to them. It is, you're the one they want to hire.
Just like what Charles was saying there. They wanted to hire him.
They didn't really care where he was. Hey, they cared about, "I want to hire you." That's the whole point.
Deb Cinkus (48:19):
I do think it's important that they need to know. They do need to know, so that... yeah, I don't know, if there is ever some sort of issue that I have to deal with, a volcano goes off or whatever. (Laughter)
I'm not like one of those call centers. You know the call centers that you call, and they lie and they say they're sitting in Florida, and you know they're not?
I was having a phone call with somebody. I'm not going to mention the company. I won't out them.
I will tell you that I was having a phone call, and I was talking to a customer service rep and the guy was great. He was really nice. His English had an accent to it, but he was really nice.
Deb Cinkus (48:59):
I kind of got the sense, English wasn't his first language, but he communicated really well, no problem with anything.
We were talking about stuff and I made some comment. I think it was in rainy season and it had started raining, like the sky opened and it just went nuts.
I made some comment about it. He goes, "Oh, where are you?" I told him.
All along he's having to kind of tell me he's in Florida blah, blah, blah. And he goes, "Actually, I'm in Guatemala City."
He's like, they have to tell people, because a lot of people are like, "I want to speak to someone in the US."
He was servicing what I needed to be done perfectly fine.
Deb Cinkus (49:39):
If I have a problem with him, it isn't going to be, because of what city he's calling from. It's going to be because he's not doing his job.
Charles Max Wood (49:45):
Deb Cinkus (49:45):
That's the whole thing. If for a customer it's more important that we physically be at the same location as them.
That we physically are across the same desk, in the same room, then we're going to have a problem working with them no matter what, if that's what they're focused on.
Yeah, it hasn't really gotten in the way. We don't adjust our rates for it, because remember, I've got US people.
David Hemmat (50:09):
Charles Max Wood (50:09):
Deb Cinkus (50:10):
They still make what they used to in North Carolina or wherever, okay?
I mean, they didn't take a big cut in pay, just because they're down here.
David Hemmat (50:18):
Deb Cinkus (50:19):
Even though the Philippines is a very reasonable price, if you get a good person and you want to keep them, you need to pay them well and you need to pay the legal bonuses.
You need to give them raises and certainly, you need to invest in them. Just because, yes, a Philippine employee is less expensive than a US employee, we're not using the bottom of the rate, cheap people.
David Hemmat (50:49):
Yeah. No, I agree.
Deb Cinkus (50:50):
Nor would I want to. Yeah, so there's that to consider as well. Those are our core people. Those are very important people.
The core people are all US.
David Hemmat (50:59):
Yeah, that's interesting. One of the conversations I have to have with people, sometimes they'll reach out to us and they'll say, "Hey, we want to recruit some developers in Latin America. We want to pay well, we want to pay above the local market rate."
I'm like, "Just so you know, all of the good developers in any country in Latin America are making... maybe not Bay Area salaries, but they're working for US companies. They're not making local rates. You're not going to be enticing them with 20% above whatever the local rate is."
Charles Max Wood (51:27):
Deb Cinkus (51:27):
Yeah, exactly. Exactly.
David Hemmat (51:30):
I think we're kind of running over our schedule here.
Deb, do you have any picks that you'd like to share with the audience?
Deb Cinkus (51:39):
I do. I do have a couple of things. In this world of remote working, everybody is going to be working like us now.
For at least a while, people who did or didn't want to go there are being forced to go there. There are a few things that I think I can share.
Deb Cinkus (51:57):
One is, we made the move about a year and a half ago now to Monday.com, as our project management support system.
We had a ticket system, we had a project management system. We said, "You know what? These aren't really fitting our needs. We need stuff that we can adapt to doing conversion rate, optimization work and tracking, A/B tests and analysis."
Then also tracking support requests. We just had a bunch of needs.
We looked at a bunch of stuff. We looked at Trello, we looked at ClickUp, we looked at Asana. I mean, the list goes on and on and on.
I will tell you that Monday.com won. Monday.com won by a landslide.
It wasn't the cheapest, by far. In fact, there were a couple of things that we as an open-source company had access to for free.
We still chose to pay for Monday.com.
I still am very, very grateful to this day that we chose to do that, because the clients love it. They just enjoy it. They like it.
I don't have any problem getting anyone to onboard.
Deb Cinkus (53:00):
I don't have any problem getting anyone to use it and that is priceless. It's so flexible.
Everything that you do for a customer or internally for your company, it can become what they call a board. Just think of a board as a space, like a project.
Every single one of those can be 100% customized. We have boards to do everything from tracking vacation time to tracking pre-sales internally and a bunch of marketing work and stuff like that.
We have boards for clients, for them to submit blog publication. We have boards for clients to submit all kinds of project support tasks, everything else.
We mostly serve B2B. As a B2B business, we need to be able to have often like 5, 10, 15 clients logging into the same thing (project board). That is easy, Monday.com gives you unlimited guests.
There's no additional cost when they say, "Hey, I want you to add this guy from this department on."
I'm like, "Okay, it's no problem."
I mean, really what it boils down to is, if you can get people to use something, that right there is the whole battle, right?
David Hemmat (54:10):
Charles Max Wood (54:10):
Deb Cinkus (54:11):
I mean, luckily Monday,com ended up being this thing that met everything we wanted. And by the way, everyone loves it.
I mean, it was expensive in my eyes, but not unreasonable for a small business.
It really matters that people will use it. My employees like using it, my clients like using it, everybody gets their own private little support email.
They can send a message to that, it goes right into their board automatically and everything.
Every task has its own little chat feature, so to speak, on the side where we can have communication.
Deb Cinkus (54:48):
It's just so easy to manage stuff in there, and so flexible and so adaptable for whatever we need to do.
If you pick something else that's cheaper, but people don't want to use it, and you're constantly having to pull teeth and drag people kicking and screaming to log in...
It's not worth it. I don't care whether you save $200 a month, it isn't worth it.
The fact that everyone loves (Monday.com) and the fact that everyone actively uses it, and the mobile app and everything else that they've got is just... definitely check it out.
Charles Max Wood (55:18):
Deb Cinkus (55:18):
I will tell you that I am paid nothing by Monday.com, by the way. I'm not an affiliate. I'm just a really loyal fan. (See DISCLAIMER above)
If anybody wants to contact me with the links and stuff you'll share on the podcast, and ask a question about Monday.com, I am happy to answer it.
If I can save other people from the hassles of the other tools, I am all over that.
David Hemmat (55:45):
So, if somebody wants to reach out to you, how can they?
Deb Cinkus (55:47):
Well, certainly our website is an easy way to do it, PolishedGeek.com.
David Hemmat (55:52):
Deb Cinkus (55:54):
Then my email is deb (at) polishedgeek.com. And I'm also pretty easy to find on LinkedIn.
David Hemmat (55:59):
Deb Cinkus (55:59):
If you search for Deb Cinkus... and the last name is Cinkus, I'm only one you're going to find. My name is pretty unusual there. That's easy to get a hold of me.
Then the other tool that I wanted to share with you is, this is again for remote work, but it really makes a big difference.
You've got to get as visual as you can, all the time. When you're communicating something, get as visual as you can.
Send a screenshot, do a quick little video clip. Do a screenshot with an annotation, do something to make sure that the wrong assumption isn't being made, the misunderstanding isn't happening.
It just speeds things up and the customers really appreciate it.
Well, instead of you writing back saying, "Go log here, here, here, and here, then go look for this field." Take a minute and do a short little video clip. Record yourself doing it and they will thank you profusely.
The thing that we use for that... a lot of people use Loom. That's very good.
Deb Cinkus (56:54):
What we use is CloudApp. I really like CloudApp a lot.
Super flexible, integrates with a lot of things.
I would suggest that the picture worth 1,000 words is a truism for a reason.
It makes a big difference when you're communicating, especially remotely, get visual.
David Hemmat (57:13):
Very cool. Well, thank you so much. I don't know if there is anything else you'd like to discuss before wrapping up.
Deb Cinkus (57:20):
I don't think so.
Charles Max Wood (57:21):
This is great.
Deb Cinkus (57:21):
No, this has been great. I really appreciated the conversation and I think has been really interesting to hear some of your experiences as well, working in some of the same challenges that we've dealt with.
David Hemmat (57:33):
Yep, I'm always interested in hearing other people who have the same issues as me and that way I don't feel alone.
So great, well, thank you so much, Deb. Thank you so much, Charles.
I guess we'll see you guys in another episode.
Charles Max Wood (57:45):
Yeah. Max out, everybody.
Deb Cinkus (57:46):
Thanks, David. Thanks, Charles. Bye-bye.