Clients can be partners, sure. But can they be members? That’s the question Becky McKinnell, President of iBec Creative, set out to answer two years ago. On the heels of her company’s ten-year anniversary, Becky wanted to toss her firm’s lengthy requirements documents and move from hourly/fixed project agreements to something more flexible and service-oriented. She wanted to close the divide she felt fixed cost created with clients, and free up her team to be more creative and iterative. Inspired by ideas from Owner Summit, she set out to implement a membership model.
Fast forward to today, and iBec Creative has found success with the membership model. Clients receive dedicated access to designers, developers and digital marketers, and nothing is out of scope. As you might guess, membership isn’t easy to sell. But with trust and transparency, it’s a sound, innovative solution. Becky joins us to talk about her move to membership, the impact it’s made on her team and her plans for the future.
Carl Smith: Hey, everyone, and welcome back to The Bureau Briefing. Today, we have a friend of mine from Portland, Maine, who happens to be the president of iBec Creative, which she founded about 12 years ago. It's Becky McKinnell. Welcome to the show, Becky.
Becky McKinnell: Hi, Carl. Thanks for having me, and thanks for calling me a friend, too. I appreciate that.
Carl Smith: Well, you are a friend.
Becky McKinnell: That's what it feels like.
Carl Smith: Well, and you're a great part of the community, and I want you to get a chance to share with everybody a little bit of your backstory, how you launched iBec Creative. Get everybody up to speed, and then I've got something I really want to dive into that I've been curious about. Let's go ahead and get started, though. Talk about starting iBec Creative back in 2006.
Becky McKinnell: Yeah, so I started iBec the day that I graduated college in 2006. I was a naïve, young businesswoman, but I had this blind confidence that, somehow, I could start a web company, so my senior year I wrote a business plan for a graphic and web design firm that would focus on helping doctors create beautiful websites where their patients could learn about them and connect with their doctor, and so I started cold-calling doctor's offices right after graduating. I was hung up on, and rejected, and it was so painful. It was horrible. I just, I felt so passionate about the cause, and I figured like, "Oh, doctors'll have plenty of money to spend on their websites," but I just ... Well, I didn't have the sales experience, and I wasn't ... Doctors didn't want to buy what I had to sell, so I had to reformat my business plan.
Meanwhile, while I was cold-calling all these doctor's offices, a lot of the small businesses around me knew that I could help with their websites and branding, so I started taking on those clients. One client led to another client, and just then I needed to start to hire people, and it became really awkward to say ... My original company was called MediCreative, so it was just an awkward sales process to try to explain to small businesses that I could still help them with their websites. Yeah, so I rebranded as iBec and then just have continued to grow from there. We've got 15 employees today, and we specialize in helping manufacturers and retailers with their eCommerce websites and strategy.
Carl Smith: You're in Portland, Maine, so what's the market like there? Or, I mean, how far out do your clients go now?
Becky McKinnell: I would say most of our clients are in northern New England. A lot of our business is word of mouth, and it's something that I'm really actively working on changing to expand our geographic presence. I think that iBec has been able to grow, especially through a lot of economic downturn, because we have been a really affordable solution for small businesses. I think that has helped us, but a few years ago, we realized that that's not going to get us to where we want to be as a company, so there are plenty of brands in Maine that are awesome that is where our future business is, but, big picture, to work with the companies that are our dream clients, we need to be beyond Maine.
Carl Smith: Right. When I think a lot of companies, especially you're living on word of mouth, and I think all great companies, maybe all companies, regardless of if they're great or not, that, it's a huge part of their business, and one of the things that you had shared at a previous camp, it might have been at Biz Dev Camp, but was this idea that you were doing of moving from clients to members and having a membership model where people are members. I think of iBec. This just blows my mind. I mean, I think about product companies with members. I think about the Bureau as a community and considering people members. When you're selling a service, and I know that you do web design and digital marketing, app development, a lot of eCom, how does that happen? How do you make the transition?
Becky McKinnell: Well, it took a few years to fully transition from project and hourly work to our membership model. Before we started membership, we would write these 60-page-plus documents that we called detailed project requirements. It was like the most painful document to write, and I felt like it just created so much tension with us and the client, because we felt like we had to make sure we had to have every single bullet point in there, because if some speck was lost, then it would be a gray area, and we'd probably have to write it off. Clients didn't understand half of the terminology and language in the detailed project requirements, and it just felt like we weren't playing on the same team, and so it was really bothering me. I felt like it really prevented me from giving my team the authority to give great service and be "yes" people, like I feel like I've grown the business by being a "yes" person and trying to find every opportunity to make things work and make clients really happy.
I felt like when it came down to fixed cost, that it just, it created a divide between us and our clients, so I went to my first Owner Summit. This is my Owner Summit plug, for all of your listeners that haven't been yet. I went there in 2016, and Blair Enns gave this talk that just totally changed the way I was thinking about our client relationships, and he talked about Blairtopia, where you would have 10 clients, and you have a one-page proposal, and all of your clients would be in the same industry, and you'd be doing such an amazing job for them, and really, the world would be beautiful.
It just got me thinking outside the box, and so I came back to my team a couple weeks later after the conference, and I presented iBectopia, where there's a world with no change orders, and we bill at the beginning of the month via credit card, and we can say, "Yes," to everything as long as we reprioritize our to-do list and got the team on board, and started testing out the idea with our clients and converting our existing clients onto the membership model, which is a flat monthly fee that they pay iBec that gives them a dedicated access to a designer, developer, and digital marketer. There is flexible scope, so there's nothing that is out of scope. It's more just what is going to be reprioritized to fit that in scope, if that makes sense.
Carl Smith: Yeah, and they had to love it too, because those 60-page documents weren't fun for them.
Becky McKinnell: Yeah, and it was just like, it was so freeing to get rid of that document. I don't think anyone liked it. It wasn't ever fun to write them, and clients didn't like them. Membership, it isn't easy to sell. It requires a lot of trust for people to, especially when they're trained to have, "Well, where's my proposal with all of the detailed specs of what I'm going to get?" It's like, "Well, we're going to figure that out as we go." It takes a lot of trust to be able to say, "Yes," to that type of relationship at the same time.
Carl Smith: Well, and obviously, you had established that trust. This was 2016, so also right around when you turned 10-
Becky McKinnell: Yeah.
Carl Smith: ... as a company.
Becky McKinnell: That's right. I didn't even think about it like that.
Carl Smith: It's a wonderful time to kind of look back at all the stuff that you'd done that you didn't like, the stuff that you did like, and then you go to this, and I have to tell you, Blair, yeah, I don't think he's going to have a problem with iBectopia. I think that's fine, but he-
Becky McKinnell: Well, it's just internal.
Carl Smith: He signed an email to me yesterday, "Blairtopia forever." I was just like, "Dream on, loser. I'm not one of your fanboys," but it's funny. He does have a way of shifting your mindset. It's amazing to hear that that was an Owner Summit revelation for you, so-
Becky McKinnell: Yeah, and he's speaking at the next one, so it's going to be a whole new evolution. It's going to be great.
Carl Smith: He's coming back. Yeah. With the next Owner Summit being our five-year, we wanted to kind of reach back to the most influential and also, I guess I would say, polarizing figures, because, and God love Blair, for everybody that loves him, there's somebody that just rolls their eyes like, "Really? Really?"
Becky McKinnell: Absolutely, because there, I can see the argument for hourly work, and there's an element in transparency in both hourly work and, in our world, membership, which are aligned, so I can totally see both sides of the coin. [inaudible 00:11:11]-
Carl Smith: Well, and-
Becky McKinnell: [inaudible 00:11:12].
Carl Smith: But your story, and other stories I've heard of people who came out of there, that's the thing. There's not a right or a wrong. It's in the context of who you are and what you're trying to build, and so for iBec, this obviously worked. Now, that was two years ago that you implemented, started to move. What's it like today?
Becky McKinnell: Today, we have probably about 80% of our business is membership, all new clients that come to work with iBec. When we meet with them, we put together a presentation with three levels of membership, and each has kind of like a rough idea of the velocity of what we can accomplish for them and a rough scope, but there isn't a detailed line item list with pricing. It's just a flat monthly fee that our clients pay us. Some clients have memberships that change with seasonality, so they might be a tourism company, and so they have a higher membership in the summer, or with Q4, with eCommerce, visibility, busy times, so memberships often go up in Q3 and Q4, and then maybe we'll slow down in Q1 and Q2. We really just are constantly having a conversation with our clients to make sure that the membership that we're offering for them is meeting their needs and just trying to ... I feel like it really gives us the permission to be customer service first.
Carl Smith: Yeah. No, I totally see that. What has the impact been on your team?
Becky McKinnell: The team loves it. I think that it allows us to be more creative, and one of the things that, in addition to membership, that we really have pushed for on the past couple of years is continuing to think about how we can do things leaner and be more agile, so instead of creating the most beautiful, perfect website and launching it, how can we launch an MVP faster and then make iterations based on data after the website launches? That kind of alignment of a continuous monthly relationship when we're going to be making iterative changes really matches well with membership, where we're consistently tweaking rather than working really hard on perfection and then launching and not having any budget left to make changes.
Carl Smith: Right, and that's got to be great for clients as well, because they understand, if they're comparing you with another opportunity, another shop, and that shop says, "Well, in five and a half months, after you've given us a lot of money, we'll give you the thing." Right?
Becky McKinnell: Yeah, exactly.
Carl Smith:: Whereas you're saying, "Let's start this monthly relationship. Accounting's going to love it at the client. They know exactly what to expect when, and we're going to get the best thing we can up for you quickly, and then we're going to keep making it better." That's such a better business case for your clients as well.
Becky McKinnell: Yeah. I mean, I feel like it. In any personal experience I can think of, with whether it's a construction project or whatever it may be, like I always ... I prefer having flexibility rather than trying to, rather than being stuck with decisions that I made when I was uninformed about what the future would be like, so I think it just makes it like whenever we have a problem or some things pop up unexpectedly in a website build, like it's us and the client that's working together to figure out how to best solve this problem, how to do it leanly, and if something that used to be a big priority previously, but no longer is, we can just swap out the priorities, and everyone is still continuing to be happily working on the site.
Carl Smith: Yeah, so what kind of pushback did you get? Did you have any client who said, "Nah, we don't want to do that"?
Becky McKinnell: Yeah. A lot of times, we get the pushback like, "Well, how am I going to know what you're doing," or like, "How am I going to ... What happens if one developer is really slow and one developer is really fast, so how do I know that I'm not getting the slow developer," or just concerns about the transparency and like ... I reassure our clients that they're going to know every step in the process when a decision has been made, and they're going to know at least every week what we're working on, what's been accomplished, and we're essentially like an employee for your company. Just as often as you would talk to your employee about what's going on, it's the same thing with iBec, and we're going to be exchanging emails back and forth for the status of things, and just like if a client were unhappy with an hourly project or a budgeted work project, we're going to work on and solve it the same way, with membership, and have a collaborative discussion and problem-solve it together.
Carl Smith: Well, and if a client doesn't trust you, it doesn't matter what form of work you're doing.
Becky McKinnell: Yeah, exactly.
Carl Smith: They're just not going to trust you.
Becky McKinnell: Yeah. It's such a key part of a great relationship is having that trust and being able to have difficult conversations when you need to have them, because every client relationship will have at least one difficult conversation, and I think that that really proves that if you can have a tough conversation, then, and things still go well, that you're on the right track for a successful long-term relationship.
Carl Smith: For people who would look at membership and say, "Isn't that just a retainer," what would you say are the differences in the way that you approach membership versus how somebody may approach a retainer?
Becky McKinnell: Well, I would say that with membership are, you can't bank hours or save hours or ... It's not something that like ... It is what it is. It's $5,000 a month, $10,000 a month, and it's not something that you can borrow from other months. It's not completely divorced from hours, and this is something that I would love to be able to get to in the future. We don't provide detailed hourly reporting for clients, but we do keep detailed time on how we work on a client, so we still do time tracking, and we still use our time tracking for forecasting so that we can make sure that each of our teams are at capacity.
I haven't gotten to that perfect point yet where it's not tied to hours, but I feel like for, the path for me to get there is to work on the larger membership levels require less of the detailed time tracking, and I think that I could get to the point where I had a few teams working on a few clients, and those teams were just booked solid with those clients, and they didn't have any small pop-up tasks from other clients or other small memberships that they had to work in. If they're just completely devoted to that client, I think I could get rid of the time tracking and hours.
Carl Smith: You said roughly 80% of members right now?
Becky McKinnell: Mm-hmm (affirmative).
Carl Smith: How has that changed the internal structure of the organization? I know you were on, I know, on a roll call recently, and we were going through looking at it. Has the membership model played a strong part in deciding how you organize-
Becky McKinnell: Yeah.
Carl Smith:: ... the company?
Becky McKinnell: That's a great point. It hasn't necessarily changed our org chart, but in terms of how work gets done, we have two teams, and each team has their own members. It's really nice, because it's almost like we have two companies within a company, but we're still sharing expertise, so it makes it easier for the teams, because they don't have to go talk with three different developers for three different projects that they're working on for three different clients instead.
Within the teams, they're all on the same page for what the clients' goals are, and they've got a smaller number of kind of communication paths when they need something rather than before when we moved to this model, like you might be a designer and working with six different developers who don't know what each other's working on, but since we have the membership model and we have the dedicated teams, our clients really like to know who's working on their website and their marketing. Then the teams really get to know the client, and then within the teams, they're able to kind of self-organize and be able to change any workflows, or like if one client has an emergency, how it's going to affect the other clients, they can just solve those problems together rather than having it be a whole web of conversations within the company.
Carl Smith: Without a chaotic stop.
Becky McKinnell: Yes.
Carl Smith: "Let's see what's going on. How are we going to make this happen," and also that feeling of ownership that that team must have, knowing that that member is part of their group.
Becky McKinnell: Yes.
Carl Smith: Right? Versus, "Somebody handed us a folder, and we've got to do the thing that's-"
Becky McKinnell: Yes-
Carl Smith: " ... in the folder."
Becky McKinnell: ... and the team's involved in the whole sales process. They meet the client even before they're officially a member, and are part of that whole conversation of figuring out how we can best help that client.
Carl Smith: I think the biggest question that comes out of this, for me, having been an owner, having been a founder, running a company for over a decade, how has it impacted you personally?
Becky McKinnell: I really like that it makes us different. Nothing makes me more happy when people say like, "Oh, I haven't heard of this before. I haven't seen this type of relationship before." I think it's so important to be innovative and finding ways that are non-traditional and are client-focused, and I just feel like that this model is going to become more common, like not just in digital and web, but I think for a lot of professional services firms, having a membership model makes a ton of sense, and I'm happy that we're kind of early adopters of this new type of relationship.
Carl Smith: Well, I'm happy that you are, too, and I think you're showing an example of taking a chance that makes sense, and having it be successful, so congratulations, Becky. I'm really happy for you.
Becky McKinnell: Thanks, Carl, and thanks for helping continuously spark new ideas for me with all that you're doing with the Bureau.
Carl Smith: Oh, I appreciate it. Everybody listening, thank you so much. We'll be back again next week. All the best.
Photo via iBec Creative