Get More From Your E-Commerce Agency - And Know When to Walk Away - Commerce Today Episode 128
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Joshua: [00:00:00] Hi everybody. Welcome to this week's episode of Commerce Today and this week we're actually talking a little bit about vendor selection hiring, and. Commerce agency, all that fun stuff. And I actually want to talk to you about the part that I feel like a lot of people overlook that is super important.

And that is after you've selected an agency and after you've hired that agency. So a lot of guides out there, a lot of people with a lot of experience in vendor selection, a lot of processes that you can follow for that. But I find that. Once the contract is signed, people are like, whew, all right, we're done.

We've got this. The hard part is finished. And lots of times that's actually just the beginning. And how you act and what you do to set up that relationship and that partnership over the coming months is super important. I'm actually gonna provide you with three different playbooks.

Through this conversation, and then this is gonna become part of the e-commerce Growth Playbook book that I'm publishing later this summer. So those three playbooks are govern, own and [00:01:00] exit, and we will dive right into that. First of all, why does this matter? And I was actually talking to somebody yesterday met for coffee with somebody for one of my e-commerce brainstorming sessions, and he was talking about just this vendor relationship and this agency partnership that.

It wasn't working out and it wasn't going well, and it was stalling a major project and just having a lot of, not only like direct negative impact on the project, but just a lot of extra added stress. I've worked with so many different e-commerce brands that started out.

A great relationship with the agency, especially the agency that built their site, that over the years things happened, they drifted apart and they weren't getting the results they wanted. One of those actually dove into some of their complaints and some of the metrics behind their previous agency before they worked with me and with creativity.

And basically over three years while the budget and the spend remained the same, the actual dev velocity of new features being implemented was cut in half. So [00:02:00] there's. Spending the same amount of money, they were getting fewer tasks done, their backlog was ballooning. And that just not only was not good for the e-commerce business, it created a lot of stress for the e-commerce director.

And it honestly made them look bad because the executive started wondering where's the momentum? Where's all the new features that we had? In the first year of launching our site, we had all these new features and now it just keeps slowing down. So I feel like this is caused by vendor drift.

And what is vendor drift? First of all, it's the fog of war, if you will, or the fog around the scope. So that scope creep that is just getting bogged down over the years and hundreds of Jira tickets, lots of tasks, lots of conversations. You get all this that just, this gunk almost builds up around the project.

You end up with staff turnover over the years, both at the agency and at the e-commerce company. And then you. Over time can become very complacent about KPIs. Did a couple of [00:03:00] great episodes that I've gotten some wonderful feedback on about KPIs not too long ago. Go back and check those out.

But I talked about how there's so many e-commerce teams that after years of looking at their KPIs, of looking at their scorecard they might get complacent if there's a bunch of red on it, if things aren't trended in the right direction. So how do you solve this? Really simple three things.

Quarterly business reviews. Having a scorecard, like I mentioned in a previous episode, and owning your data and owning your tech stack. First playbook I promised you is the govern playbook, and this is all about QS and KPIs. Quarterly business reviews, and I find that quarterly business reviews, you really want to have four main topics you're discussing.

You set a four item agenda, you cover it once a quarter, you have key staff from the e-commerce brand and from the agency team present. And you talk about first finance. So how have you been doing on budget? How are you doing on burn rate? Are you hitting the budget on and the [00:04:00] estimates on these tasks?

Are you exceeding them? Are you coming in under budget? Does the budget itself and the spin need to be adjusted up or down? Take a look as well at license creep. I have seen many cases where people say they buy a. E-Commerce Cloud, but they already had a subscription to something like Fastly and they may forget to cancel that existing subscription.

So you end up paying for things twice and adding extensions that maybe you don't need anymore. Adding third party services that you once needed, you don't anymore. So just reviewing those every quarter. Make sure there's not any license creep going on and taking a look at change orders and change requests and that.

And none of this is to point blame and to say, oh, this is always the agency's fault, or this is always the. R's fault, but I have found change orders and change requests can be such an interesting thing to track and discuss. Because yes, it could be that an agency change requests you on everything, but it could also be that there's an e-commerce brand that is changing their mind a lot [00:05:00] that is not actually getting the right stakeholders in the room when project specifications are being locked down.

So just having a frank conversation looking at the number of change requests can help point out possible issues like that. That, so that was finance. The next topic on the agenda is delivery. So if you're using story points, simplest thing to look at is the number of story points shipped. You could also look at Jira tickets or Jira issues closed.

That can be tricky just depending on how big those tickets and issues are. If you had one that was for an entire epic that covered a, month long feature that was delivered that's very different than a short little ticket that gets closed because no change was needed.

Using story points, those can be the most effective. If you don't know what story points are, reach out to me. Maybe I'll do a whole episode on Agile estimation and story points if you are interested. The other things to look at when discussing the delivery part of the QBR is cycle time.

So how long does it take from one of your stakeholders having an idea to features [00:06:00] deployed and documented on the production site? How long does that take, and is that time getting longer? Shorter? How is that doing? And then how many bugs are slipping through? What's the defect rate? How many things are going to production, and then requiring a fix after the fact.

Then you get to talk about the fun stuff. That was the looking back part of the QBR. The next two pieces are the four looking pieces. The next step is the roadmap. What features do you need to add over the next quarter? What sort of tech debt do you have that you wanna start addressing? And what sort of risks do you have to your site and its operation?

That you might need to address. So go through all that, that can help you decide what the key priorities are for the next quarter, so that when you're in that next QBR, you can look back and say, oh, wow, yeah we addressed all this, or No, there's a few key things that we missed. We wanna do better next quarter.

Finally the most fun is growth. So that's the fourth item on the QBR agenda. What's your conversion rates look like? What are your a OV? How long is it taking people to make a second purchase or a repeat purchase? Us. If you're running [00:07:00] EOS and have a scorecard like I talked about in previous episodes, then you can look at that for the past quarter as well and just talk through are you growing at the trajectory you want?

If so, what are you gonna do to continue that growth? And if not, what are you gonna do to get on that growth trajectory? Next up then still in the governed playbook build out those KPIs. If you don't have that score guard, if you don't have the KPIs, then your very first. QBR can be a great time to define those.

And then every quarter you should look at these numbers. Both the e-commerce agency and the e-commerce brand should just look at the numbers, talk about them and see what they indicate. So I, and for the qbr, some KPIs you can look at are velocity story points per week or per month. Can be a great thing to track.

If you're using story points, I'm not gonna tell you, you should be shipping X story points per month. Because that is fraught with all sorts of issues. You could have a different definition of story points than I have. You could have a different size [00:08:00] budget that I'm thinking of. So do not think that there's a one size fits all story point target.

So what I actually would recommend is you, yourself this, in this meeting, set that target, have a frank conversation, set that target, and then instead of having a specific number of, I'm gonna tell you. You 20 story points per month is green on your scorecard. Look at percent of target. So if you're within 90% of your target then that's green.

If you only get to 70 to 89% of the story points that you wanted to in that quarter, that's yellow. And if it was under 70 points, that's red. And again, this is not to assign blame to say, oh, the agency messed up. The brand messed up. This is to help you get to the bottom of it and improve for the next quarter.

The next item you could look at is bugs per. Release. I would recommend your green, yellow, red marks. You basically want to have an, ideally you want have zero bugs, but that's not really realistic. So I would call two or less. When we're talking about true [00:09:00] bugs and not just, I want this moved slightly from here to there, or someone decided they want to see a different color button.

Two or less would be green. Three to five would be yellow. More than five would be red. Budget variance. This is one where depending on how long you have. Worked with the agency and how good you are at defining your specifications upfront. It can be challenging to set exact numbers that you need to hit here.

I would say obviously everybody would be happy if you're coming in within 5% budget. That's an easy way to say this one's green. For the other numbers, you should really evaluate where you are in your partnership with your vendor. SLA response times, depending on the SLA you have with your partner.

You could look at how long it's taking to get issues, either first response or resolution or both. And then strategic value, this is a little bit of a touchy feely one but I would have all of the executives at your company vote on does our e-commerce site and the partnership [00:10:00] we have with our e-commerce agency, is that adding value to the company?

Is that neutral or is that subtracting value from the company? And you want, obviously. A majority, if not all of the execs, to vote that it adds value. And then you can actually, if you're running EOS, you use the scorecard you can use any off-track values, red values to feed into your EOSL 10, either at your agency or at your e-commerce brand or something that I've experimented with a little bit.

You could do a joint L 10 between your agency and your e-commerce brand if you're both running ES. Now, next up in the playbook. Owning keep the keys to your digital kingdom. So this is something it's been a while since I've had an episode where I ranted in my Texan style of freedom, liberty, and owning things.

But I'm gonna get back up on that soap box. Buy your own licenses, whether that's for an e-commerce platform, whether that's for an extension, a third party [00:11:00] service that should be owned by the e-commerce brand. There are a lot of agencies out there that will say, Hey. We can get a better price, we can just bill it through to you.

It'll be easier if we buy it. Do not do that. Even if you are super busy and you're thinking, I don't want to have to get out my credit card, go through corporate purchasing process and go buy this $200 extension, I should just have my agency do it. You will at some point regret that decision. I have seen so many times where there are companies that are spending thousands of dollars to repurchase extensions that they already bought because they have since moved on from that agency to.

Another agency and they can't find the license key. They can't open support tickets, they can't download new versions of the extension 'cause they didn't own it, the agency bought it. Or worst case, sometimes, depending on who you're working with, the agency may not even be buying it. They may be swiping that extension from another client project and now you don't even have a proper license to legally use that extension.

So [00:12:00] definitely, I would hope that there are no agencies out there doing that, but I know that there still are unfortunately. So you absolutely. As the e-commerce brand, buy your own licenses and own them. Also hosting, do not host with your e-commerce agency. Absolutely you need to own the hosting.

You can have them manage the hosting, but you need to have the keys to the kingdom. If you are on a on-premise piece of software that is hosted on a server, someone in your company needs to have full admin or root access to that server. If the e-commerce. Agency won't give you that. You're not in a partnership, you're being held hostage.

So do not do that. I know with certain things such as Adobe Commerce, it's platform as a service set up, there's not really root access given to anyone other than Adobe in that case. But still, the account needs to be in your e-commerce brand's name. And luckily, when you're buying something like Adobe Commerce, Adobe will typically make sure that you, the [00:13:00] e-commerce brand own it and have access to it.

But one. Thing I've seen happen is e-commerce brands that completely did not understand how to access Adobe commerce, how to get into their entitlements and license keys and add new users and all that stuff. Absolutely. Make sure there are multiple people that work at the e-commerce brand that have access to that and document how it works and if one of those people leaves, that needs to be part of their offboarding of transferring that responsibility to someone that is still working at the e-commerce brand.

'cause again, hopefully your relationship with your e-commerce agency is gonna go great. You're gonna work with them for many years. You'll never need to switch. But if something happens and you need to switch and you don't have access to your own hosting or to your own platform as a service, that's gonna be a really painful process.

Also, I know every agency has a different way of doing things with GI repositories, JIRA boards, et cetera. But absolutely, if you can, and if you're a more technical company where [00:14:00] you can. Own and control the get repository. The code repository where all the code is committed. Having that history can really help future agencies that you work with.

I know some agencies aren't set up that way. They're not gonna be able to do that. At a minimum in that case, make sure you at least have a copy of the code other than just what is on production. But if at all possible, if you have the tech staff within the e-commerce brand to support it, run your own Git repository.

Keep a copy of all that good GI history. Same thing. I don't see a lot of e-commerce brands out there with IT teams that can support a CI or CD setup for e-comm. But if you have a team that can do that and you can own that infrastructure again, it can be like the hosting setup where the agency is supporting it, agency is helping you with it.

You give them admin access to it. But still, if that could be owned by the e-commerce brand and the main admin account, sit with the e-commerce brand, that could really come in handy if you do need to make a change. Finally make sure there's [00:15:00] something in your contracts about ownership of who owns the code.

For instance, at creativity we have a clause that basically says that anything that we write for you becomes your property. Unless we are using open source components. Let's say you're launching a site on something like Magento Open Source. In that case, we can't give you a full ownership license of the Magento code because it's open source.

And so in that case, our contract also. Falls back to basically giving you the right to use that code, to have that code and to that basically we won't get in the way of any rights. The open source license grants to you, the e-commerce merchant. So again, the agency can be the one driving the car, but make sure you also have the keys and that if you need to make a change, you can make a change.

Very final part, and this is the part that no one wants to think about when they first start working with. A new agency, but the exit playbook, let's say it is time [00:16:00] to wrap things up and find a new agency. So five things that I would look at as early warning lights. First of all, if two quarters in a row your roadmap is completely slipping because you aren't able to get new features launched again, that could be on you, the e-commerce brand, if you're constantly changing your mind and changing the requirements.

But it also could indicate either. Or a problem with your agency or a problem with the partnership between the two. If you are having red scorecard metrics for three Qs in a row, it's time to move on. If you are repeatedly getting surprise invoices where you get no heads up, again, time to move on.

If security patches aren't being applied to your site within seven days, that's not a good sign. Either they're not prioritizing security or something is up with the way your site is built and. It's hard to patch. And then if, again, a touchy feely item. But if you just can't get [00:17:00] things done, if you are stressed out every time you think about your e-commerce agency, if the thought of a deployment or a new feature keeps you up at night in a bad way, not just 'cause you're excited about it it might be time to stop and just reevaluate.

Sometimes due to no fault of the e-commerce brand or the agency, sometimes the two just drift apart and you will find that you are less stressed and you're getting more done. And the e-commerce business is growing faster if you find a new agency. So whenever it's time to go, I'm hoping that you are working with an agency that you can trust and that you've built a relationship built on trust over the years and that you have full ownership of everything.

If that is the case, I would actually give them a heads up and say, Hey, we're transitioning to a new agency. This is actually gonna be. 90 day process, we will. And then of course, check your contract, make sure you're obeying anything in the contract about notice periods and payments. But I would just offer and say, Hey, we will continue paying you for the next 90 [00:18:00] days because we need your help to make this a smooth transition.

So set up a plan for knowledge transfer. And this is one thing I have been on both sides of projects, moving between agencies and it seems like no one at the brand cares about or values. Internal or code documentation until they're trying to move to a new agency. And then suddenly they'll say, can you write documentation for every piece of code that you wrote on this project for the past five years?

No. Or yes, but it's gonna be really expensive. So if you are the kind of company that's gonna ask for that, put that into the very start of the conversations at the start of the relationship, have that documentation and knowledge base built up over time. Again, most brands don't spend that kind of money to do that.

And most agencies are used to that and are able to take on a project without that documentation. But that's a, an item to think about at the start of the project and not just wait till the very end, obviously. Then go through and audit the [00:19:00] access to repositories environments. Third party software.

Make sure you know who has access to what, and you can do a smooth transition from the old agency to the new agency. And then find a final or set a final cutover date. Please do not have two agencies deploying changes and new features to your side at the same time. That is even with two of the best agencies that mean and care and are gonna do their best work.

It's just gonna cause confusion and cause problems. So set that date and say, up to this date, it's gonna be the old agency. After that date, it will be the new agency. And again, hopefully you never have to use that, but just like they say about contracts, you know it's best to get on the same page and have that plan at the very beginning just in case things do go sideways in case you do decide you need.

To make a change. You don't want to have to scramble and try to figure that out on the fly. So hope this helps. There's gonna be a whole chapter in section on vendor management, agency selection, et cetera, in the e-commerce Growth Playbook. That is the book that will be out [00:20:00] later this summer. If you would like to read an advance copy and gimme some feedback, then please find me on LinkedIn.

My name is Joshua Warren. You'll find the creativity gold background behind my head. If you are trying to figure out which Joshua Warren, drop me a dm, let me know you're interested in. Checking out an early copy of the book and I'll send it right over. Thanks and stay tuned for next week's episode of Commerce Today.

I'll see y'all then.