How much new $ is the best manager in the world bringing in?
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The answer is - much less than you’d hope. And it is not even their fault… Funnel math is the issue. Let’s calculate together.
But first - rewind back to the start. You are a successful Content Creator. You have amassed a loyal following. Content Creation is your fulltime profession. Let’s assume your annual revenue from paid collaborations is $100k.
At this stage your inbox starts to change. Affiliate programs, gifting and matchmaking platforms are on the down. While agencies from demand-side and supply-side are starting to fill your inbox.
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At some point you sign up with your first manager. They told you about all the brands they have great relationships with. All the dollars they acquired for the big names on their roster.
You decide to give it a try. But what is a realistic expectation?
How do managers find deals for you that wouldn’t have found you? There are two main avenues.
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Personal network. They have friends on the demand-side. Either with influencer marketing agencies or with brands directly. These friends had a good experience with them before. That’s why they are willing to book again with this manager.
Second source - cold outreach. Either based on your input or based on research by the manager demand-side contacts are cold called. Hoping to find the right timing for them to consider a new manager.
Let’s try to quantify it a bit more. You are paying $20K in management fees on your $100K annual revenue. In order to break even, you need to now earn $125K with the manager. Note: that you pay 20% on all revenues now - so the bar is $25K incremental not $20K.
For the sake of simplicity let’s first assume that all $25K incremental revenue would come from the personal network of the manager. Let’s assume your average deal size is $2.5K (conservative for size!). So, we are looking at 10 net new deals per year.
How many personal connections does the manager need to have for this to be realistic?
Generally you can say that in B2B at this ticket size a 1% conversion rate (survival from start to finish) would be a baseline result. But this is warm network contacts. Let’s assume that chances are 10x higher - hence conversion rate is 10%.
In order to win 10 deals per year the manager needs to have 100 high quality contacts that are willing to book again. But the manager has another 10 creator on their roster that have the same demands. Hence the cohort of warm contacts needs to be 1000 brand contacts that trust the manager and have budgets this size every month.
In the US there are ca. 1500 professional management companies. And roughly 100 of them are in the midmarket (10-30 managers). And then there are the big three (CAA, WMA, UTA) with hundreds of managers.
Every month 50K - 150K brands are spending on 2 - 4 Million paid collaborations in the US. And there are 1.55 Million fulltime content creators. Of which ca. 200K fall in the range of 100K followers to 1M - depending on engagement and content type could yield $100k per year. Hence the competition is very stiff. Hence your manager needs to thread a very thin needle.
And there are even more limiting factors. What the brand is looking for in that moment needs to be compatible with your content. On average brands are taking 50 creators on a longlist and 5 creators per slot onto their shortlist. On average creators reserve up to two slots per month for activations. Most successful creators can fill half of their slots with inbound. Let’s assume that slots and chances are evenly distributed.
First you need a manager with 1000 warm contacts and a maximum roster of 10.
This gives you a 10% chance to be put forward by your manager.
And a 10% chance to move from longlist to shortlist.
And a 20% chance to be picked.
And then a 50% chance that one of your two monthly slots is still vacant.
That is a 0.1% chance overall.
In other words, you can’t expect your manager to fill half your slots with warm outbound. The forecast can’t rely on this activity.
Even if you are more aggressive the game changes ever so slightly.
Your manager is incredible and has a 30% conversion rate.
And your manager only works for you - hence 100% chane to get to longlist.
That would give you a 1% chance to be picked. And the manager would still need a network of 333 warm contacts to place you.
Coming back to the start. If you have a manager that creates net new deals for you regularly, you are in luck. Because it is really, really hard.
Now, managers have more value than just bringing new deals. Everybody is chasing for managers that bring new deals. But arguably you could rank importance of a manager’s job differently.
- Better Negotiation (More Money and Less Risk)
- Freeing Your Time for Content and Brand Building
- Business Buddy (Unquantifiable)
- Outbound Deals