When it comes to agencies, growth is the name of the game. You either grow or you die trying. And, unfortunately, it seems like a large chunk of digital marketing and creative agencies have done the latter over the past 24 months.
The reason most marketing agencies fail to survive is that they don’t understand how to scale efficiently. They might experience growth, but it’s usually incremental. In other words, 10 percent growth is usually matched by a 7-10 percent increase in expenses. So despite increasing top line revenue, the net profit remains relatively unchanged.
Scalable growth has to be the goal. In other words, you need to look for ways to efficiently build your agency in a way that generates exponential profits. My objective in this article is to show you exactly how top agencies are doing this in today’s marketplace.
Before we get too deep in the weeds of scaling your marketing agency, let’s take a look at some of the factors that may actually be limiting your growth.
Chances are, at least one of these factors is at play in your agency (and it’s preventing you from achieving the sort of growth you want and need). Start by identifying what these factor(s) are. Then move on to the next section to learn how to scale your agency with ease.
Okay, now that we’ve discussed some of the factors that inhibit agency growth, let’s take a look at a few of my favorite strategies for scaling an agency.
If you’re a generalist, good luck scaling your agency. Nobody wants to work with a general agency these days. You need to niche down and build your agency on a very specific and unique message.
Options for niching down include geography (businesses in New York), industry (financial services), company size (500 to 2,000 employees), or even business model (Software as a Service).
Once you have a niche identified, it’s time to develop a Unique Selling Proposition (USP) to communicate exactly what sets you apart from the competition.
You can create a USP using any number of different formulas, but here’s a very simple and effective one:
“We help [NICHE] achieve [BIGGEST DESIRE] without [PAIN POINT].”
For example, “We help lawyers add 20 new clients per month without having to run radio ads or obnoxious TV commercials.”
It’s also helpful if you can create a name for the system or process you use. (This is often referred to as a “unique mechanism.”) You don’t actually have to change anything about the way you do business – you just need to give your process a name. Here are some examples:
You can include your unique mechanism within your USP. Using the example above, it would look like this: “Lawyers use our ‘Digital Catalyst Process’ to add 20 new clients per month without having to run radio ads or obnoxious TV commercials.”
Do you see how much more powerful your message would be if you were to niche down, name your unique mechanism, and create a distinct USP?
You can save yourself a lot of time (and cut down on client creep) by improving your onboarding process. More specifically, you should take this time to gather the right information and set proper expectations.
When a client agrees to work with you, they should be required to fill out very specific forms that give you all of the pertinent information you need to help them grow. This includes things like logos, color hex codes, mission statements, value propositions, all digital assets, company history, logins and passwords for social accounts, etc.
At the same time, you need to go through exactly what is included in your services and what’s not. Make it very clear that anything not included in your services has an additional monthly charge.
There are certain elements of your client packages that are simply not time efficient for you. In other words, they take way more time than they’re worth (or they’re outside of your area of expertise).
Search engine optimization (SEO) is a great example. Unless you have a background in SEO, it probably doesn’t come naturally to you. The good news is that you can still offer these services to your clients – you just have to outsource it.
With white label SEO, you’re able to partner with an experienced SEO company on the backend and offer totally branded and personalized SEO services to your clients on the front end.
Part of scaling an agency is being ready for anything. While it would be nice if your business called in a very predictable way, this isn’t always the case. One month you might add one client and the next you might add 11. You have to be ready for both scenarios.
Because it’s not practical (or smart) to hire more employees than you need at the moment, the best option is to have a list of reliable freelancers on speed dial who can take on contract work to help you temporarily fill gaps.
The first time you do something is always going to be the most time-consuming and expensive. But if you learn how to document and repeat these processes in the future, you can save time and money down the road.
Want an easy way to organize your business and make it to where tasks can be handed off to new hires with minimal training? The secret is to develop Standard Operating Procedures (SOPs). These are documents that explain how a task is handled in a series of simple steps. Whenever an employee is promoted or leaves, all you have to do is hand SOPs to the replacement and they can take over from there.
I just gave you a lot of information and ideas. And with that being said, please don’t try to implement all of them this week (or even this month). Instead, pick one tip and implement it right away. Once you feel like you’ve perfected that one, move on to another. This patient approach will eventually yield results. It may take time, but you’ll look up in six to 12 months and find your agency in a much healthier place.
Nate Nead is the CEO & Managing Member of Nead, LLC, a consulting company that provides strategic advisory services across multiple disciplines including finance, marketing and software development. For over a decade Nate had provided strategic guidance on M&A, capital procurement, technology and marketing solutions for some of the most well-known online brands. He and his team advise Fortune 500 and SMB clients alike. The team is based in Seattle, Washington; El Paso, Texas and West Palm Beach, Florida.