As anyone who works for or with ad and marketing agencies can tell you, the game has changed. Budgets have been reprioritized away from traditional channels like TV and print, the AOR model is breaking and clients expect more quantifiable ROI than ever before. And no two agencies seem to be addressing these new challenges in the same way.
I should know. As the Sr. Manager, Agency Sales at Sprout Social, I talk to agencies literally all day, every day. On average, I have 4-5 agency customer-facing conversations per day – more than 1,000 in 12 months. I’m even talking to an agency when I’m off the clock – my wife happens to own a strategic marketing agency.
What have I learned? A lot about how the new paradigm of agency life is shaping decisions on both sides of the agency-client relationship, and one other very important fact: There is no one right way to approach doing business in 2018.
Some shops work on retainers, some are project based, some charge in a different method altogether. Some focus on one service for one client, some focus on many services for many clients.
The list of differences goes on and on. But, through all of these conversations, the healthiest agencies (revenue, profit, culture, client satisfaction, growth, etc.) share several key traits:
- They Price Their Services Properly – So often, agencies charge too little and give away too much. As a result, profitability suffers and growth stagnates. Best in class agencies have solved this problem in the simplest way: They charge relative to the value & time of their work. Pay close attention to the profitability of every project and adjust your prices to ensure profitability. A big part of a profitable pricing structure is to charge your clients for the tools you use to deliver results. Technology will be a key part of your clients’ success even though the client may not see or touch it. Regardless, it is your job to help them understand the importance technology has on the end result and why they need to pay for it.
- They Care About Delivering Results & Actually Measure Them – It’s a lot easier to ask your clients for more money when you are consistently delivering measurable results. Every agency I speak with cares about delivering results, so why do so many agencies struggle to prove value? The reason is few agencies have a plan to measure those results on a consistent basis. You need to make it very easy to find actionable insights around the work you’re doing so you can quickly adjust your strategy.
- They Get Their Clients to Care, Too – Now that you have your data in order, you need to invest time educating your clients on the data. Too often, clients do not understand the value of what you’re doing and it’s your responsibility to help them. Take time to educate new clients on key metrics and provide context whenever sharing data with the client directly.
- They Have a Sales Playbook – One of the biggest challenges facing agencies is the lack of formal sales training and a formal sales process. Often times, the process varies from pitch-to-pitch and this makes it very difficult to win pitches on a consistent basis and hit growth objectives. The key to winning more deals is creating a scientific, repeatable sales process for each of your service offerings. Create your stages (“qualification,” “pitch,” “proposal,” for example) and outline what questions/information you will gather at each stage. Make sure to include questions that will allow you to easily qualify a prospect at every stage (nothing kills efficiency faster than wasting time on a “bad fit” client). Finally, practice these conversations internally & train different members of your team to widen your sales team. In addition to creating a formal sales process, another key to winning more pitches is to outline KPIs for your sales & marketing efforts so you can track what’s working and what’s not. Develop a KPI tracking so you know where you need to invest time to hit your growth goals.
- They Are Focused – Early on, your agency is likely to accept any client you can find. But, over time, you need to carve out an area of focus, whether that’s specific industries or specific services. Trying to be everything to everyone is a recipe for inefficiency, stagnation and frustration.
- They Work on Their Own Brand – Here’s a question I like to ask every agency I work with: Do you treat your agency like a client? More often than not, the answer is “no.” But the best agencies know they must invest in developing their own brand in addition to their clients’. As part of your sales process & KPI development, spend time thinking about your marketing plan and make sure your agency shines in the areas you are offering services (i.e. stay active on social media if you offer social media services).
- They Build Culture – Agency life is difficult and it can be even more difficult to keep staff motivated and energized every day. One of the easiest ways to do that is to build a great culture through team outings, work/life balance (summer hours, work from home, etc) and a “best idea wins” mindset.
- They Invest in Professional Development for Their Staff – Your agency can only grow as much as the people who work for it but many agencies don’t have formal professional development plans for their staff. You must invest in your people each and every day. Allow them to tackle special-interest projects, ask them to lead client meetings or send them to an offsite training for a day. Regardless, make it a priority to grow them and they will respond by growing your business.