In order to grow your agency, the first step of course is creating (and increasing) revenue, which is easier written than done. It means you have to find clients.
Revenue can grow from net new client relationships and organic growth from existing clients, the latter of which is often overlooked in importance and formalized structures. Revenue also takes the form of project work versus recurring revenue. There is a place and time for both of these types of revenue, which we will outline in more detail below.
When this is done correctly and intentionally, it can set you up for long-term success. When revenue growth happens in an unstructured or unintentional way, it often leads to more variability in cash flow, deliverables, and resourcing needs…all of which lead to sleepless nights for agency leaders. Be intentional about what you offer as your services in order to maintain repeatability, and in turn profit.
We learned a lot of lessons scaling our own agency from nothing to one of the fastest growing companies in North America, achieving multiple years of 100% YoY growth. Here is a summary separated by that first phase of getting started and then the second phase of scaling.
- Think like a freelancer
Starting your agency doesn’t mean you have to hire a bunch of people and rent office space anymore, so stay cost lean. Finding communities like Communo or Upwork where you can take larger agency sub-contract jobs is often a necessity in order to generate cash flow. It also helps build your network and connections in the industry. Try to be client-facing in those relationships where possible, so that you can build rapport with the people paying the bills.
- Leverage friendlies
You’ll likely start out taking any job within your friends and family network. Our agency had an uncle’s roofing business, an aunt’s doula service, a friend’s landscaping business all as initial clients. Use those ‘friendly’ clients to learn and build case studies, finding your niche for how/where you produce results. This will allow you to move upstream and find larger businesses with similar problems that you know you can help.
- Find your own budget
Telling a prospective client how they can spend more money is easy for you and hard for them. Telling them how they can get better results for the same or less is harder for you but easy for them. Do the work to identify what parts of their ecosystem may not be working, whether that’s using software to help audit their current performance or a complimentary planning/strategy session with them or tying your payment to their performance. I talked to someone the other day that had a found a way to have businesses lower their payment processing costs on the condition that they used that money for digital marketing. Show them how to save costs and turn it into revenue.
- Embrace your experience
There are 1,000s of agencies out there, and with remote working, the choices businesses have for their partners is only growing. The only thing that makes your agency different is how YOU think about strategy and what experiences you have to draw upon. You are going to have to get comfortable sharing and talking about your experience in a confident but not braggy way.
Take what you have done in the past and focus on amplifying that. For example, if you’ve worked on the brand side, target brands in the same industry, or for agency veterans, find work you were proud of in your client portfolio and focus on that. You’d be amazed at how niche some very successful agencies are, like focusing on HVAC clients or dental practices, etc.
So now you have a few relationships, perhaps a few introductory one-off projects. How do you grow from here?
- Every reporting meeting is a pitch
Whenever you have a chance to talk about results, come to the table with 2-3 ideas on ways to improve performance outside of the current scope of your work. Look to indicators of performance to see where the opportunities to improve are. There are software tools like Morphio that can help shine a light, objectively, on where the improvement areas are that your work can help.
Demonstrate an ROI to those services, including your fees, so clients can see the potential return. For example, if click through rates are decreasing but conversion rate is still good, suggest new ad creative, and demonstrate what the potential increase in clicks translates to in terms of conversions and ultimately sales. Then divide that by your fees for the work to get an ROI on your work. Think of clients investing in you just like investing in media, dollar in equals $X out.
- Follow your relationships
When you see or hear of someone at a client or agency leaving to go somewhere else, check in with them when they switch roles. Be casual and be friendly, give them time to adjust to the new role, but continue to maintain those relationships. Maintaining that network is a cost effective way to find new work over time.
- Plan like you want your clients to
We always had prospects coming to us right before key retail moments for their business, such as holiday shopping, back to school, or for seasonal businesses, right before they opened up. It would drive us crazy when someone would ask for an entire strategy and campaign to be set up in a few weeks. The same can be said for our own agency marketing efforts. The more you can provide thought leadership at the ideal time to prospects, the more they will realize that you are proactive and also thinking about long term partnership with them. Start building out your own marketing efforts for holiday shopping in the summer months, creating thought leadership, having conversations with marketing leaders about what they want their fall results to look like, offer up strategic planning sessions a few months before campaigns go into market, and then continue to narrow that funnel towards SOW sign off at the end of summer.
- Not all clients are equal
As we brought on more clients, we realized that there were some that had great growth plans and the funds to achieve them. Others frankly did not, which was perfectly fine, they were still profitable clients and great people, it just meant that when we did take precious time to invest in strategy and ideation, we knew which accounts to focus on.
To identify high opportunity clients, we assessed all our clients quarterly to understand their current performance and then their potential for growth, both in their own businesses and results, and also in our services. We knew if we were not performing, no matter how much they wanted to grow, it would be tough to convince them to spend more money. We will talk more about goals-based account management next week to help explain how we did that performance assessment. For the growth opportunities, we looked at how many additional services of ours we could provide that client and their overall business goals and results (are they trying to grow 100% YoY or 1% YoY). We also looked at the strength of our relationships within the client team to see what clients we could connect with other departments or people to find more opportunities versus just having one point of contact that we already had a good relationship with.
We literally put this into a 3 x 3 grid and used this to inform account planning, executive outreach, and strategists time.
How Morphio Can Help
As mentioned above, having access to data to make informed recommendations timely is vital to the success of winning, growing and retaining clients.
For new business, Morphio has a suite of auditing tools that will give you insights on how to improve performance in a meaningful way quickly.
Once you’ve won a client, the suggestions and anomaly insights within Morphio will give you a snapshot of ways to improve performance that can also represent separate one-time or recurring scopes of work.