Agencies

The 5 Sales Every Profitable Agency Masters

Based on interviews and performance data from thousands of agencies over the last 10 years, I’ve discovered how, what and when the most profitable agencies sell.

Peter Caputa IV on February 28, 2018 • 2 minute read

“When I grow up, I want to run a low-growth, low-margin business with lots of competition”… said no one ever.

But, if you’re running a small marketing agency, chances are that’s exactly what you’re doing: running a low-growth, low-margin business with too much competition.

It’s exactly what I did when I ran a small marketing services business for 6 years in the early 2000s. When I joined HubSpot in 2007, I realized I wasn’t the only one: many other agencies I met found it challenging to achieve consistent cash flow, let alone consistent profit margins or growth.

I started the HubSpot partner program in 2009 to help them fix that. Over the years, in order to identify the habits of top performers, we collected performance data from thousands of agencies. During my 9 years there, I also stayed close with a bunch of agency owners as they went from their dining room tables to fast-growing, highly profitable, multi-million dollar, Inc-5000 ranked businesses.

Agencies like IMPACT Branding, Square 2 Marketing, Smart Bug Media, PR 20/20, Revenue River, Prism Global, Brand Builder Solutions and many more.

At Databox, I’ve been continuing my work helping agencies. Our team is obsessed with the quest too.  1500+ agencies use Databox to track their own metrics and client performance. And since I don’t have a massive team to manage here YET, I’ve also spent a lot of time on the front-line helping agencies directly.

Once again, I have a  birds-eye view of the habits of top performers and I’ve heard first-hand the same common challenge over and over again. This time around, the most common challenge is low, inconsistent margins.

So, over the last year, I discovered a new formula for agencies to follow. Here are the 5 sales every profitable marketing agency masters…

  1. Initial Sell – Low-risk, low-cost sale that delivers value quickly.
  2. Retainer Sell – A recurring revenue agreement for at least a year.
  3. Upsell – Selling more of the same work to a client when it’s working.
  4. Cross Sell – Selling to more functions inside a company
  5. Resell – Reselling complimentary technology and services in partnership with someone else.

Over the last year, we’ve already done a lot to help agencies figure out these 5 sells.

Today, I’ll be debuting a presentation on the topic in front of a thousand or so agency professionals at the Traffic and Conversion Summit in San Diego, CA. The presentation provides a first-draft roadmap for agencies who want to maximize their margins.

 

If you want our direct help figuring out how to establish processes and systems for these 5 sales process in your agency, start a free agency account with Databox and stay tuned. We’ll be doing much more to help agencies master all five sells.

About the author
Peter Caputa IV is CEO of Databox. You can follow him on Twitter or connect on Linkedin.
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