Accelerate your thought leadership by contributing to our blog. Join our community of experts now!
Enjoy reading this blog post written by our experts or partners.
If you want to see what Databox can do for you, click here.
While it might seem a bit ironic, for many marketing agencies, the biggest problem is marketing themselves and getting new clients.
It’s similar to the “shoemaker’s kids always go barefoot” concept.
Even if you have a solid reputation, are doing good work with clients, and have a set channel for acquisition, things can change in a heartbeat. Especially if you put all your eggs in one basket (channel).
So, how can you make sure your pipeline is always filled with leads? Which channels should you focus on for acquisition? How do other agencies do it?
That’s what we set out to find out with our partners – Harness & Hone. Together, we surveyed 87 marketing agencies to better understand how they get clients and which channels and strategies they’re leveraging.
We gained a lot of valuable insights into what acquisition strategies are working right now, how agencies are differentiating themselves, which challenges and opportunities they see with specialization, and a lot more.
Let’s dive in.
For this report, we surveyed 87 companies during October and November 2023, alongside our partners at Harness & Hone.
Here’s who we talked to:
Out of these, 36.36% of our respondents are agencies with 2 to 10 employees, 31.17% are companies with 11 to 25 employees, 15.58% have 26 to 50 and 12.99% have more than 50 employees.
Only 3.90% of respondents have 1 employee.
When it comes to the size of the current monthly revenue, approx. 40% of the respondents reported revenue up to $50,000, about 38% reported monthly revenue between $50,000 and $250,000 and 12% reported revenue above $250,000. 11.96% of the respondents didn’t report their amount of revenue.
We also inquired about annual profit margins.
Now, if you’re a marketing agency, freelance marketer, solopreneur who offers marketing services, or an independent marketing consultant who wants to see how you stack up against the competition – you can join the Sales Benchmarks for Marketing Agencies Benchmark Group that our partners, Harness & Hone built.
And if you don’t fall into one of these categories, you can still join Benchmark Groups for free and find a group most relevant to your specific business model and industry, and check out performance benchmarks instantly.
How effective have marketing agencies been in selling themselves in 2023? What performance data are they seeing?
Let’s check out what our Sales Benchmarks for Marketing Agencies group has to say.
First, we wanted to know how much time agencies need to actually close a deal once they have a lead in their pipeline.
And by investigating results achieved by agencies with 1 to 50 employees, we’ve learned that the average time to close a Deal in November was about 49d 45m (median value, 163 contributors).
For top performers, though, the average time was significantly shorter than this – about 25 days.
Also, according to data provided by the same group, 64 meetings were scheduled and completed in November 2023 (median value, 161 contributors).
For top performers, this number is significantly higher – 121 and above.
As for the deals created, according to the same benchmark group – the median number in November 2023 was 21, but top-performing agencies created about 4x more than that – 83 (median value, 505 contributors)!
This data is only the tip of the iceberg.
In addition to the above-mentioned, the Benchmark Group also contains benchmarks for the following metrics: Deals Closed Won, Deals Closed Lost, New SQLs, New MQLs, and New Opportunities.
And if you want to check that data out as well, you can do it in the next few minutes, free of charge. Just create a free account and share your data source (anonymous for all parties).
DFY (Done-for-You) vs. Consulting – which one do agencies offer more?
According to our survey, almost half of the respondents (46.75%) stated that their agencies offer a blend of both “Do-It-For-You” Services and Consulting.
These agencies typically provide strategic guidance, with the possibility to take over the implementation and execution of those strategies as well.
This can include anything from building full-funnel advertising campaigns to managing social media accounts.
A good advantage of this type of offer is that it provides a comprehensive solution for clients – instead of looking for another agency to implement the strategy, they get the full service from one service provider.
Time to talk about industry verticals.
When it comes to specializing in industry verticals agencies specialize in servicing, the top-ranked is SaaS, Software, or Technology.
It was selected by 37.66% of the respondents and about half of those also selected Professional services, Healthcare, and B2B only.
Second-ranked are Professional Services, selected by 35.06% of the respondents. More than half of them also selected SaaS, Software, or Technology.
It’s worth mentioning that more than half of the agencies that reported specializing in Healthcare (an example of a very specific niche) also reported specializing in SaaS, Software or Technology, Financial Services, and Professional Services.
Interestingly, only 10 respondents selected a single industry vertical.
This can indicate that most agencies don’t really specialize in a specific industry vertical.
“The core insight from this survey is this: regardless of the size of the agency, the overwhelming majority of agency owners agree that niching down would have a positive impact on their ability to attract and acquire clients, yet very few operate niche agencies or have plans to become one. When it comes to taking action and niching their agency, the challenges cited by respondents were rooted in fears, not facts. This appears to be due, in large part, to varying and inaccurate definitions of how to niche down. Regardless of how you define “niche,” the importance of taking action on this insight will compound as the marketing agency category grows.”
Nick Bennett
Founder at Harness & Hone
Want to get highlighted in our next report? Become a contributor now
What do marketing agencies do when they need to generate leads? Which channels and strategies are the most efficient?
Here, we’ll get into the nitty-gritty of how agencies generate new leads and market their business.
According to our respondents, referrals from existing clients are most effective in generating deals. In second place, we have SEO which is also considered very effective by most respondents.
Inbound marketing, social media content, and paid advertising are considered somewhat effective.
Let’s dive into each of these channels individually:
Getting referrals from existing clients is considered one of the best ways for a marketing agency to generate new leads.
For starters, one huge advantage is that when a client refers your business to someone they know, it comes with an added level of trust and credibility.
It’s not someone you got through a cold Facebook ad, which means there will also be less friction when you’re closing the deal over a sales call.
Not to mention that referrals are the most cost-effective compared to other marketing strategies. You don’t need to spend a dime on expensive campaigns or outbound efforts.
Now, not all clients will refer your agency out of the blue, even if they are satisfied with your services.
In situations like that, a good idea is to either ask them straightforwardly whether they know anyone else who can benefit from your services or even introduce a referral fee that you’ll pay for each new deal they bring you.
Priyanshu Pande of Purple Patch Marketing says that “instead of expanding energy on the forever client chase, we focus on the ones we have and deliver great results and this increases our share of the wallet.
This strategy has helped us in the past quarters. Also, this has led to satisfied clients referring us to their networks. And no sales pitch we could have done would work better than a happy client vouching for us.”
Jon Kelly of 1st On the List also focuses on client referrals as “that is responsible for around a quarter of our continuous business.”
“The better we market, the more clients we bring in. The better work we do for our clients, the more likely they are to refer us to other businesses. It’s a win-win-win.”
Expert Insight: When it comes to referrals, you can’t rely on cheap tricks to try and get them. Instead, the best way to get referrals is to simply provide exceptional service that will make the client keep coming back to you and recommend you to close associates. If you overdeliver each time, word-of-mouth can bring your agency a ton of business.
Compared to channels like paid advertising, SEO is often a lot more cost-effective in the long run.
While there are initial costs associated with optimizing a website and creating quality content, the ongoing costs are often lower than those of paid advertising campaigns.
Additionally, organic traffic generated through SEO tends to have a higher ROI over time.
Another big benefit is the long-term aspect of SEO – unlike paid ads where visibility shuts off once your budget is exhausted, SEO accumulates over time.
Simon Hughes of Design & Build Co is one of our respondents who reported allocating an “additional budget to improve our organic ranking on search engines by adding more content.”
“With a portfolio of established brands, we have showcased our customer case studies and made sure they are valuable from a visitor point of view but also beneficial from an SEO perspective, leveraging key customer insights. We add regular insightful and relevant articles to the ‘news and insights’ section of our site. Our strategy is to boost our website authority so that we can improve our visibility in a very competitive market.”
Expert Insight: Still having trouble adapting to the new GA4 layout and navigating through the reports? Here’s a free Google Analytics 4 Engagement Overview Dashboard you can download and start using in just minutes. Instead of juggling through different GA4 reports to compile your most relevant engagement metrics, you can now get them in one screen to track them in real-time as changes occur.
Agencies that leverage inbound marketing focus on creating valuable content that addresses the needs and pain points of the target audience.
They provide helpful information to attract and nurture potential clients who are seeking solutions to their problems.
One big advantage of inbound marketing is that you establish authority in your niche – as clients educate themselves through your content, they’re more likely to trust your agency and keep you top-of-mind once they’re ready to make a purchase.
The most important thing here is that you can constantly provide quality content – including blog posts, ebooks, videos, social content, whitepapers, email newsletters, etc.
Do you leverage your social accounts as a tool for generating new leads?
Social media doesn’t have to be just about boosting brand awareness and posting cute videos – depending on the content you create, it’s a great way to attract new clients to your business.
Let’s take LinkedIn for example.
LinkedIn is an ideal social network for B2B marketing (if that’s your target audience). And by sharing content on LinkedIn, you can directly reach key decision-makers who might be interested in your services.
Even participating in LinkedIn groups relevant to your industry can keep you top-of-mind. You can do this by answering questions, sharing solutions to common problems, talking about some of your case studies, and similar.
Of course, not all channels have the same impact – but creating omnipresence across diverse networks and sharing your advice in several mediums (e.g. YouTube videos, Instagram reels, and LinkedIn content) is a great way to stand out and capture new leads.
For Abhi Bavishi of AutoDeus Technologies, a “social media presence has become crucial. It keeps us connected with our audience and sets us up as thought leaders in our niche.”
Expert Insight: Have a multi-channel presence on socials? Instead of going through each one to extract data, you can connect all of your most relevant metrics from each channel in a single dashboard using our free Social Networks Dashboard Template. You can connect LinkedIn, Twitter, Facebook, Instagram, or any other channel you want to track performance.
With paid advertising, one of the biggest benefits is that you can launch highly targeted campaigns.
Agencies can focus on specific demographics, locations, interests, and behaviors, to reach the most relevant audience for your service.
Plus, you get measurable results – you can track your ad performance in real-time and test a variety of elements until you reach a satisfactory ROI.
And even if the ads don’t result in immediate conversions, they can help in building brand awareness and recognition.
Partnerships with other agencies (or other types of businesses) can open up access to new, maybe even previously unreachable audiences.
And these audiences are generally more receptive to the agency’s message when it comes through a trusted partner. You essentially inherit some of the trust and goodwill that your partner has already established.
What’s more, joint marketing efforts can be more cost-effective than going alone.
For example, if you’re a copywriting agency that offers landing pages and web copy, you can partner with a graphic design agency that builds the website – this way, both of you have a complementary service to offer.
According to our survey, technology vendors are also popular among agencies – about half of the respondents stated that they participate in partner programs from technology vendors.
On other occasions, you can offer a referral payment for complementary agencies for every client they send you. Sometimes, partnering up with an agency in the same industry as yours is a good idea if they have a habit of sending work they can’t take on at the moment.
Expert Insight: Partnerships can take different forms – and one is our Collaborative Growth program. If you decide to join, you can build your private benchmark group and get an invite-only link you can share on your social networks (or through other marketing efforts). Then, you can start using that group to attract new prospects, at which point you can also decide to run a survey as a Databox partner. We then work together to prepare a comprehensive report (like this one!) that summarizes the data and insights we receive through the survey.
While not as easily measurable as paid advertising or some other marketing channels, podcasting can be a great way to get more leads into your pipeline and establish trust before you even start working together.
If you’re exploring niche topics and getting industry leaders as guests, you’re automatically establishing yourself as an authority and thought leader in the field.
Plus, if you have frequent guest interviews, it’s a great way to network with other industry professionals and create new partnerships.
Another great thing is that you can capture that part of the audience that’s generally more interested in audio content than reading blogs or watching videos, but has the same needs and challenges.
Later on, you can repurpose your podcast content into blogs, social media posts, and newsletters, further extending your agency reach.
Cold outreach gets a lot of hate these days – but it can be incredibly effective when done properly.
For starters, cold outreach allows agencies to specifically target businesses that are most likely to benefit from their services.
And unlike inbound strategies, outbound sales give agencies more control over the sales process. They can decide when and how to approach potential clients, tailor their pitches, and follow up systematically.
Engaging directly with potential clients also provides immediate feedback. Agencies can understand common objections, refine their messaging, and better understand the needs of their target market – and then use it to fine-tune their pitch.
Gabriel De Luna of Prodigy Digital Agency used to “rely solely on inbound marketing, but we’re now doing more cold outreach these days.”
Expert Insight: When sending cold emails to prospects, make sure you have a proper understanding of their pain points and are communicating that clearly in your message. These days, getting a response to cold outreach isn’t easy – but it’s even harder if the prospect doesn’t feel like you understand their challenges and have the solutions for them.
How often do you shut down the internet and go shake some hands in real life?
Depending on the specific event you’re attending, you can expect to meet a huge portion of your target audience there. This means you’ll have a unique opportunity to meet potential clients, partners, and industry influencers in person.
Unlike online marketing, events allow for face-to-face interactions with potential leads. This direct engagement is often more persuasive and memorable and helps build stronger connections.
Aside from direct networking, you can also boost your brand visibility through sponsoring events, setting up booths, or giving presentations.
Like most marketers and marketing managers, you want to know how well your efforts are translating into results each month. How much traffic and new contact conversions do you get? How many new contacts do you get from organic sessions? How are your email campaigns performing? How well are your landing pages converting? You might have to scramble to put all of this together in a single report, but now you can have it all at your fingertips in a single Databox dashboard.
Our Marketing Overview Dashboard includes data from Google Analytics 4 and HubSpot Marketing with key performance metrics like:
Now you can benefit from the experience of our Google Analytics and HubSpot Marketing experts, who have put together a plug-and-play Databox template that contains all the essential metrics for monitoring your leads. It’s simple to implement and start using as a standalone dashboard or in marketing reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your HubSpot and Google Analytics 4 accounts with Databox.
Step 3: Watch your dashboard populate in seconds.
When it comes to channels and strategies for marketing their own agencies, most respondents reported using the following:
But how exactly do they leverage these channels? Let’s dig a bit deeper into these channels below:
There are multiple ways agencies can market themselves through content marketing.
First, they can start with social media platforms on which their target audience spends time and share relevant insights for common pain points.
For example, sharing how to solve X issue most B2Bs experience on LinkedIn, if you’re target audience includes B2B organizations.
Another good idea is to share detailed case studies of successful campaigns and show potential clients what your agency is capable of.
You can do this on socials, your blog, YouTube, and several other channels if you repurpose it properly.
Email newsletters where you share weekly or monthly tips, industry news, or new insights can also be effective in building relationships and nurturing current leads.
One popular methodology when it comes to content marketing comes from Alex Hormozi – “give away the secrets, but sell the implementation.”
Andrew Becks of 301 Digital Media is one of our respondents that reported “increasing our focus on expanding content marketing efforts, while also investing in sales tools and talent to help grow the pipeline.”
“These changes have been a natural evolution of the company’s growth trajectory and in lock-step with an overall growth and expansion of the client services teams.”
Kamil Rextin of 42Agency also “focused more on content” this year and is “thinking about diversifying into new services.”
Expert Insight: Is LinkedIn a part of your content marketing strategy? If so, you’ve probably noticed how confusing their reporting tools can be – so here’s a free LinkedIn Company Engagement Overview Dashboard you can use to streamline the process. You can track everything from comments to shares and followers in a single screen and see changes as they happen in real-time.
Building a well-oiled SEO machine takes time… but once you have it, it’s one of the best (and most cost-efficient) channels to get customers.
Once you identify the common challenges in the industry and do proper keyword research, you can start producing relevant content that will attract your defined audience.
This can include blog posts, whitepapers, infographics, case studies, etc.
Using email marketing is one of the best ways to get your leads from “never heard about this agency” to “I want to do business with you.”
You can start by building a lead magnet that helps your target audience solve a specific pain point, and prepare nurturing sequences once they’re on your list.
This is also one of the most cost-effective strategies since you don’t have to spend any additional money on reaching them once they’re on your list.
Just be sure to consistently provide value in your emails – not just vague information and a CTA to your services.
Expert Insight: Mailchimp is one of the best ESPs in the industry – but it can often be confusing to extract insights from it, especially if you’re a beginner. But there’s a simpler way to do it – connect all of your key email marketing metrics in one place and track your performance in real-time using the Mailchimp Campaign Performance Dashboard.
Want to see immediate results from your efforts? Then you should probably consider paid advertising.
Google Ads is a popular choice among agencies. For this platform, instead of generic keyword targeting, you should focus on detailed segmentation.
For instance, if specializing in digital marketing for small businesses, target keywords like “digital marketing services for small businesses” and use ad extensions to provide more information like services offered, client testimonials, or a free initial consultation offer.
On platforms like Facebook or Instagram, you can create interactive ads that engage the audience. For example, use polls, quizzes, or interactive stories to gather opinions about marketing challenges.
If targeting B2B clients, use LinkedIn ads to promote thought leadership content. This could be in-depth articles, whitepapers, or case studies demonstrating expertise in specific industries.
Expert Insight: Want an easier way to manage your Facebook Ads results and see exactly where you’re underperforming? Here’s a free Facebook Ads Performance Overview Dashboard that you can customize in just a few minutes and have your performance ready to track in a single dashboard. No need to rely on Facebook’s confusing reports in the Ads Manager anymore.
Participating in industry events, conferences, and seminars is a great way to meet potential clients and industry influencers.
One idea is to organize workshops or seminars where your agency will demonstrate its expertise first-hand. You can host unique, themed events related to the latest trends to stand out from any competitors at the event.
For instance, a ‘Digital Marketing Hackathon’ or ‘Social Media Strategy Slam’ is something that would certainly attract a portion of your audience.
Or, you can host interactive workshops like AI in marketing where you can showcase how your agency is leveraging AI for some of your current clients in the industry.
This way, participants not only learn something valuable, but they also get a first-hand experience of your agency’s approach.
Before, during, and after events, social media can be a powerful tool. Posting about upcoming events, sharing live updates, and engaging with attendees online can increase visibility and establish a strong online presence.
Referral programs are a common marketing strategy for agencies, so how can you stand out with yours?
Here’s one idea – create a multi-level referral program where clients can climb to different tiers based on the number of successful referrals they make.
Each tier could unlock unique rewards, such as exclusive access to webinars, free consulting hours, or even partnership opportunities on joint marketing ventures.
You can even offer tailored marketing packages as a reward.
For example, a client who refers another business might receive a custom social media campaign or a personalized SEO audit for their own business.
Posting helpful content and chiming in with relevant answers to questions on online forums where your target audience spends time is another great opportunity to stand out.
While many forums are against direct marketing, you will get leads reaching out to you if they notice you’re active in the community and always provide great insights.
You can even get in touch with moderators to host an AMA if you think you have insights that the community will benefit from. Plus, this allows you to directly see what kind of questions they have about agencies so you can later tailor your campaigns accordingly.
Here’s one way you can use webinars to your advantage when marketing your agency – you can create a series of webinars, each focusing on a specific channel.
For example, something like “Social Media Secrets,” “Content Marketing Hacks,” or “SEO for 2024.”
Each session could feature a different expert from your team, directly demonstrating your agency’s expertise.
As for workshops, one way you can do it is to have participants work on real-life case scenarios.
For instance, a workshop titled “Craft Your Digital Campaign” where attendees work in groups to create a mock digital campaign, guided by your team.
Occasionally, you can even host special invitation-only webinars for top clients or high-potential leads. These can include advanced marketing insights, industry forecasts, or a sneak peek into innovative strategies.
Clint L. Sanchez of BlakSheep Creative says that “given the restrictions on physical events, we started hosting regular webinars and virtual workshops. This not only positioned us as thought leaders but also kept our engagement with potential clients active.”
Hosting interviews with well-known figures in your space (and related industries) is a great way to add more credibility to your agency.
And aside from only doing interviews, you can even introduce a separate series where you offer a look into the agency’s culture, workflow, and creative process.
Once your podcast starts gaining traction, you can partner with other influencers in the niche for joint podcasts and tap into each other’s audiences. This is especially beneficial if you have complementary products or services.
Expert Insight: To capture a wider net of your target audience, make sure you record both audio and video of your podcasts. Not only does this allow people to consume it in their desired format, but you can also post it on additional channels. For example, with both audio and video, you can publish your podcast on Spotify and YouTube.
Good PR efforts often lead to media coverage, which is something that your audience will generally find more credible compared to direct advertising.
Media outreach also allows agencies to precisely target their desired audience. You can select appropriate media outlets that align with your target demographic so that their message reaches the right people.
For example, if you’re targeting small business owners, you can try to get a contribution at Entrepreneur.
Being featured in news articles, blogs, podcasts, or social media channels can also significantly raise a brand’s profile and awareness among potential clients.
Some say that direct mail is dead, but that’s nowhere near the truth.
If you develop a proper strategy, direct mail can be an amazing way to generate new leads for your agency. And it’s not nearly as competitive as paid advertising or SEO.
Unlike digital ads, direct mail provides a physical presence, making it more personal. It can stand out in a space saturated with digital advertisements.
Furthermore, people are more likely to read physical mail than emails, which leads to higher engagement and conversion rates.
And as many companies focus on digital marketing, the mailbox is less cluttered than email inboxes, making it more likely for your message to be noticed.
Start by finding influencers who align with your brand’s values and target audience.
And don’t just look at their number of followers – consider their engagement rate, content quality, and audience demographics.
Depending on your product, you can leverage a variety of content formats – from Instagram stories and TikToks to YouTube videos and blog posts.
Each format offers a unique way to present your message and can be tailored to different segments of your audience.
Expert Insight: Bigger influencers (with more followers) aren’t always the best option for your brand. Instead, you should also give micro-influencers a shot as they can have a more engaged audience and loyal following. This can be especially helpful if you’re in a very specialized niche.
Ok – so we’ve seen what channels and strategies marketing agencies are turning to for lead generation and client acquisition.
But just how effective are these agencies in their acquisition methods?
According to our report, most agencies reported gaining between 1 and 20 clients in the past 12 months.
“You have to differentiate yourself from the competition!” – you’ll hear marketing experts shout at every corner.
But what does that mean for a marketing agency? How can you do it?
Building a micro-agency, specializing in a niche service, offering a unique way of getting things done… there are numerous options as to how agencies can go about differentiating themselves.
However, specializing in a specific industry vertical seems to be the most popular option.
To be specific, about 80% (80.52%) of our respondents believe that specializing in a specific industry vertical can positively impact their agencies’ client acquisition rates.
However, when asked ”Which specific industry verticals does your agency specialize in servicing?” – most of them choose more than one industry vertical, as we’ve seen in our previous paragraphs.
Also, by analyzing the results of the open-ended questions, we found that a lot of companies think that niching down means limiting their potential market.
So what’s the alternative?
Here are the 4 ways you can differentiate your agency according to the experts we’ve talked to:
Trends come and go, so be wary of building your agency around the latest one if you’re in it for the long haul.
By deliberately avoiding trendy tools and strategies, an agency can carve out a niche for originality.
And this approach can appeal to clients looking for fresh, unique marketing perspectives that don’t always blend in with the mainstream.
Plus, clients may see an agency that avoids trends as more authentic and trustworthy, as it’s not easily swayed by the market’s whims.
Brooklin Nash of Beam Content is one of our respondents that do just that:
“We’ve taken a stand “against” trends in generative AI, SEO, and boring gated assets. Our core message comes through in our social media presence, and it’s started to resonate. As a result, we get both referrals and inbound leads directly from organic social.”
A well-defined unique selling proposition helps position the agency clearly in the minds of potential clients. It makes it easier for them to understand why they should choose your agency over others.
What does your agency do best?
This could be a particular service like SEO expertise, creative content creation, innovative social media strategies, or industry-specific marketing.
It’s also a good idea to research the current market to identify unmet needs where competitors are not excelling.
This helps you find a way to position the agency in a niche that is both in demand and less saturated.
David Krauter of Websites that Sell points out that “customers look for reliable options with good results, and if your USP is not standing out, you’ll be left out in the crowd of competitors.”
“We, in our company, focus a lot on unique selling propositions while providing the best results. When your USP is top-notch, customers know who they are working with instead of not knowing what’s going on with the project and just paying for it without any promised results. The more you’re selling, the better you’ll be at gaining.”
Focusing on a specific niche can bring multiple advantages to marketing agencies.
This can be industry-specific (e.g., healthcare, technology, real estate) or service-specific (e.g., social media marketing, SEO, influencer marketing).
For starters, a specialization allows you to tailor your services to the unique needs of that specific niche, which makes your solutions more relevant and sets you up as an authority.
At the same time, you’re setting yourself apart from generalist competitors and attracting those clients who are looking for someone with more specialized knowledge.
Specializing also makes it easier to engage with key players within the niche, which is always great for expanding your network of referrals.
Eugene Koplyk of Wiserbrand is one of our respondents who advocates this differentiation strategy:
“We are actively differentiating our agency in the market by specializing in specific niches. Specifically, we have developed expertise in the furniture and jewelry sectors. To cater to these niches effectively, we craft tailored marketing strategies, including content creation and advertising campaigns designed specifically for these target audiences.
In addition to our niche-focused strategies, we prioritize delivering exceptional customer service. Building strong and lasting relationships with our clients is central to our approach. Happy customers are not only more likely to recommend our services to others but also tend to remain loyal to our agency.”
Meg Scarborough of Megawatt did this by finding a unique audience that her team specializes in producing content for:
“We identified some core niches that have technical and non-technical buyer and influencer audiences. Our agency has been built from day one to strategize and produce content (along with ancillary services: SEO, analytics, etc.) for these unique audiences.
Examples include CISOs down to security professionals; CTOs down to developers and DevOps pros; CIOs down to IT professionals; CDOs down to data scientists, and other data pros. We recognized that these audiences are challenging to market to, the products and services are challenging to write about, and having a team of folks who specialize in this helps us stand out from other content marketing agencies and generalist marketing agencies.”
With so many marketing agencies claiming to integrate AI into their processes, it might seem like a contradictory way to stand out.
However, because AI technology has so many different ways of leveraging it, you can build your USP around your specific processes.
This is what Laurent Ross of Oxygen does:
“To differentiate our agency in the market, we employ a multifaceted approach that encompasses cutting-edge technologies, innovative strategies, and a commitment to delivering exceptional results for our clients.
One of the key aspects of setting ourselves apart includes utilizing advanced AI technologies to stay at the forefront of digital marketing. By harnessing AI, we have been able to increase our productivity as an agency.”
Whether it’s best to niche down or not is one of the biggest questions new (and even experienced) agencies have.
So we asked our respondents to list both challenges and opportunities that specialization brings to the table.
Here’s what they had to say:
Potential clients might be concerned about sharing sensitive information with a service provider who also works with their direct competitors.
What’s more, clients might worry that they won’t receive a truly customized solution if the same agency is also working with their competitors.
And even if there’s no reason to be concerned, this can be a big challenge to overcome for some clients.
Trevor Henselwood of WebSavvy talked about this issue and said that “niching can cause people not to work with you because you work with their competitors.”
“Some verticals are more cautious than others. The other challenge is that if that vertical is experiencing a downturn, then it’s very hard to find clients willing to spend further.”
Specializing in a specific industry means catering to a smaller, more focused target market.
And while this can lead to expertise and a strong reputation within the industry, it also limits the number of potential clients you can service.
This is especially the case in industries where there’s cyclical demand and the need for certain services fluctuates based on seasons, economic conditions, or industry trends.
Daniel Thompson of Salt Water Digital mentioned how agencies “may encounter limited demand within that specific industry, potentially restricting your client pool.”
He also said that the way to “overcome this challenge is to diversify your skill set to offer related services or broaden your industry focus slightly. This ensures you can still attract clients from your chosen vertical while staying adaptable in a dynamic marketplace, ultimately benefiting both your clients and your business.”
Ravi Sharma of Webomaze agrees and adds that “while a specific industry vertical is an option, it might not give you long-term business.”
“To maintain a business, you need to expand it as much as you can. When you target a specific industry, the scope becomes limited. And this, in return, might not give the best result that is needed for the business to sustain itself. Being in the marketing field, I know that with expansion comes more competition, and if we narrow it down, the competition will also decrease. But to build a business, it’s important to see what can help you sustain yourself in the field.”
Another potential challenge with specialization in a specific industry is that it makes a business more vulnerable to downturns that are unique to that industry.
For example, companies specializing in luxury goods may suffer disproportionately during economic recessions when consumers cut back on discretionary spending – which means ecommerce marketing budgets will also suffer.
Sean Chaundhary of Alchemy Leads also says that “overreliance on a single vertical can pose risks during economic downturns or industry-specific crises.”
He also adds that “from an online visibility perspective, it can make you less discoverable through organic searches on platforms like Google when your focus is too narrow.”
Establishing a clear specialization early on helps you shape a strong brand identity and position yourself uniquely in the market – instead of going wide and then narrowing down.
You’ll also have a head start in developing the specific skills that are most relevant in your chosen industry. Resources (e.g., time and training) that directly contribute to core competencies will be invested in these areas.
Here’s how Kalie Fry of Atlas puts it in perspective:
“I’ll be honest, niching down is terrifying. It’s a gamble, but it pays off 99% of the time. You just have to commit to doing so. In 2020, we filtered prospects by shared values. In 2022, we narrowed our audience verticals. In 2023, we reduced our services drastically. And this upcoming year, we’re niching even more based on the platforms we prefer to work in.
While it sounds insane, my advice is to get crystal clear on those things early on. It didn’t move the needle much in those initial years, but now that everything has compounded, we’re seeing a lot of success. It’s one of those things where you have to trust yourself and the vision you have for the agency and allow every decision to flow from that.”
Specialization comes with deep expertise. This expertise is evident when the agency has a nuanced understanding of the industry’s challenges, trends, consumer behavior, and regulatory environment.
And with this knowledge, the agency can create more effective and tailored marketing strategies, which leads to successful case studies.
Case studies from the same industry are particularly compelling for clients. They demonstrate the agency’s ability to handle industry-specific challenges and deliver results.
Terri Hoffman of Marketing Refresh says “It’s important to clients that we have success stories to reference from their industry. They also want to know that we can write about their industry and understand their vocabulary/terminology.”
Here’s a cherry on top for all small agency owners reading this report – we’ve also performed an additional analysis of small agencies’ results (agencies with 2-25 employees) that managed to get more than 10 new clients in the past 12 months. At first, they might look as those who are successful and stable.
To be specific, we had 25 agencies with 2-25 employees that have had more than 10 clients in the past 12 months.
Out of these 25 agencies, 12 specialize in servicing professional services.
Now, we saw the general agency consensus on industry specialization in our previous subheadings, but where do smaller agencies stand on this topic?
While 88% of them believe that specializing in a specific industry vertical can positively impact their agency’s client acquisition rate, most of them did not pick an industry vertical to service.
And when it comes to the types of services their agencies offer, 48% of them stated that they offer a blend of both “Do-It-For-You” services and consulting.
What about getting clients? Are channels like SEO, content marketing, and paid ads as effective for smaller agencies as they are for bigger ones?
When we asked them about this, we found that referrals from existing clients are the most effective marketing for them, followed by SEO, Inbound, Social media, and PPC.
What’s more, most of them use the following channels in marketing their agencies: SEO, Content marketing, Social Media marketing, email, and PPC.
Here’s one more interesting stat – more than half of the smaller agencies we surveyed also participate in partner programs from technology vendors.
However, 60% of those seemingly successful agencies (according to the number of clients won) have monthly revenues up to $100,000.
This can indicate that they fall short when it comes to revenue and get lower-value contracts.
Lower monthly revenues, despite increased client acquisition, might challenge the conventional success metrics, suggesting a need for reassessment in revenue-generating strategies for sustained growth and profitability.
Making sure you always have a steady stream of clients is one of the most difficult tasks for marketing agencies – no matter how skilled or experienced you are.
And things can get even more complex if you’re leveraging several acquisition channels – you’ll be up to your neck on data and reports. For many, even one channel is too much to handle data-wise.
But you don’t have to rely on manual reporting and analysis – not when you have Databox by your side.
With Databox Dashboards, like SaaS Acquisition Funnel Dashboard Template, you can get a real-time, birds-eye view of your channel performance in one comprehensive dashboard. Just connect your data source, pick the metrics you want to follow, and turn them into professional visuals with a few clicks.
Then, automate your reporting process with Databox Reporting – in just minutes, you can have a sleek, easy-to-follow report that will amaze your shareholders with how simply the data is presented.
Now, all of this will better prepare you for analyzing your data… but how will you know whether your data is on point or your strategies need to be optimized asap?
Industry reports? Calling other marketing agency owners in your network and asking them directly?
There’s an easier way to do it – Benchmark Groups.
Companies can now get an instant sneak peek into how they stack up against competition in any key area – from finance to sales.
For marketing agencies, Harness & Hone has built a group for Sales Benchmarks for Marketing Companies. But there are 50+ more cohorts you choose as well.
So, the main question is… are you finally ready to simplify your analytics and reporting, and get real-time data on how competitor agencies are performing?
Sign up for a free trial and give Databox a whirl if the answer is yes.
Hey, we’re Databox.Our mission is to help businesses save time and grow faster. Click here to see our platform in action.
Are you maximizing your business potential? Stop guessing and start comparing with companies like yours.
At Databox, we’re obsessed with helping companies more easily monitor, analyze, and report their results. Whether it’s the resources we put into building and maintaining integrations with 100+ popular marketing tools, enabling customizability of charts, dashboards, and reports, or building functionality to make analysis, benchmarking, and forecasting easier, we’re constantly trying to find ways to help our customers save time and deliver better results.
Marketing Research Analyst at Databox. Being an experienced Strategic and Creative Planner, with more than 15 years of practice, Nevena is passionately dedicated to untying the knots and entanglements of marketing, sales, and human behavior in order to deliver understandable, useful, and actionable insights for businesses.
Get practical strategies that drive consistent growth