There is no one-size-fits-all agency business model. 20 agency owners share the pros and cons of their pricing models.
Agencies | Oct 26
Tristan Ruml on October 25, 2017 • 15 minute read
They want a proven way to blast past the competition and build a profitable and fun agency.
The only guaranteed way to do that is with MARKETING.
You are marketing your agency and its services, right?
If you’re not… FIX THAT FIRST!
We see this all the time at DoInbound. Marketing agencies that aren’t creating content, running ads, or using email marketing.
You see, you need to view your own business as your most important client. Because you are. Your livelihood depends on your agency’s ability to make money.
However, many agencies struggle to generate leads for themselves. If they just applied their own expertise to their business, they’d have more clients than they know what to do with.
This means you’re “eating your own dog food.” You’re selling services that you rely on to get results. This will help you feel confident in your ability deliver for your clients and increase their confidence in you.
Now that I’m off of my soapbox, here are four underutilized marketing strategies that you can use at your agency to boost your sales.
They aren’t sexy or “ninja,” but they are proven marketing concepts that can make your agency more profitable than ever before.
Now let’s dive in!
Everyone has heard of the foot-in-the-door sales technique, but there’s a way to use it in your agency’s marketing too.
The strategy is to offer a low-cost service to potential clients that is a piece of your core service. This reduces the risk of purchasing for the client, making it easier to sell and allowing you to deliver results and build trust. It will be easier for you to upsell them.
This is a great way to get paid for work upfront while demonstrating your expertise.
Once they’ve seen your ability and have worked with you, it will be easier for them to trust you with a larger project.
At GuavaBox, we use discovery projects or GamePlans as we call them. It’s an in-depth dive into the client’s business and full strategy creation. It’s basically creating a blueprint to help them reach their goals.
The key to this strategy is reducing the risk for clients and creating a relationship.
Use an AppSumo Deal
An easy way to get started is to use an AppSumo deal. They have a lot of lifetime and agency deals or “spy” software you can purchase and then repackage as an offer.
Say there’s a competitor research tool that lets you see the top performing social posts of a business. You can package this offer up as an in-depth audit of 10 social media accounts from competitors and price it at $99. Then you use the software and send them the report. You can build you a relationship and show them how to use the report to improve their own social media marketing.
Find White Label Software
Google “white label marketing software.” Shop around and find options for software you like and leverage with your branding to get a foot in the door. The typical services you’ll see are social media or reputation management.
You can use Workify to create a few white-labeled offers with custom landing pages. They can even fulfill the offers for you, so you do not even need to manage the process in-house.
A Trial Run of Your Service
This could be something simple like offering to set up a client’s social profiles or running an account for a few weeks at a discounted rate. Sometimes there is software to help you do these as well. You want to make sure it’s something you can easily deliver and isn’t too time-consuming for your agency.
Generate Leads from Databox
Databox has a Template Gallery that allows any digital agency to publish the reports that they use with clients. Then, any marketer can download these templates into their own account. That lead gets automatically sent over to the agency for them to reach out and offer assistance. The top agency in the Databox Partner Program has generated 470 leads with this strategy!
All of the templates connect to specific marketing technologies. So, if you publish a HubSpot template, you know that any template users are also HubSpot users!
Create a Discovery Project
For a discovery project, package a portion of one of your products and sell it as a standalone. For example, a website audit or competitive analysis.
We created Let’s GamePlan, which was based on the deep-dive process from our inbound retainers and website deals. We took this in-depth analysis and packaged it up. We sell this at +$5k, which is far less of a financial risk for a client interested in a 12-month retainer.
We also reduce the risk for the client by letting them know the resulting strategy is 100% theirs. They don’t have any obligation work with us to implement it. But due to the power of the positioning and value of the results, we have a 100% up-sell rate on it.
View these foot-in-the-door tactics like dating before getting married. A smaller upfront project makes more sense than jumping into a large retainer that both parties immediately regret.
If any of these offers are a fit, you want to be moving the conversation towards a larger deal or project. If you just deliver the service but don’t up-sell, then this strategy isn’t effective for building a profitable and sustainable agency.
In the world of marketing, one of the most fundamental principles is the Unique Selling Proposition or USP. And guess what? A lot of agencies don’t have one!
Some of the world’s most well-known brands have used USPs to explode their growth and stand out from the competition.
A couple of the most popular examples of USPs are Domino’s Pizza, FedEx and Lens Crafters.
This USP made Domino’s blow up in the competitive pizza market and differentiate themselves. Rather than competing on taste, they found a something about their service to make them stand out from the competition. Domino’s knew quick delivery and a hot pizza are important to pizza fans, so they made a rock-solid promise if they couldn’t deliver on time.
Most businesses would be tempted to focus on quality or price. However, Domino’s didn’t say it was the best tasting or cheapest, just that the pizza would be there fast. They emphasized a uniqueness about their service that the competition didn’t focus on. If you wanted a hot pizza at your door as soon as possible, you’d call Domino’s every time.
FedEx isn’t talking about price or reach of their network. Their core market is businesses who need something quickly delivered. Business moves fast. There are tight deadlines and communication needs to be efficient, so FedEx focused on speed. They didn’t tell you it would be cheap, but if you were a business, you could rest easy knowing your package would arrive when it needed to.
When shopping around for custom glasses, a clear and tangible promise like Lens Crafter’s stands out. For some customers, the speed of service isn’t an issue. But for those pressed for time, such a business professionals, this USP is the perfect reason to check out Lens Crafters. Rather than creating a generic statement like “Because Everyone Deserves Good Vision”, Lens Crafters focused on a pressing pain for their market and created their USP around it.
So, if household brand names are using USPs, why aren’t you?
A compelling USP will have a definite impact on businesses trying to find an agency. A simple and clear statement can do a lot to differentiate your agency from the competition.
Always be willing to rework your positioning and hone in on improving it, but these steps are a start to crafting a compelling USP.
This marketing strategy is one most agency owners have heard countless times but still don’t do!
This is a big mistake since this is one of the most fundamental pieces of building a profitable and enjoyable agency.
We’ve had dozens of agency owners come on our podcast, Agency Journey, share how finding a niche transformed their agency.
Niching down helps agency owners simplify their internal processes, establish credibility in an industry, and generate high-quality referrals.
There are different ways to niche down.
You could be like Robb Bailey and build a niche service and industry agency that focuses on just Facebook Ads for independent gyms.
Or you could specialize in a type of business like Anthony Guerrera from Inbound Fit that has niched down into health clubs.
Remember, finding a niche is a process. Make sure you take time to explore different options and test what’s working for your agency.
Here are several different methods to help you select a niche.
Discover Your Niche Numbers
This method focuses on the lifetime value, the profitability of services, and size of the market. You want to ensure that you can be paid well for the work you do and can scale.
You also want to research the length of sales cycles for customers in this niche.
If it’s a long sales cycle, it will take longer for clients to feel the results of your work. This can cause problems with the client. But longer sales cycles can also mean much bigger paydays.
On the other hand, if they have a shorter sales cycle, then your marketing efforts could quickly have an impact on their bottom line. Customers can feel the immediate impact of your services. A shorter sales cycle may indicate that the client is in an industry with less advertising money. This means you may struggle with pricing to deliver results and still be profitable.
Explore Your Industry Interests
If you’re going to dive deep into an industry, might as well pick a niche you’re interested in. If you’re interested in dentists or HVAC or whatever, pick one you could see yourself enjoying working with.
If you don’t like lawyers, then you shouldn’t consider targeting them as clients even if the pay would be great. It’s your agency. Build one you’ll enjoy running, and that has clients you’ll enjoy working with.
Leverage Your Experience
This is the simplest way to find a niche if you’re an established agency. If you’ve had success with a specific type of client, then that’s a niche worth exploring. You already have proven results in the industry which means you already have case studies. It will also be simple to create processes to replicate the success you had with past clients.
Check Out Your Network
If you previously worked in a specific industry, that’s a niche worth checking out as well. You’ll already understand how the niche works and likely have contacts that you can get in touch with. It will be easy to ask your contacts questions and determine if it’s a niche worth getting into. Your network may even be in need of your agency’s services!
In your social circle, you have some friends or family members in a specific niche. Ask them some questions about it and learn if it’s a fit. They may even be excellent clients for you.
There are hundreds of types of businesses out there, so take time to research your options.
Here’s a list of several industries and niches you can check out that may help you generate ideas.
The primary source of leads for most marketing agencies is referrals. Pretty much no matter the industry, referrals close at higher rates. According to Nielsen, people are 92% more likely to trust referrals from people they know.
You have the established credibility to set yourself apart, and that’s what businesses need to get that edge.
Referral business can also be more easily up-sold into larger retainers too. The lifetime value for new a referral customer is 16% higher than non-referrals according to the Wharton School of Business.
However, most agencies rely on referrals happening organically.
You need to be thinking about how to create a referral marketing strategy.
This is a huge untapped opportunity for agencies.
Incentivizing and asking for referrals will allow you to take full advantage of one of the most potent methods of growing your business.
And don’t worry, incentivizing doesn’t mean breaking the bank. According to the American Marketing Association, results from a study showed that offering a reward increases referral likelihood, but that the size of the reward does not.
With a referral strategy, the key is to understand your numbers and lifetime value. You want to make sure you’re generating quality leads with an incentive that keeps you profitable.
The first step is to figure out what your referral strategy is the incentive.
Consider the lifetime value of a client.
Lifetime value shows you what a client is worth to your business. Understanding these numbers can help you get creative. If you see you only break even on the first month, but after that, the client will be very profitable. You want to generate more of that type of business.
The most popular ways to do referral marketing for agencies is a commission or a “freebie” of their service.
An example would be giving a percentage of commission of 15% to whoever sends you website projects. This type of commission strategy is effective with your agency’s partners as well.
Another example would be giving clients a month free of service when they refer three new clients.
Next, you need to identify who to ask for referrals from. You don’t want to be asking individuals who are completely dissatisfied. A good way to figure this out is to run a survey of your clients and get a gauge for how happy they are. The happier they are, the more likely you are to get referrals from them.
Take into consideration their networks as well. They may have a partner you’ve heard about that you would love the chance to work with.
Be sure when asking for referrals to be clear about who you want them to refer to you as well, so you’re not wasting time with poor fits.
Referrals can intimidate agency owners. They want to make sure they aren’t hurting their business by asking for more business or have an incentive that hurts their revenue.
This is why having a survey and knowing your numbers is important.
Remember, you are always able to say “no” if the client isn’t an ideal fit or you wouldn’t be profitable.
These four simple strategies will boost your agency’s marketing.
To effectively implement these strategies you need to know your agency’s data, competitors, and financials.
Knowing what a client is worth to you and if you can still be profitable is key to mastering these channels. If the numbers work in your favor, then take a step in making it happen!
Remember, the first step in all this is deciding to market your agency. Treat your business as your primary client. This is the first step to working with better clients becoming a more profitable and enjoyable agency.
After you get a meeting with a best-fit client, you can use Databox to show how you have helped similar companies in the past. Most agencies simply talk about their HubSpot partner status, or their array of services, or their collective years of marketing experience.
Instead, you can show the specific tactics you used with similar companies, and show your history of strong marketing performance.
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