Overcoming Agency Growing Pains: 2 Agency Owners Talk Pipelines, Pricing & Employee Problems
Being an agency owner can feel isolating and lonely and these can be only a few of the agency growing pains you can experience. But it can be a whole lot better when you hear from others in the same boat. So, check out the stories of not one but two super successful agency owners as we talk about overcoming agency growing pains, including everything from their biggest challenges, to increasing prices and growing their teams.
In this episode, we’ll cover:
Overcoming the pipeline problem.
4 tips on increasing prices.
What agency role to hire for first.
What to do about a weak link on your team.
I could not be more excited to share this episode with you because it’s my first three-way! :) Today’s show guests are two digital agency owners Zach Williams, of Venveo, and Todd Earwood, of Money Path Marketing. These guys have been super successful - Todd’s agency doubled their business in 4 months and Zach’s did 4X revenue in one year, so listen close! They’re here to talk about the similarities and differences in their journeys as agency owners, as well as share some golden nuggets of wisdom and inspiration.
Agency Growing Pains: Overcoming the Pipeline Problem
One of the biggest agency growing pains as an agency owner is continuing to find new clients and sell while serving your existing clients.
Both guys agree, it’s a vicious cycle! You’re a marketing agency, but there’s never enough time to practice what you preach…
You work hard on your own marketing to attract new clients, then you get busy with them and end up neglecting your own marketing, so when those projects dry up you end up scrambling to procure new clients again… and the cycle repeats itself over and over.
The solution? Todd and Zach both say defining a specialization and positioning the agency to a specific audience greatly helped their pipeline problems. Todd said it made a major impact on the business when he identified and communicated: who they are, the market they serve, and what they stand for.
4 Tips on Increasing Agency Prices
Are you charging enough? Zach says he didn’t fully understand the value his agency was providing to their clients… in some cases, it was up to 100X! They were undervaluing services by not charging enough.
1- Measure and quantify value.
Chances are, you’re not charging enough! Clients should see a 10X return on their investment working with you. So, the key is to work backward to determine the value of your work and divide by 10. One of the best ways to determine value is to understand their 3 I’s - Issue, Impact, and Importance. Once you know what a project is worth to the client, you can better estimate its value.
2- Ask the right questions upfront.
As Todd said, there’s nothing worse than estimating a project at $50,000 only to find out the client was prepared to spend triple. So you’ve got to ask all the right questions to qualify your client, scope the project and determine what the outcome is worth to them. You can’t fully understand the scope of a project without all the right information. You have to gather as much information as possible from your client so you can fully understand what they need or rather, what they think they need and how you can help. Here are some of the questions you should ask new clients to determine value.
3- Sell outcomes and ROI.
A lot of agencies try to sell based on their portfolio and what they’ve done for others. Zach adds says past work can very subjective but outcomes and ROI are concrete evidence of value. It’s so much easier to sell on black and white facts.
4- Report and remind often.
Clients usually have short-term memory, right? They tend to forget where they started and have a hard time remembering or realizing the value your agency provided. Todd says it’s super important to report results to clients regularly. Help them remember where they were and where they are now so they can realize your value. Do this often and in person, rather than just via email. Data reporting can be your secret weapon to growing your revenue.
When to Hire (and Fire) for Your Growing Agency
What Role to Hire for First?
In the early stages of agency growth, creating your team can be the first of your agency's growing pains. It is often difficult to know when and who to hire first. Most owners want to get out of the account management and project management work… how did Zach and Todd do it?
Zach says he’s horrible with processes and he knows it. Know your strengths. He knew right away that he needed to hire someone who was process-driven and his first hire was a Project Manager. Todd agrees and says it’s important for the owner to know their own skillset then hire what’s missing. His first hires were specialists and he learned the hard way that he needed people to own the accounts.
It’s hard to give up that control but when you do it can be oddly refreshing. As Todd put it, “there’s pleasure in knowing people pay our firm money and I don’t have to personally work with them.”
Recognizing a Weak Link on Your Team
Hiring is hard - firing is even harder. That’s why they say: hire slow, fire fast.
Growing from 0-5 employees is different than 5-10 and 10-20… When your team is small each person needs to be nimble. As your agency grows, the people who got on board early have to adapt to the changing environment.
As an owner, you have to recognize the employees who cannot make the future journey and grow with you. There are ones who will be dead weight, so you’ve got to make decisions about them quickly. Todd says, in those cases he sees two choices: confront the issue and coach up -or- coach out. Either way, don't hesitate and act fast!
Need Guidance and Support to Grow Your Agency Faster?
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We do this by bringing together successful agency leaders to share strategies, offer advice, and reveal what’s working (and what’s not working) in their agency. The truth is, whatever you want to accomplish in life, nothing will help you go further, faster than getting the right adviser in the context of motivated peers. If you want to GROW fast and smart, Digital Agency Elite mastermind will help.
What's Next for Your Agency?
I hope you found this helpful and found a solution for your agency's growing pains in learning from others who have been in your shoes. But are there other challenges you are facing in your agency? How can I help?
I have covered topics from facing failing economies and recessions or how you can increase your profits without losing customers for your agency. Or maybe you want to know the four phases of growth within your agency and want extra help in taking your agency to the next level and selling your agency for a larger profit? I have all the information you need to help you through it.
You can learn more about my life and my experience as well as lots of tips, tricks, and insights by reading our blogs that cover a wide variety of topics.
If videos are more your thing, don’t worry, I’ve got you covered! You can check out more from my Ask Swenk series and more of my videos on my YouTube channel. There you will find advice from myself and other agency experts.
