How to Get Paid for Strategy You're Giving Away for Free with Spencer Powell | Ep #597
Do you charge for strategy or give it away for free? Are your prospects aware of the value of your thinking and research? Charging for strategy benefits both the agency and the client but so many give it away. However, when you charge for strategy, you'll grow faster and easier. Instead of giving away value for free, you can improve your processes and offer a highly detailed offer and a productized option. Today's guest found himself in this situation as his agency started to grow. He feels one of his biggest mistakes was not charging for strategy sooner. Now his team gets paid for thinking as well as doing. Here's how you too can charge for your brainpower right now.
Spencer Powell is the owner of Builder Funnel, a strategic marketing agency focused on helping design-build remodelers and custom home builders achieve sustainable business growth. With a combination of inbound marketing, software, and proven strategy, they shorten their clients' path to revenue and profit goals.
In this interview, we’ll discuss:
Why giving away strategy is a mistake.
Agency and client benefits of charging for strategy.
Giving your sales team tools for success.
Sponsors and Resources
E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.
Why You Should Get Paid for Strategy
Spencer’s journey in the agency industry started twelve years ago. Not knowing a lot about the business, he made mistakes early on. One of his biggest mistakes was not charging for strategy. Building a highly specialized offer and charging for strategy completely transformed the agency. So how did he turn it around and start getting paid for the thinking and the doing?
Like any new agency, the first years are all about gaining clients’ trust and figuring things out. That is why giving away strategy didn’t seem like a big mistake at the time. A couple of years down the line, however, they became much more focused and experienced. Spencer realizes now they should’ve started charging for strategy.
Their process includes looking into clients’ Google Analytics and putting together a custom game plan which took significant “thinking time”. So they add that time into the proposal. According to Spencer, it is part of the plan they present and it makes sense to include it in the proposal. He wants his proposals to have some element of customization to them. Adding "thinking" and research is a logical part of creating a really good plan.
The Agency and Clients Both Benefit When You Charge for Strategy
The shift to charging for strategy is fairly recent for Spencer's agency. It all started with setting the goal of becoming the best agency for remodelers and custom builders. They picked a very narrow niche and started working towards that north star.
Spencer knows ensuring that #1 spot would take a lot of groundwork to create a sound strategy and great execution plan. As they listed all the things they should do to create the best possible plan, the steps kept increasing. It was a good opportunity to justify charging for strategy. When strategy is billable, they’re able to spend an appropriate amount of time on it.
In hindsight, their free strategies weren’t customized enough. All their clients got similar steps to follow. Now, they take a few weeks to review a clients’ analytics and come up with a custom, detailed 12-month plan.
Building a Sales Team and Giving Them the Tools to Success
Two or three years down the line Spencer realized the need for salespeople selling custom marketing plans. But what level of knowledge and experience would his agency sales team need? Do they need to know the remodeling industry? How to sell and market within it? He was convinced he would never find salespeople with this specific expertise, so he decided to productize.
Now, Spencer is three months into hiring his first salesperson. When hiring, he didn’t look for agency experience. He specifically searched for a person with experience in their niche The new addition to the team worked out perfectly and he can already see the benefits. However, you can take someone who’s really good at sales and teach them the industry and services if you have the right systems in place.
With a productized offer, salespeople learn how to manage sales objections and value points. Eventually, as CEO you only need to assist with sales to add color and track progress. The key is to provide them with a solid process and the right tools.
Stories as part of the toolkit. Why is the agency owner always so good at sales? Because they have the stories and can use them on sales calls to draw in prospects with details on how they helped past clients. When you start sharing those stories with your sales team they’ll start seeing results right away. Eventually, they’ll have their own stories.
Shorten Your Sales Cycle and Increase Your Closing Ratio
Back when they improved their processes and stopped offering strategy for free the agency’s sales cycle was around 3 to 4 months. Their closing ratio has definitely improved since then. According to Spencer, this is most likely thanks to the positioning of a blueprint. Prior to the change, they were positioned from a brand perspective thanks to their niche. However, they still offered a list of deliverables similar to everyone else. Now, they have a $20K offer that includes an extensive questionnaire and a 4-week period to get a detailed plan with 12 months of deliverables.
That blueprint is presented to the client who has the option to implement it themselves. They get access to the agency’s training videos and SOPs to execute the plan. Companies under $2 million and over $15 million end up executing the steps in the blueprint internally. But the middle sector is Spencer's target. They’ll almost always move forward with the agency to implement the blueprint.
Filling Your Pipeline by Creating a Community
Overall, Spencer's agency is closing the same percentage of retainer deals and unlocking another option for people who want to self-implement. The feedback has been great because many people actually want to learn to do their own marketing. As an aside, they’ve also launched a website theme for their target industry based on conversion principles, layouts for portfolios, about us, etc. It’s modeled as a design-build approach mirroring their industry.
These options have also led Spencer and his team to create a community of companies learning to market with their tools. This fills their pipeline with prospects that can afford to pay for the agency for marketing services in a couple of years.
Do You Want to Transform Your Agency from a Liability to an Asset?
If you want to be around amazing agency owners that can see what you may not be able to see and help you grow your agency, go to Agency Mastery 360. Our agency growth program enables you to take a 360-degree view of your agency and gain mastery of the 3 pillar systems (attract, convert, scale) so you can create predictability, wealth, and freedom.
