On: December 05, 2018 In: Growth Marketing

I don’t usually enjoy writing these types of posts.

They are generally always a mixture of not-so-humble bragging and motivational junk.

A way to brag and tout your progress as if you are some growth-hacking Silicon Valley guru yogi genius.

Just growth-hack it with social media, duh!

Sigh.

But I’ve been working in the agency space for half a decade and freelance writing for longer than I can count on two hands.

And after years of work that didn’t pay off, my latest agency restructuring resulted in generating $70,000 in monthly recurring revenue in just the first year alone.

Here are a few key steps that I implemented to get there.

1. Niche Up – Yesterday

Agencies are popping up left and right in the marketing space.

From SEO to PPC to full service, there is an agency for just about anything and everything

And that presents some serious issues when it comes to growth.

Unless your agency:

  • Has been around for a decade and got first-to-market advantage + brand awareness.
  • Has a wealth of connections that will drive referral sales, you are SOL.

In 2017, ad agency revenue growth moved 0.3 percent. Yep. 0.3 percent more.

Revenue for traditional digital agencies dropped 1.6 percent.

Digital marketing is critical. More critical than ever before.

So why are agencies struggling to move the needle?

We are all doing the same damn, generic, bush-league services that our potential clients are doing on their own already:

  • SEO.
  • Content.
  • PPC.
  • Maintenance retainers.
  • Website development.

Yeah, branding matters. Experience matters. But if you had both of those, you wouldn’t be reading about ways to grow your agency revenue.

Branding doesn’t pop up out of thin air. And customers don’t flow in the door giving you the necessary experience to land future clients.

So, what do you do?

Become the best at one thing.

Let me give you an example:

Think of full-service agencies (the ones doing all of those services I listed above) as McDonald’s.

Does McDonald’s do well? Sure, they do fine.

They sell every item in the category of Americanized food choices, just like a full-service agency sells just about anything you need for digital success.

Now, take a look fast food brands that are more niche. Companies like:

  • In-N-Out Burger: They literally have a menu you could memorize in seconds (hint: they only sell burgers).
  • Chick-fil-A: They sell chicken. Ever heard of it?

Why does each have cult-like followings?

Because they focused on a single niche in the fast food space and hit a home-run.

And the revenue comparison?

Chick-fil-A makes more per store than McDonald’s, Starbucks, and Subway combined.

Would you rather be pretty good at everything or be top of the game in one thing?

I think you know the answer:

With countless online resources enabling any person to start conducting full-service agency tools on their own, you can’t settle for being good at everything.

You need to be the best at one thing.

So good in fact that small businesses can’t even fathom how to do it like that on their own, forcing them to hire you.

This took me years to figure out. When I first started my agency, we were full service:

Web design, SEO, Google Ads, the works.

We got some great clients from Hyatt to Hulu, but the longevity wasn’t there. Too many competitors doing the exact same thing.

A year ago, I pivoted to content marketing with a laser-like focus on producing the best SaaS and B2B content marketing team I could.

I scrapped the dozen service options we offered for a single one that I could double-down on and knock out of the park.

Now we’re doing $70,000+ in MRR and we aren’t looking back.

Find the one thing your agency does 10x better than everyone else and don’t be afraid to restructure around it.

Double-down and hit the ground running.

2. Don’t Be Afraid to Fire Your Clients

Doubling down on your one niche offering is just the first step

Becoming more niche is your only hope in a full-service dominated industry

Digital marketing is becoming harder than ever before to stand out because so many are doing it. So the better you are at one specific offering, the higher your chances are of landing clients who will pay you money.

Good won’t cut it anymore. Only excellent quality work stands out today.

Beyond a niche for your services, you need to look at your current positioning in the market.

General agency services are often geared toward any type of company. Ones that will pay you just a few hundred a month to a few thousand.

Want to grow faster?

Fire clients that are sucking up your resources, paying minimal amounts, and requiring you to lower your quality of work.

I actively look to fire the bottom 10 percent of my client list.

Why?

I want to focus on doing better work for better clients.

When running an agency, it can feel impossible to turn down a client offering you actual dollars that will go into your bank account.

One more wouldn’t hurt, we’ll just outsource it.

It’s an extra $500 a month, we should just take it.

Wrong.

Small clients can be good in the short term to boost cash-flow. But low-paying clients often generate crappy results for both you and them.

In digital marketing, you get what you pay for.

And where lifetime value is concerned, those clients aren’t your cash cows.

If they only can afford $500 a month, you aren’t gonna generate ground-breaking results for them that allow them to spend $30,000 a month in the future.

Focus less on bad clients and bad client work and more on expert clients and expert work.

The better work you produce for better clients, the higher your LTV will be.

The more you help your client make, the more they will keep coming back and paying you.

Fire low paying, low return clients and focus your niche on top quality.

3. Stop Offering Free Stuff

As an agency owner, I know how compelling it is to offer free trials, test runs, or free products up-front to bring clients through the door.

When you are full service, it feels necessary to do:

  • Audits.
  • Review calls.
  • Strategy calls.
  • Free guides.

But as you niche down and become an expert at one thing, this becomes a losing strategy.

People are people: they take advantage of you. Give them an inch and they take a mile.

I used to offer free test products.

But that’s hours of work that I have to pay an expert writer on my team to research, outline, and write.

And then more hours to pay for an expert editor to polish and format.

The costs add up fast.

And offering free content to a customer who might only buy one or two pieces is a waste of time.

That’s why freemium models work. They show confidence in your product and the ability to produce something that potential clients won’t turn down.

And that only happens when you’ve followed step one: crafting your niche.

It allows you to perfect your craft over time and ensure that every single piece of work you do is top-tier.

When new clients want to work with us, they can get a test article for free. But if they want to use that article when it’s completed, it will be anywhere from $750 to $1,500 depending on what was produced.

This eliminates all risk for the potential buyer while protecting our bottom line.

And since we believe in the quality of our work and only create work in that niche, we know it’s going to convince them to buy.

Takeaway: Stop offering tons of free stuff to your potential clients. This often results in your team cranking out said free stuff as fast as possible because, well, it’s free stuff that is costing you a crap-ton of money to produce with zero guarantees of return.

At the very least, structure your free stuff to require payment if approved so that you only get very qualified potential clients asking for said free stuff, who can indeed pay you if the free stuff is good. 😁

Conclusion

In a single year, I essentially scrapped my agency, rebranded, reworked, and turned it into a machine generating $70,000 in monthly recurring revenue.

While it sounds like sunshine and daisies, it sure wasn’t.

But the biggest impact I got were from risky moves. But when your full-service agency is sinking or stagnant, you can’t just ride the wave.

  • Niche up. Now. Yesterday. Five years ago. Focus on doing one thing and doing it better than anyone else.
  • Fire the bottom-tier clients forcing you to produce bad work for bad pay.
  • Stop offering free stuff, you are getting taken for a ride. Only offer free stuff to clients who will pay for it if they use or enjoy the end-product.

There are no clear-cut steps to agency revenue growth. But these tips are what helped me what breakthrough years and years and years of stagnant revenue and long-slogs.

___
by Brad Smith
source: SEJ

 

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