Coronavirus spreading, stock market tanking, sports leagues canceling, global toilet paper shortage…the list of bad news goes on and on. And with so many people and businesses being negatively affected, it can be easy to get discouraged.
I’ve had so many calls with digital agency owners the last few weeks, trying to make sense of it all and what it means for their business, so I thought sharing these insights would be encouraging to you, especially if you’re in a similar spot.
Bottom line, we are entering into a period of uncertainty and disruption. And with uncertainty and disruption, there are even more significant opportunities available for those who recognize them, punch fear in the face and take action!
I’m not saying this easy or for the faint of heart, but I believe there has never been a better time for digital marketing agencies, especially lean and agile ones with 1-12 team members.
5 Reasons Why Today Is The Best Time Ever For Smaller Digital Marketing Agencies
The Corporate Shift: With the economy booming over the last several years, there’s been a shift from corporations using external digital agency partners to hiring those roles in-house. While this wasn’t great for agencies then, the next shift coming is from in-house back to agencies.
There are two main reasons why. The first is cost savings. It’s generally much less expensive to hire an agency vs. hiring employees who require benefits. The second is to pay for performance. It’s much easier to switch from an underperforming agency than switch out underperforming employees.
Lots of Great Talent Available: this next time period will feature lots of great talent that is available to add to your team. There are two main reasons why. The first is the likelihood of corporations downsizing their teams, which makes better talent available. The second is that as corporations are downsizing, the existing staff members experience higher workloads and increased stress, making them more open to new opportunities. Plus remote work seems cool again:)
Larger Agencies Can’t Keep Up: Marketing platforms continue to change at an ever-increasing pace, so it’s difficult for larger agencies to be as agile as smaller agencies and deliver consistent results. And if agencies start to cut staff, this challenge becomes even more significant.
An Even Greater Shift to e-Commerce: I think this is what makes today different from other recent disrupted events like 9/11 and the stock market crash of 2008. Today, people are used to shopping online, more and more of their spending comes online, and with health threats like the coronavirus, they won’t hesitate to increase it. This trend is nothing new (see the growth of Amazon and the decline of retail), but threats like this accelerate it even more.
If your agency works with e-Commerce companies, I highly recommend the e-Commerce Influence podcast with Andrew Foxwell and Austin Brawner.
The Pretenders Will Leave: when a type of business is hot (like digital marketing), and the economy is booming, so many unqualified pretenders enter the market. With hundreds of new “Facebook Ads Experts” and “LinkedIn Lead Generation Gurus” showing up on LinkedIn weekly, it creates more competition and more confusion for your prospects.
It’s difficult for prospects to tell who is legit and who’s a pretender unless they know the digital game. Disruption tends to weed out the pretenders, and that’s excellent news for legit digital agencies.
So if now is the best time ever for small digital agencies, how do you position your agency to win? Here are my 7 tips below…
How Position Your Agency To Win
Have An Emergency Fund: With disruption, you can’t predict when the significant opportunities will present themselves, and if you have plenty of cash to weather the storm, you can be patient and not be too stressed to miss them. I am a big fan of financial coach Dave Ramsey and his Financial Peace University system. Dave recommends having at least 3-6 months of expenses in liquid cash reserves to have financial peace.
If you don’t have an emergency fund, your first goal should be to open a savings account and fund it to $1000. Once you hit $1000, your next goal should be 3-6 months of expenses. If you already have 3-6 months of expenses in your emergency fund, go for 9-12 months’ worth.
Show Them The Money: Being able to show your clients and prospects the ROI of your services is a must. Having clear and easy-to-interpret reporting is critical for your clients. Case studies are an effective way to communicate the ROI of your services to prospects.
One good example of showing the ROI with a case study is from Eagan Heath, one of my clients who runs an ad and SEO Agency called Get Found Madison. Here’s one of his e-Commerce case study as shared on his blog LINK.
Put yourself in your client and prospect’s shoes; in uncertain times, they want to make safe, sound bets. They want to put “one quarter in” and get “two quarters out.”
Offer Proven ROI Services: I recommend offering paid ads, email marketing, chatbot marketing, and Conversion Optimization type services (like conversion expert, Andy Crestodina) as a part of your service menu. If you don’t do these things well, team up with or hire someone who is.
Performance Revenue Shares: If you have a proven track record of getting excellent ROI’s, I recommend having about 20% of your clients in revenue share agreements instead of monthly retainers. These performance-based agreements can pay off big when you hit a significant ROI. Of course, there is the risk of poor performance (especially with ever-changing platforms), so don’t put all your eggs in one basket.
As far as what percentage to ask for, it depends on your ROI results and the type of client. But as you’re running the numbers, an excellent place to start is 20% of sales (coming from your efforts). If you’re running high-spending ads accounts ($100,000+/mo), the percentage may be a little less. If you’re offering more long-game services like content, SEO, or social media, it may be a little higher than 20%.
A performance revenue share is also a good option for clients who are hesitant to pay high retainers. You could even offer a hybrid of the two, which would be a smaller monthly retainer with a performance revenue share percentage.
Brand Your Services: Brand them in a way that clearly describes the results your clients will get when they buy them. Businesses don’t buy your services or your team; they buy what your services and team do for them.
Turn Off The News And Social: When you’re mind is full of negativity and fear, you’re more likely to be overwhelmed and distracted, thus stunting your progress and missing key opportunities. Negativity input equals negativity output. The best move is to turn them off.
Pick Your Inner Circle Wisely: Because of all of the negativity and fear coming from the news and social (see above) and possibly from family, friends, or neighbors, you need to surround yourself with positive people who care about your wellbeing. I recommend joining a mastermind of like-minded business owners or hiring a coach (or both).
Embrace Remote Culture: now is the best time to integrate remote meetings with your clients and team, if you’re not currently doing this. I’m not suggesting eliminating face-to-face meetings, but don’t overly rely on it. You also see a time savings with going more remote.
If you’d like some help positioning your agency to win in these times, I am offering a limited amount of no-cost “Agency Breakthrough” coaching sessions via Zoom (so there no risk of infection:).
During this 45-minute session, we’ll create a crystal clear vision for your agency, uncover anything that’s sabotaging your growth, and you’ll leave renewed, re-energized, and with a next step action plan.