An Agency's Most Overlooked Asset
If you've ever walked into a networking event struggling to make payroll, you know the feeling.
Or maybe you felt it after obsessively hitting refresh on your inbox, only to find zero replies to your latest cold emails.
For agencies without a dedicated sales and marketing team, the feast or famine cycle can be exhausting, not to mention tough on your cashflow. A few new projects come on board, you spend months delivering, and when it's all said and done, you realize youâ€™ve done nothing to line up new clients.
When business is good, it's great, and when it's bad, it's nonexistent.
Bringing on more help can free up valuable time to get both tasks done, but that eats into your profits, and now you have to find more clients just to make the same amount you did before.
As an agency owner, your priorities are simple: deliver for current clients, and find new business. But when it seems like you donâ€™t have time to do both simultaneously, how will you ever get ahead?
The reality and the dream
For agency owners, the dream of growing a multi-million dollar business can be elusive. When the work dries up, it's a mad scramble to find new business. And the constant hunt for new clients overlooks the most valuable asset your agency has: your current clients. The truth is, most agencies are caught in a vicious cycle, taking on one quick, one-off $5k project after another, not understanding that the first project is almost never going to be your biggest.
What if you could transform those $5k projects into $50k relationships?
What if, instead of constantly looking for new clients with quick, one-off projects, you actually cultivated relationships that kept clients coming back to you for more work â€” work that they may not have known they needed originally?
If you don't want to have to churn through dozens of clients a year just to make a decent profit, then you need to focus on how to develop a system to earn more from your existing clients.
How to get there
On the Agency Advantage podcast, I've spent a lot of time talking with agency owners about how to break free of the feast or famine cycle. And while there are many ways to do that, one thing that comes up again and again is the importance of cultivating relationships with current clients. So I've boiled down those conversations into these three most important steps to build long-term, profitable client relationships:
1. Target clients that know your value
For many agencies, a pulse and a checkbook are the most important qualifiers when it comes to pursuing new clients. While taking that approach may be profitable in the short-term, in the long-term you're doing yourself a disservice. The fact is, more often than not, these kinds of clients are purely transactional they know what they want, and when they get it, they're gone, and onto the next low bid. You're never going to cultivate profitable, long-term relationships with clients that don't see the value of what you're offering. You need to find clients that will understand the value your agency brings to the table.
A true partnership is one that generates real, measurable ROI- a return that you're able to communicate clearly and your client is able to understand. This requires a more nuanced approach, one that means shifting perspective for agencies geared toward cranking out website after website without actually talking about business goals. Accomplishing that shift in agency mindset means that at the start of every project, youâ€™re asking yourself, "What does the client need?" instead of just "What does the client want?"
Agency owner Matt Inglot and I talked about this very concept on a recent episode of the Agency Advantage podcast. To learn more about Mattâ€™s approach to driving the shift, check out his guide to multiplying client value.
2. Know your client's business from the inside out
Imagine this for a moment:
You walk into a car dealership. You tell the salesperson you need something that's going to haul your three kids and their stuff to soccer practice, gymnastics, and music lessons. They say I've got just the thing for you, and try to sell you a convertible.
Chances are, you're not coming back.
Why expect your clients to behave any differently? If you don't take the time to wrap your head around the ins and outs of your client's business, they're not going to stick around, which means you'll never have the chance to develop a profitable, long-term relationship.
In order for clients to understand the value of your agency (remember, Step #1), you have to understand your client's business well enough to see what the problems are, and recommend the right solution.
If you really want to learn your client's business in a way that demonstrates your agency's value, you have to demonstrate authentic interest. Grab a coffee or take your client to lunch every couple of months and just listen to what they're up to. These sorts of informal conversations won't always lead to more work, but that's okay; the point is to think like the client, for the client, so when a problem comes up, you know how to solve it.
It's hard to implement this approach midway through engagements with current clients, so it's important that you make this kind of outreach part of the routine from the start of every project. Â You never want a client to think, "Where did this come from?"
3. Solve problems proactively
When you're running out of work, it's tempting to reach out to clients and ask if they need any help with anything. But this only serves to undermine your agency's credibility; it's the difference between being a vendor and being a valued partner.
It's your job - not the client's to show how you can provide value. They've hired you for your expertise, after all. How are you supposed to justify your hourly rate when you're taking orders, not offering solutions on your own?
As an agency owner, you need to act like the boss, and position your agency as an authority within your field. No one knows this stuff better than you, and the best way to reinforce that value to your clients is to solve problems before they light up your inbox with a big red flag marked High Priority. Together with your expertise, improved understanding of the client's business (see #2) gives you everything you need to propose the solutions to problems they don't even know they have.
What it means
If you want to break out of the feast or famine cycle gripping your agency, one of the best steps you can take is to stop assuming that find just one more client will solve all of your problems. There's nothing wrong with new clients and small projects; but if you're focused solely on filling the pipeline with new prospects, you're probably doing so at the expense of your current clients, and overlooking your agency's most valuable asset, those clients, is a recipe for disaster.
By following the three key steps above, you'll build lasting and lucrative relationships with clients that will increase profits for years to come.
Want to learn other tips on how to grow your agency and increase your profits? Check out the Agency Advantage Podcast, where every Wednesday I talk with a successful agency owner who shares their tips for agency success.