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8 Big Mistakes Agency Owners Make

8 Big Mistakes Agency Owners Make

This week on Agencies Drinking Beer, Kyle and Kevin interview Jason Swenk, who sold his digital agency for profit and now helps other agency owners grow their businesses. He tells us the 8 mistakes he sees agency owners making and how to avoid them. We also talk about Power Rangers for some reason.

Jason Swenk knows what it takes to run a successful agency. Based out of Atlanta Georgia, he started Solar Velocity in 2001, which he ran it for 11 years and then sold it for profit. By the end of his tenure his company had grown to nearly 100 people and boasted clients like Hitachi, AT&T, Coke and Legal Zoom.

Now Jason hosts the Smart Agency Master Class and advises small and mid-size advertising agencies, PR firms and digital shops to help them get to the next level.

Kevin and I sat down with Jason as he shared the top mistakes he sees agency owners constantly making.

Without further ado, her are they are in list form:

1. Not choosing a specialty

Too many agencies generalize - offering multiple services to any and all clients who will hire them. This usually means they are restricted to only working with local clients or clients they have a pre-existing relationship with.

We’ve talked a lot before on this site about the importance of specializing your agency. Jason says agencies are too reactive, taking on whomever comes to their door, and instead be proactive and go after only their 'perfect' clients.

Agency owners are often afraid to pick a specialty because:

a) they don’t know their perfect client,
b) they're afraid to turn away work or
b) pick the wrong specialty.

The most successful agencies tend to have a crystal clear path of where they're going, and they're able to build authority and credibility in the market they choose.

“How can you relate to someone’s biggest challenge if you don’t understand who they are?”
- Jason Swenk

How do you find out who your perfect client is?

Look back at your past client projects and ask yourself:

  • Which were the least painful clients to work with?
  • Which ones were you and the team happiest working with?
  • Which ones were the most profitable?
  • Which ones were you able to deliver great results for?

Usually the answer is staring you back in the face.

Choosing a horizontal

Some agencies choose instead to specialize in a horizontal, like a narrow scope of service or technology.

A word of caution if you choose to specialize in a technology:

  1. It should be an up-and-coming technology that none of your competitors know. Don’t specialize in Wordpress or any other ubiquitous technology.
  2. Realize that most technology has an expiration date - eventually all your competitors will know it or the technology itself will be obsolete. Ride the wave as long as you can but don’t let it be your only stake in the ground.

To be ultra-specialized you can pick a vertical and a horizontal (eg: conversion optimization for food and beverage clients, PR for health care products etc.). Just make certain that the market is big enough to sustain you.

Any agency, local or otherwise, that pitches against your agency for that perfect client won't stand a chance.

2. Relying on word-of-mouth for leads

Word-of-mouth referrals are the lifeblood of most agencies.

However, the problem with relying on them to generate leads is that you aren’t directly in control of whether or not it happens. Your fate is in the hands of other people.

Jason says that agency owners need to set up the proper systems to generate new business instead of completely relying on referrals.

A great way is to drive traffic to a targeted landing page, capture leads and then create content to nurture them into becoming clients. You know, that whole "inbound marketing" thing everyone is so crazy about?

Herein lies another mistake agency owners make — going about content marketing the wrong way...

3. Doing content marketing wrong

Too many agency owners lead with their portfolio, case studies or testimonials, thinking it will get new leads ringing them up.

Worse still, most agency blogs are, sad to say, boring.

They write about themselves (recent awards, new projects or employees) instead of content that will help their readers solve a problem.

The other problem is that agencies use generic calls-to-action like “Get a free consultation”. In Jason’s experience this is going about it all the wrong way.

Instead he recommends this as a general approach that works for most of his clients:

  • Drive targeted traffic to a landing page that answers a burning question your perfect client has. You should use Adwords combined with organic search and social media to do this.
  • Include a call-to-action that offers the visitor something of value beyond a free consultation. Webinars work great for this because it lets you get up-close and personal with them without requiring they book a meeting with them (and also saves you time not meeting with every new lead).
  • Then use content marketing (blog posts, email etc.) to nurture those leads to convert them into clients.

Let's look at an example.

Game Changer Profits drives traffic to their home page. Unlike most agency home pages, it includes one call-to-action; Sign up for a free webinar.


There's no past work, case studies, blog posts or the usual stuff you see on agency websites.

You may think this is an ‘out there’ kind of approach for an agency, but can you guess what the page converts at?

60%

Once people get on the webinar, a significant portion of them get closed on the spot.

Start a podcast

Jason recommends every agency owner start a podcast.

Podcasting has seen a huge comeback in the last couple of years with unique monthly podcast listeners tripling from 25 million five years ago to 75 million today.

If you do it well, your podcast will pull in listeners and keep them engaged. Because of the passive nature of podcasts, listeners will spend more time with you than if they were to just a blog post.

4. Not engaging with other agency owners

“No man is an island”

— John Donne, 1624

With the exception of restaurants perhaps, agencies are one of the toughest businesses to run successfully. The client turnover is high, the sales cycle is long and the profit margins are narrow.

No one else knows what it’s like to run an agency like other people in the exact same boat, but all too often, agency owners go at it alone, bearing all of the burden on their own shoulders.

It's therapeutic to get out there and talk to other business owners like yourself. Be honest about the challenges you are going through. It will help you push through the low points faster than trying to handle it all yourself.

What if you’re worried about giving away information to potential competitors?

When talking with other local agencies, be honest about the high-level issues you’re facing but naturally don’t share everything or give away trade secrets that form your competitive advantage.

If you’re still worried about it, then don’t talk to local agencies. Reach out to the wider community of agency owners in other cities and learn that way. Either way, don’t isolate yourself when you need help.

5. Not investing time in learning

It’s easy to get into a comfort zone and stop evolving.

That could spell death for your business, especially in a digital agency where clients expect you to stay ahead of the curve and know more than them.

Jason recommends setting aside time each work for discovery days to invest in yourself.

Read books and blogs, listen to podcasts, attend webinars and conferences. Share your knowledge with others, which will help establish you as an expert while also cementing the knowledge in your own mind.

“The more that you read, the more things you will know. The more that you learn, the more places you'll go.”
— Dr. Seuss

6. Proposing “marriage” too early with clients

It’s common for agency owners or account managers to pitch the "big build" early on. They want that 6 month web build that will keep their company flush with cash.

"That’s like asking someone to marry you before shaking their hand for the first time and it’s a great way to lose the client."
— Jason Swenk

Instead he recommends the “foot in the door” offer.

Propose something small, like an audit or strategy — something that provides value to the client and them define the direction of the big project.

If the price tag is small enough, you'll fly under the radar and in big organizations you'll get to skip the RFPs and other red-tape that usually go along with big budget projects.

The point of the FITD offer isn't to make a lot of money. The point is to build trust and authority so you can dramatically increase your chance of winning the big project.

Jason says that the agencies he’s consulted for who implement this strategy have, on average, grown by 200%.

7. Selling packages

It’s common for inbound agencies to propose retainer packages with clients.

The low-end package might get the client 1 blog post/week while the high-end package gets them 4 blog posts, or something to that effect.

Jason says that’s a big mistake for a couple of reasons:

  • It devalues the perception of your service - You're offering a high-end service but positioning it as a commodity product.
  • It hurts your credibility - You are supposed to be the expert advising clients on what to buy, not selling them whatever they can afford.

Instead learn about your prospects biggest challenges and proposing what you believe is going to solve their problem.

Ask the right questions and really listening to uncover the answers.

Then tell the client, “Based on what you told me, I recommend X”

What if what you recommend is more than the client is willing to spend?

It's ok to have a cheaper option in the back of your mind to offer the client in case they can't afford what you're recommending. Just don't throw it out there at the beginning, keep it in your mind and use it when you need it.

You can position it like this, “OK, In that case, let’s try Y. It’s not going to bring as much revenue as X that I recommend, but it will get you on the right path and allow us time to prove the approach works.”

Using this strategy will ensure the client still perceives you as an expert and not simply a person trying to sell her what you think she can afford.

8. Selling on price

Promoting low prices, like packaging prices, is a big mistake that will hurt your agency in the long run and bring in the wrong types of clients. It's easy to do when you just want to make the sale, but stop think about what your services are worth.

If you’re building a website or developing a marketing strategy that will make your client millions of dollars does it make sense to only charge them $10K?

The key is to first know how much value your service brings to clients. Start by measuring the results of your current and past projects. Too many agencies move on to the next project instead of investing time in measuring their results.

Once you know the results you’re bringing clients it’s going to be a lot easier to sell your services at a higher price because clients will see the ROI and realize they’re still spending a lot less compared to what they’ll make in the end.

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Proposify Biz Chat

About the show

The Proposify Biz Chat is hosted by Kyle Racki, co-founder and CEO of Proposify proposal software. Each week, Kyle chats with friends and special guests about tips and strategies to help entrepreneurs, startups, and agencies grow profitable businesses.

author bio

About Kyle Racki

CEO of @proposify. Product designer and podcaster. Dad to two beautiful boys. Karaoke superstar. Freed cultist. Batman enthusiast. Follow me on Twitter

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