If your agency is not generating 25% bottom line profit or more at the end of the year then you are leaving a lot of money on the table.
Learn 5 things you can start doing today to help increase your profit margins and build a thriving agency.
Over the last 15 years, I've worked with a lot of different marketing agencies. I've had the opportunity to work with agencies as a customer, partner, advisor, employee, and leader. I've been immersed in the life of an agency. Through this, I have also had the opportunity to help businesses of all sizes grow to be better.
When I started my first agency, I didn't understand what an agency really was. I had worked with an agency as a client prior but in October of 2007, I thought, "It can't be that hard."
It was "that hard."
The old adage of "the cobbler's children have no shoes" is very applicable to leaders of a marketing agency. They never do for themselves what they say they can do for their clients.
It's a fascinating problem to face. You tell your clients that you can do amazing things but can't prove it yourself:
At 12 years old, I started a paper route. It wasn't in folding and throwing papers that I found my "riches." It was selling subscriptions. The Press-Enterprise, out of Riverside, California, would have someone come and pick up a bunch of 12-14 year olds and we'd go to all the new neighborhoods to sell subscriptions.
I was good.
I was really good.
One of the contests, I made out like a bandit. Along with a bunch of money (particularly for a 12 year-old kid) I won not 3… not 4… but 2 whole bikes. I won a mountain bike and a 10-speed racing bike.
Yeah. I was hot stuff (in my own mind).
I loved the idea that I could work hard to make more money. If I applied myself, I could be better.
Oh, that picture is not me. I didn't look that cool.
Because I’m a change agent and love to create change when it creates a better outcome, I’m a fan of solving problems. One of my favorite quotes is from Albert Einstein:
“We can’t solve problems by using the same kind of thinking we used when we created them.”
All too often, we create problems because of the way we think about things then try to fix those problems without changing our thought process that generated the problem.
There is a bigger challenge that we face when trying to solve problems. That challenge is of time.
My twist on the above Einstein quote is:
“We can’t solve problems any faster than it took us to create those problems.”
Every company has struggled at one time or another with retaining clients. Just when you think you get the formula right something changes that blows everything up. That change could be market conditions (the current pandemic has thrown a big, honkin’ monkey wrench into the mix). That change could be something internal like a lost employee or a bad decision that ruined your revenue model.
I think the most common reason for a problem in client retention actually starts all the way at sales. Sales has the power to set expectations. If those are set properly, clients have a significantly greater likelihood of staying long-term. Of course, those expectations must be met.
Client delight, I believe is the core principle to client retention. If you have a happy client, that client will never want to leave you unless one of you outgrows the other. Even then, the relationship should stay strong long after the contract is over.
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