The 10 Biggest Mistakes Agencies Make

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Jami Oetting
Jami Oetting



biggest mistakes agencies make

When you first started your agency you were filled with excitement and hope — you just knew you would be successful. As time has gone and you’ve had great (and not so great) experiences with clients, the excitement has begun to wane as day-to-day realities wear you down.

We all make mistakes. Lots of mistakes. The good news is we learn more from them than whatever we do right. Now this doesn’t mean we’re offering a license to go out and deliberately screw up. We are, however, offering an opportunity to avoid the biggest “gotchas” we’ve seen agencies make over the years using these suggestions:

Mistake #1: Losing Your Vision

Remember your big “why”. WHY do you do what you do? What makes it important to you? To the world? Don’t take on any client just to keep the doors open. Chances are you’ll end up compromising your core values and dream. You can only do this for so long before you feel trapped. Don’t get caught in that whirlpool!

Mistake #2: Being Another Jellybean in a Sea of Candy

Jellybeans are jellybeans. They come in different colors, flavors, shapes, and sizes. But is any jellybean brand really memorable? How about Bertie Bott’s Every Flavour Beans — a risk with every mouthful. You might not like them once you’ve eaten one, but you’ll never forget them!

Take the same time and care to truly differentiate your agency as you would any client. You may be a jellybean in a candy sea, but you’d better be the best darned, unique, and extraordinary jellybean there is! Do what you preach to your clients — be your best example of great positioning.

Mistake #3: Flying by the Seat of Your Pants

When most agencies start out, it’s a couple of people and a few clients. Eventually they grow to the point where they find it hard to grow any bigger. They can’t scale because they lack finely-honed policies and systems with processes that manage daily activities and are documented. Without them, any staff they hire find it hard to be productive.

Most agencies take the path of least resistance — just so they can get on to the next urgent thing. The processes they use mirror how things worked when it was just the two of them. That got them to where they are today, but it’s no longer enough. Now it’s time to take a step back, figure out what’s costing the most money and frustration, and design them to be cost-effective and efficient.

Mistake #4: Not Charging Enough

We’re not talking about raising your hourly rates. Most agencies charge based on what it costs them, plus a little bit extra for operating expenses, and a bit more for profit (maybe). And while that’s a good place to start (because you’ll always need to know your costs), that’s a no-win situation.

Ron Baker, founder of VerasageInstitute (a think tank), points out that economists have proven that all value is subjective. When you understand how much your customer values your services, and you charge accordingly, both of you are getting what you want.

When you use the typical costs-plus pricing model, there will always be a winner and a loser. The client doesn’t want to pay any more than he has to and you don’t want to lose money. If the client doesn’t perceive that he’s won, he’ll challenge every charge. And if you don’t think you’ve won, you’ll come to resent the client. See? No-win scenario.

With value-based pricing, you both win. In Pricing on Purpose, Ron deconstructs different pricing strategies and gives you lots of examples to show you how you can use them to more effectively charge for your services. (BTW - Give a copy of his book to your accountant.)

Mistake #5: No Disciplined Sales System

Along with Flying by the Seat of Your Pants, few agencies have and follow a sales system that results in accurately forecasting their pipeline. They get as far as an elevator pitch and whipping out an agency capabilities presentation whenever someone calls. Few use a spreadsheet, let alone a CRM, to track and follow-up with prospects, specify how much revenue, and the probability of the business closing. They might have a list of target accounts, but where’s the sales call planning guide with phone script, proscribed follow-up actions, qualification questions, lead nurturing emails, content goodies to send, forecasts, results? What’s your value proposition? Who does what when?

The most successful agencies we’ve seen have their entire business development / sales system and processes laid out, documented, scripted, religiously follow it, and constantly tweak to improve results. Those are the agencies that achieve double-digit growth. And because they’re doing such a good job forecasting new business – they’re also able to staff up appropriately.

Mistake #6: Hiring Fast, Firing Slow

Which brings us to desperately hiring a warm body only to watch them fail because they were the wrong person for the agency. Note we said agency, not job. It doesn’t matter how skilled she might be, or how much knowledge and experience she has. If she doesn’t share some of the same core values of your agency’s culture, she’ll be the cog that breaks the wheel. The right cultural fit (attitudes, values, and ethics) is the single most important factor in a new employee’s success. According to Leadership IQ’s study, Why New Hires Fail, 89% of new hires fail within their first 18 months because of their attitudes.

Smart agencies have developed their hiring process to screen for people who are good cultural matches. And while technical skills, experience, and knowledge are important, it’s easier to place her into a job that plays to her strengths. But if she doesn’t “fit in,” the faster you let her go, the better off she, and your agency, will be.

Mistake #7: Neglecting Agency Marketing

In the pressure cooker that is delivering client work, most agencies conveniently ignore marketing themselves. Until the day a client walks and suddenly they’re checking with the bank to see what kind of overdraft extension they’ll get. The CEO starts screaming, “We need a new website NOW, gotta re-position ourselves, what’s up with our blog, somebody put a media plan together, where’s that list of conferences, yada yada yada,” while staff cowers in fear at this monster who has exploded out of the corner office.

Not marketing your own agency with the same TLC you give your clients is akin to death by a thousand paper-cuts. Relying sporadically on word-of-mouth, your buddies, customer referrals, or cold-calling target accounts is no way to build or grow an agency. Because of how people make buying decisions today (YOU ALREADY KNOW THIS), marketing your agency MUST be job 1. Somebody at your agency needs to own marketing. CMO, marketing manager — give her whatever title you want — just make sure she’s devoted full-time to the care-and-feeding of your agency’s marketing, and nothing else. Do it or watch your agency hemorrhage for no good reason.

Mistake #8: Playing It Safe

We like doing what we’re good at. It doesn’t require a lot of effort or thought. You’ve got everything tweaked finely and the margins are good.

But how often have clients come to their agency and said something like, “Our competition is starting to do X. We’ve done some research and want to try X out and see what results we get. If it works, we’ll do more.” Agency is caught off guard and tries to dissuade the client. Client is adamant. They want what they want so they go find some other agency to do it. Eventually they let the first agency go because they’re getting more value from the new agency.

This has happened to lots of agencies, and will keep happening to those that don’t stay ahead of the trends and changes in marketing and marketing technologies. There are lots of strategies you can embrace to meet your client’s needs. You can hire an expert to work on this client with you. You can partner / subcontract with another agency or refer your client to them. You can bite the bullet and dive-in and become an expert and deliver the service yourself.

Staying in your comfort zone is just another slow death.

Mistake #9: Making Promises Your Agency Can’t Keep

When closing a new client often promises are made in the excitement of the moment. The agency blithely assumes it can make good on them, but more often than not it’s a disaster. Meanwhile, the client has carved these promises on his iPad’s titanium case. Enter the danger zone.

Don’t keep those promises and trust immediately erodes.

Keep those promises and the agency may lose its shirt and/or not deliver at the level the client expects.

Either way, the agency’s reputation suffers. You don’t need that headache.

Setting and managing client expectations is everybody’s job at the agency. Make sure everyone knows it, knows how to do it, and how to fix it should it ever happen again.

Mistake #10: Poorly Balanced Client Portfolio

The most profitable agencies have a diversified client portfolio. They don’t allow any client to be more than 10% of their revenues. They also usually have clients in different, unrelated industries. This way, if one industry takes a downturn causing those clients to cut budgets, the other industries, which are healthy, offset the cuts. Smaller agencies really struggle with this because it’s very hard to do when you first start out. The sooner you can balance your portfolio, the steadier your revenue stream can become.

Surprise Yourself

You may be making some of these mistakes. You may also be making others – we sure haven’t captured them all here (it would take volumes). The hardest part is identifying and accepting the mistakes in all their ugliness. The easy part is fixing them so they never happen again. Acknowledging these vulnerabilities takes courage. After all, who enjoys admitting we’ve screwed up? Fixing the root causes of the mistakes takes determination and a willingness to see things in a new light. And the amazing thing is, if you do that you just might surprise yourself. The agency has become fun again!


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