6 Reasons Why Your Agency Isn't Growing

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Jami Oetting
Jami Oetting



To quote Advertising Age: "It's a good time to be in the agency game." Ad agency revenue is up, especially for those agencies focusing on digital services.

The industry is growing. Is your agency growing with it?

If your agency is stagnating or contracting, you can probably identify a few operational or strategic mistakes to correct. Yet these mistakes often cover up larger, fundamental errors.

If your agency doesn't recognize and remedy fundamentals, any changes around the edges aren't going to cut it.

6 Reasons Why Your Agency Isn’t Growing

1) Focussing on Revenue, not Profitability 

Revenue is important. You have bills to pay. Employees to pay. But focusing on revenue to the exclusion of whether your agency is actually profitable pulls you in some bad directions.

Here's a typical scenario: You want money coming in. The agency says "yes" to anyone who's good for the money. Now your team is stretched thin. No client is getting your best efforts. As a result, your agency suffers from high rates of client and employee churn. Making you anxious to find more clients. So you say "yes" to anyone who's good for the money.

You see the cycle here.

Instead, clarify what types of clients and work can provide revenue and profit. Understand metrics like the lifetime value of each client and your agency's cost to acquire a client. Find out which client accounts are costing you time and resources that can't be invested in your growth.

2) Business Development Responds to Every Enquiry

Your business development team is wasting time and agency creative resources by responding to all enquiries. Not everyone is a good fit for your agency. How well developed is your client screening process? Refine it to better channel where your agency invests its client acquisition resources.

This doesn't mean ignore enquiries by companies who aren't a good fit. That's just rude.

When you see they're not a good fit, let them know you're not the right agency for them. If you can make some connections for them with a few agencies that are better suited, even better. You never know who they know (the world is a very small place), so keep them feeling positive about your agency. This is what leads to future referrals

3) Account Manager Culture is About Project Management, not Growth

Account managers have a tough job, no doubt. But they must wear different hats well. How does your agency hold account managers accountable? Are they primarily, or only, judged on their ability to drive deadlines, timely and accurate reporting, and achieving campaign goals?

Your account managers are your best eyes and ears into a client's business and needs. They should be able to pinpoint where your opportunities to grow the account are. Don't consider it a valuable extra if an account manager is pro-active about getting more budget from a client or being able to ripen them for a retainer agreement. Leading, rather than managing, clients is necessary for the job.

If this isn't the culture yet for your account managers, start including growth metrics in their performance reviews and bonuses.

4) You Don't Take your Own Medicine

 How well do you market your agency? Do you have clear marketing goals and strategies for your agency? Treat your business development team like a client. You don't get to push the work slated to be done for them aside for a more important client. Well, you can -- but not if you want to grow.

5) There's a Lack of Structure and Process

Lack of structure results in myriad direct costs, as well opportunity costs. You might see it in pop up at your firm in different ways.

For example, you don't use a time tracking system. And I mean really use it. Not just have it installed. You don't really know how much time different tasks and campaigns take. Now you suffer cost overrides and have to discount invoices. Maybe you're doing work that gets lost in the shuffle and never gets billed at all.

Maybe your lack of structure shows up in inconsistent quality of work. You aren't using templates, effective collaboration tools, or outlined workflows to get work done. As a result, steps get overlooked. Corners are cut to meet deadlines. Work suffers. Clients leave.

6) Agencies Can't Grow if Their Creatives Aren't Growing

Your agency can only offer services where your employees have expertise. If you aren't growing the skills of your employees, the scope of services your agency can provide will get smaller.

This doesn't mean every agency has to be expert in every new digital marketing method, or that every employee needs to be a jack-of-all-trades. But the tools, tactics, and quirks of digital marketing are constantly changing.

Provide support and opportunities for your employees and stable of freelancers to grow their skills. You'll limit your churn and have a constantly renewable resource of creativity.

Opportunity Is Out There

Need some quick wins? Here are five ways you can grow your agency before you have a formal plan.

You don't need to be the largest agency to be the agency you want to be. But you do need to grow in areas that fit your agency's profile and goals. Otherwise you're never create the agency you want.


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