It’s the rally cry of new business professionals: more, more, and more clients.
But as you know, more isn’t always better.
When Jeremy King joined Element Three as the vice president of revenue, he was joining an agency that has a strong salesperson who is also the founder and president. This is unusual in the agency business: Most owners are more skilled in the marketing or creative side as that expertise is the driver of going out on their own. King and founder Tiffany Sauder -- forces combined -- “broke the agency,” as King called it. They sold a ton of smaller retainers to all types of clients.
This approach wasn’t healthy for the agency. Things started to slip and fall apart. Staff was split between working too many different accounts, and they joked that King needed to stop selling.
King took a pause and has spent the past year focused on growing the size of the agency's client engagements and retainers, leading to the agency’s average client size increasing by 391%.
This shift was intentional, and it led to a more predictable, scalable agency. Here’s how the team at Element Three approached quadrupling its average account size.
1) Know Yourself
This goes back to positioning your agency to differentiate it in the market. Take at look at what you are good at, what you truly enjoy doing, and what your most profitable clients look like. Know your strengths and your weakness -- understanding both are important. Highlight your strengths, and go after clients that need this specific expertise.
Element Three determined that while they were skilled in inbound marketing, where the agency really excelled was in branding and strategy projects. They hired an executive creative director to build out a robust creative team that could compete on the same level as the top design firms but would also have the marketing knowledge -- analytics, content, lead generation and nurturing -- that would give the firm an edge in competitive situations.
“I think a lot of it came down to us really understanding what we're good at and what we're not good at,” King said.
2) Measure Everything
You measure everything for your clients: visits, leads, MQLs, conversion rates, LTV, CAC, etc., but we rarely do this for our own agencies. King started this journey by measuring everything in the sales process, including organizing clients by industry, churn rate, ownership, size, average time to grow, spend, and growth rate. They did this by using a CRM to organize information and measure results.
King wanted the data to tell him what types of clients to bring on. It couldn’t just be about whom he “liked” or which clients brought “exciting” work to the table.
“Instead of focusing on closing clients who were willing to spend money, it was about getting deeper into the mindset of the organization -- understanding what they were trying to achieve and what they were willing to do to get results,” King said.
3) Profile Your Clients
Using the data from Element Three’s CRM, the team analyzed the agency's "best" clients: What verticals did they operate in? What industries or business types were similar to these? What was their yearly marketing spend? What did ownership look like? What has been their growth path and how aggressive are they? What was the overall size and revenue of the company?
But he took it a step beyond thinking about the services or type of clients that were the best fit. He wanted to know: How do these organizations think? How do they see marketing as a driver of business growth?
4) Stop Taking Orders
Most agencies don’t employ a person who has formal sales training, so oftentimes, when a prospect calls, the new business person ends up taking orders instead of leading the prospect through the sales process. When a prospect says, “Hey, I need a website!” The new business person responds by writing down the person’s wants, not needs.
“That's not sales,” King said. “If someone says I need to build a website, my first question is 'Why? Why do you want a new website? Selling is helping them make the right decision for their business, whether it's you or whether it's somebody else. Develop a process for that.”
Element Three also focused on positioning the firm as less of a "do-er." Execution has been commoditized. It's seen as less valuable, and it is easier to bring these duties in-house once the client realizes the value of blogging, social media, and campaign creation. The agency sells itself on the way it "thinks" and how it approaches problems, something that is a differentiator for both its image and price.
5) Just Say “No”
“For every client that we get, we probably turned down around six,” King said.
Too often, agencies ignore the signs that a client is “just not that into you.” Your agency puts hours of time into meeting and putting together a proposal, hoping that a signed contract will make it back your way.
“In the end, even if you get that account, you’ll likely have misaligned expectations,” King said.
You need to interrogate prospects to figure out how much they want your specific help and why.
The problem with “no” is that finding the right client to say “yes” to can take time. It requires patience and faith from agency leadership. Owners have to trust in the process, that this is the right direction. Wanting to pick up a smaller account -- one you know you can win -- can be irresistible when you are looking at a long column of zeros and negatives.
Originally published Jul 14, 2015 9:00:00 AM, updated February 01 2017