It's the beginning of a new year. And today, your agency feels shiny and new. You've renewed your resolution to conquer the world.
But come February or the close of Q1, you’ll settle into your previous bad habits, and the world won’t look so inviting. The same issues you had in December will reemerge, and you’ll be talking about the same challenges over and over again.
Don’t let this cycle of slipping into bad habits and a lack of intention happen to you.
We've grown Square 2 Marketing to $6 million in revenue, in addition to coaching more than 40 agency owners through their own inbound marketing agency transformation. Based on this, I've created a roadmap for inbound marketing agency growth, outlining the 11 stages that most agency owners need to manage their firms through.
These stages will help you to better align your goals to your current maturity level and ultimately, grow your agency to where you want it to be. Find out what growth stage your agency is in and what you need to do to get to the next level.
Stage 1: Making the Decision to Go "All In" on Inbound
If you’re not "all in" on inbound, growing an inbound agency is going to be challenging. I’m not judging. I know it’s hard to leave legacy clients and ways of completing work behind. I know the revenue pays the bills. But I’m stating facts. If you keep half your agency back to do project-based work, you’ll be challenged to grow your agency as an inbound shop. You have to make the decision to fully buy into the model and ideas behind becoming an inbound agency. It’s the first and most important step on your growth plan towards inbound success.
Stage 2: Creating the Strategy and Plan for Your Agency
Every business needs a strategy and plan -- even inbound marketing agencies. This means outlining your firm's targeting, messaging, differentiation, and the inbound marketing tactics required to get you to your revenue goals. You also need a sales plan. What does your sales experience look like? Who’s handling it? What are your accountabilities going to be this year? What about your teams? What are your goals? It would have been nice if on January 4 you had all this documented, but if you don’t, there’s still time. It’s an important exercise for an agency wanting to grow.
Stage 3: Building Your Inbound Marketing Experience
You have to practice what you preach. How are prospects going to understand inbound if you’re using cold calling to get new clients? How are they going to trust your story around inbound if you’re buying lists? They’re not. You need to build your agency’s inbound marketing experience, implement it, and optimize it. You have to get good at generating leads for your own business before you can help other businesses. Yes, this needs to be an experience. You literally have to “out experience” the other inbound agencies to get a prospect’s attention.
Stage 4: Building Your Inbound Sales Experience
This experience doesn’t stop once a prospect fills out a form on your website. Now you have to kick in the sales experience. If you don’t have a documented, mapped out inbound sales process for your agency, this is your next step toward growing your inbound agency. While all of these stages are important, this one is critical. If your sales process isn’t designed to make your prospect trust and like your team, you're going to have a difficult time signing new clients and driving new revenue for the agency.
Stage 5: Developing Your Product or Services Catalog
Inbound agencies work differently than traditional creative agencies. Inbound agencies do a lot of "rinse and repeat." Thinking about your agency like this means you need a product or services catalog, which is a listing of everything you do at your agency along with how much it costs you to do it and how much you want to charge clients for these services. Since we know that time and materials don’t fairly represent how much we should be charging, having a product catalog allows you to value engineer your service fees and standardize these across your agency.
Then, when you need an estimate for a client or prospect, simply refer to the product catalog, customize the client's program, and provide the retainer estimate -- it's simple, structured, controlled, and most important, highly profitable.
Stage 6: Planning Your Inbound Team
This is one of the more challenging growth stages for inbound agencies. There are very few inbound agency models and even less resources to help you know what an inbound agency team structure should look like. Still, you need to plan for hiring growth. What roles do you need? How many people do you need to take care of a client? How do you get production resources as close to the client as possible? How do you create a team that you can afford? These are all questions you need to answer.
Try to put roles together that allow people to do their best work. When you ask someone to be a generalist, they typically do a lot of things in an average way. When you ask someone to be a specialist, they typically do a few things really well. Let writers write and consultants consult. Let designers design and project managers manage. You can start with a small team of specialists, and as you bring on more clients, let these specialists break off and build out their own teams of specialists. This is the best way to keep control of your costs as your company grows.
Stage 7: Thinking Through Agency Financials
If you’re not making money, you’re in trouble. So you need to have a handle on profitability. Typically inbound agencies should be between 10% and 20% in net profit. There are some that are higher and some that are lower. This is reliant on your plan for growth. If you’re investing back in the business and over-hiring to handle client load, you might be less profitable by design.
Also, you might be less profitable earlier on in your growth journey. As you get smarter about servicing clients and delivering projects, you’ll realize efficiencies that can be designed into your processes. But you need to know your financial metrics, such as billable rates for team members, average revenue per team, revenue capacity per team, average monthly recurring revenue per client, etc. Monitoring these numbers monthly helps you see if you’re growing or declining.
Stage 8: Installing Systems, Processes, and Tools
Inbound agencies do many of the same exercises daily, weekly, and monthly (build a landing page and thank you page, write a blog post, set up an email workflow, etc.), so our agencies are perfect for systems, processes, and tools that make the efforts more efficient and more profitable. But software and tools alone don't provide efficiencies. If your process is poor and you apply technology to that poor process, you’re going to be disappointed. Start with auditing and looking for weaknesses in your own internal processes. Map out the steps in your projects. Do things manually at first until you get them to a point where you see good results. Then, look to automate for efficiency.
By applying tools and systems to your existing methodologies, you will realize the improvements in time spent per activity. But don't stop there. On a regular basis, evaluate your existing workflows. Even a small adjustment can make a big difference. We found over-servicing to be a major issue: Most inbound agencies are so results-focused that they often do whatever it takes to generate leads for a client. This is good for client satisfaction but bad for profitability. You need controls on the scope of your retainers as well.
Stage 9: Creating a Culture of Continuous Improvement
I’ve written about culture and core values a lot, and they are critical, but they are even more important for an inbound agency because we’re doing the same thing over and over again. Your entire team needs to realize this and be constantly on the hunt for ways to improve what they’re doing. This has to be baked into the culture at your agency. You have to constantly reinforce how important this is. Once your team is thinking like this, you’ll start to see them recommended adjustments to what you do and how you do it in a way that impacts almost every aspect of your business.
The results are happier clients and more profitable inbound agencies -- two very positive outcomes.
Stage 10: Using Metrics to Drive Client Satisfaction
If you don’t already know this, your inbound marketing clients only care about one thing: leads. If you get them leads, they love you; if you don’t, you’re probably going to get fired. This has to be one of the top metrics you’re using to prove value and the success of the inbound program. However, there are other metrics that are also important to the success of your efforts.
Create a collection of these metrics, and make sure they are prominent in your regular communication with clients. I’d suggest -- at the minimum -- a monthly review of the program metrics. You can consider website traffic, conversion rate (site wide and page specific), content shares, social media audience increases, keyword rankings, and blog stats as important metrics to track and report on.
Stage 11: Executing Inbound Engagements to Generate Leads and Revenue
Make sure there’s a direct connection to the client’s business results, too. I’ve had too many clients fire us because they didn’t close any of the thousands of leads we generated for them even though we were never engaged to help them close the leads. Make sure you and your client are on the same page with regard to what defines success of your program.
In the end, if the client's business is growing and you’re contributing with leads and revenue, it’s very likely that you’ll be working with that CEO or CMO for many years to come. And there's more good news: Clients who stay with you into year two are more likely to stay with you into year three and four because year two is usually exponentially better than year one. Get them results, and they’ll be with you for a very long time.
Once you move from deciding to go "all in" to getting your clients results, you’ll know you've made it. You’ve created your inbound marketing agency, and it’s growing faster than you could have planned for. Give yourself a pat on the back and remember how far you've come.
Originally published Jan 20, 2016 9:00:00 AM, updated January 21 2016