5 Reasons Why You Should Transform Your Marketing Agency—NOW!

Pete Caputa
Pete Caputa



transform your marketing agency This blog post is part of HubSpot's  Marketing Transformation Week , April 4-8, 2011. 

At the end of 2010, HubSpot surveyed approximately 3,000 marketing agencies and consultants about the financial health of their businesses, as they registered for our free  inbound marketing training series designed exclusively for agencies.

What we found was not encouraging—variable cash flow, lack of new leads, difficulty signing new clients, and few (if any) sources of recurring revenue.

If that's not a wake-up call for transformation, what is?

Here are the five critical reasons marketing agencies must transform now , based on our recent survey:

1. Agencies need recurring revenue. 
Most agencies generate less than 25% of their revenue from retainer clients. Many agencies have no retainer clients. 

2. Agencies need larger retainers.
The vast majority of retainer-based clients generate <$1000 or revenue per month. A surprisingly large number of agencies are signing retainers of <$500/month.

3. Project-work is typically low-yield and high-churn.
Most of the agencies and consultants that participated in our survey generate their revenue from project work. And the average project size? Less than $5,000—with many agencies accepting average projects for less than $1,000.

4. New business cycles can be long—and painful.
Our data show that most marketing agencies acquire fewer than two new clients per month —and that may in fact be a rather generous estimate. 

5. Lead-generation is a BIG ongoing challenge.
When we asked agencies what their biggest business challenge was, we got a mix of answers, from "Difficulty keeping up with technology" to any and all of the challenges listed above.

But the BIGGEST challenge of all? Generating new leads—a problem that can and should be addressed with a few small but critical changes to your agency's overall marketing strategy.

How to Transform Your Marketing Agency

Ben Franklin once said that the definition of insanity was "doing the same thing over and over and expecting different results." We couldn't agree more.

It's time for real transformation —and we've got a handful of tips to help you get started!
  1. Stop writing pitches and proposals.
    Find the business challenges that your clients will pay to fix. Develop marketing and sales programs that will help them fix them.
  2. Stop pushing tactics.
    Yes... social media is the shiny new toy every potential client is asking for. But most businesses will have a really hard time generating ROI from social media alone. Deliver the right services at the right time for the right client.
  3. Stop selling projects.
    Switch to the retainer model. It's better for your business, because you'll have reliable income. It's better for your client, because you'll be required to deliver ongoing value to them, so they can justify paying you. 
  4. Create (or borrow) a marketing services delivery process , so that you're not reinventing the wheel for every client. While creativity is still key to successful marketing campaigns, processes are key to reliably improving results over time.

Want more tips and ideas on how to transform your agency? Join us for us a special episode of HubSpot.TV on Wednesday, April 6, 2011, at 12pm EST. Learn, win, transform! >


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