When it comes to the topic of revenue growth, most agencies will converge on one strategy: new business.
Why wouldn’t they? It’s the most obvious solution.
More accounts = more revenue.
It’s an unarguable fact.
Although, with new business comes fresh responsibilities, and you may need to invest time researching an entirely new market before you can start focusing on your client’s goals. Usually, new clients need onboarding and guidance, and this can take a significant amount of time.
To accommodate for this time your options are clear. You can either, divert your attention from the clients you’re already serving or add new people to your team.
The latter serving only to double the same issues you’re already facing by bringing in the new business.
Don’t get me wrong. New business is the driving force behind many incredible agencies. And scaling new business whilst maintaining the quality of your agency is a skill that must be fulfilled if you want to survive in this saturated market.
Luckily, there’s an alternative approach you can use to grow your revenues.
Instead of overlooking those valued clients who you’ve served for so long, it means you pay more attention to them. It means giving them MORE value. It means your revenues can scale far faster than your operational expenses. It means you don’t have to waste your time on pitching and meetings that go nowhere with people who were never going to buy anyway.
The Power of Account Expansion
It’s no secret that finding new customers costs more than keeping existing ones.
You’d be surprised at how few agency owners invest in learning how to grow their existing account revenues.
They wrongly feel the only way to grow their agency is to take on new clients.
One blessing we have at Ruler Analytics is that, due to the nature of our product, it helps people prove the real business value they’re driving.
We’re lucky, as we have the ability to speak to incredibly gifted minds in the area of digital marketing on a daily basis. And those minds sing the same song. Account expansions are as important to grow revenues as a new business.
Joshua Ballard, the founder of Paradox Marketing, believes it’s not only possible to increase agency revenue with account expansion, but it’s also “considerably easier than bringing in new clients.”
Other agency founders, owners, and leaders agree. We talked to different agency influencers to get their perspectives on how to grow a digital marketing agency by retaining existing clients and growing those accounts.
Here’s what we learned.
Specialise on What You’re Good at, and Form Partnerships to Expand Services
One thing is for sure: don’t expect any shortcuts.
Ed Leake, the founder of Midas Media, says that there’s “no clever growth hack” when it comes to retaining clients. His advice is straightforward and important: “It boils down to being great at one thing and really delivering on it.”
“Being great” is often an accumulation of lots of factors.
Michael Winniczuk, founder of Media Octopus helps us outline what lessons you need to learn to be great. Retaining accounts isn’t about quick tactics, it’s about following the right lessons.
Those two lessons are:
- “surround yourself with brilliant people”
- “find out what you are good at and stick to it.”
Winnczuk’s sentiments are echoed in the thoughts of Ed Leake.
Midas Media is a PPC agency that specialises in Ads.
Leake says it’s sometimes tempting to offer related services like SEO or web development, but he’s found in his seven years of running an agency that it’s better to “stick to what you know and do that supremely well.”
If you need to offer services outside of your speciality, Leake says to “find a reliable partner or two who compliment your offerings.”
By partnering with other agencies who offer complimentary, but not competitive services, you can focus on your own specialisation but still provide clients with the add-on services they need.
Leake isn’t alone in his praise of partnerships.
Joshua Ballard of Paradox Marketing agrees that it’s not only a good solution to expand your service offering, but “it’s also a good way to find new clients passively.”
Paradox Marketing was initially focused on search marketing, and Ballard had no personnel, or interest, in social media marketing. So he partnered with another agency that specialised in social media marketing, but that had no interest in search marketing.
The partnership allowed him to make more money by offering his existing clients a new service, and it also helped him avoid having to become an expert in social media marketing.
It also came with another big benefit, when the social media agencies he worked with had clients with search marketing needs, they sent those clients to Paradox.
Is Specialisation Always Right?
It was amazing to analyse our research and see the same answers again and again, but not everyone agreed that specialisation was a catchall solution for account expansion.
Some people believe that specialisation is a strategy that works best at both ends of the budget spectrum. For Tom Jacobs, head of advertising at Distract, deciding whether or not to specialise depends on the size of the accounts you’re targeting. “Niche agencies are ideal for very small and very big budgets, but the middle ground requires a more full-service offering.”
When Distract first started, the agency was focused on social media. All of the agency’s content revolved around social media marketing, and when they gave talks and presentations, they spoke about social media. Eventually, they became known as the go-to social media agency.
Digital Marketing Campaign of the Year 2017: Distract for “Share the Love”
Although, because they were targeting mid-level accounts, Jacobs knew they eventually needed to expand their service offerings. “After we’d built a pool of social media clients, we started a Google Ads niche agency and cross-sold those services backwards and forwards. We then started a web design agency and cross-sold those services too.”
By including additional services, Distract more than doubled their average client value. Interestingly, though, the additional offerings were built as separate, specialised agencies, so the point of specialisation still stands.
It seems that most agency owners agree: the best way to retain clients is to excel in a single service. But if you want to grow existing accounts, need to expand and offer additional services, you have two options: either partner with agencies that specialise in the services you need to offer, or start new agencies that specialise in the additional services you’re looking to provide.
One final approach is to offer microservices: services that clients need but don’t really require a lot of time or specialised knowledge. That’s what Patrick Coombe, director at Elite Strategies, did to grow his accounts: “A few years ago we took a crack at website hosting, and now we have 100 clients deep.”
Take The Time to Speak To And Understand Your Customers
Eric Murphy, the founder of BabelQuest, says that one of the biggest problems with offering lots of services and trying to upsell clients is that it encourages companies to “take an Amazon approach, because you bought that, you should also buy this.” He says this doesn’t work because “it’s about what you want—not about the client and what they need.”
Chris Martin, head of marketing at CommonTime, agrees: “In terms of expanding existing accounts, the worst thing an agency can do is try to sell to them. Constantly pushing sales and marketing messages to these clients is the quickest way to lose them.”
Instead of cross-selling or upselling for the benefit of growing agency profits, Murphy advocates for going “back to the start and finding out from the client what their biggest problem is now.” If you’ve done your job well, the biggest problem after working with your agency for a while should be different from what it was in the beginning.
To get this type of feedback, Joshua Daniels, founder of Go Amplify, advocates for using Google Forms or Survey Monkey to survey clients and “ask questions on what they like most about your agency, and what could be improved.”
This can help you identify new problems the client is encountering as Murphy suggests—which will help you identify opportunities to help clients with add-on services. It also helps you refine your processes, have better communications with clients, find the best services to offer, and, ultimately, grow revenue.
“Never underestimate the power of client feedback,” Daniels says. “It can shed light on areas of weakness within your agency that need strengthening in order to grow and retain clients over long periods of time.”
One way to get this feedback is regular monthly review calls. This will allow you to “discuss current project progress, but also explore potential upcoming projects or other areas of the business which could benefit from agency services” a tip shared by Chris Martin.
In the end, to get the type of feedback you need to grow existing clients, you must have a great relationship with each client on your roster.
As Rob Weatherhead, digital consultant at Agent Wolf, says: “There is no point trying to grow an agency if you don’t have strong foundations in the first place. You will just lose a client each time you win one.”
To build those relationships, Weatherhead says you have to be more than just an advertising provider. You need to “ingrain yourself in their business and ensure you are integral to their future strategy. You have to understand their customers, their business model, and how you can have a tangible impact on their behalf. Once you do this you become a partner, not just a supplier.”
Do the Math to Find the Best Approach for Your Agency
As a software-as-a-service business, one of the greatest advantages we have is that it’s extremely easy to build a quantitative model for our company. This model allows us to forecast growth and evaluate investments into sales and marketing with ease.
When we first started, terms like customer lifetime value, average contract value, and expansion value were all alien to us, but it didn’t take us long to learn the language of subscription companies and create a spreadsheet to take advantage of this characteristic.
But here’s the thing – it’s the same business model as an agency.
Most agencies sell their services on a retainer with monthly billing – just like a SaaS business. Meaning all of the models we’ve created are just as useful to you as they are to us.
As an agency, you don’t have to be dependent on a constant cycle of finding new clients to grow your business and revenue. As Go Amplify’s Joshua Daniels says: “Growing and retaining existing clients is the lifeblood of any digital agency.”
Before putting these suggestions into practice, it’s important to make sure you do the math and determine if it’s the right approach. Every agency is different, and what works for one may not work for another.
Paradox Marketing’s Joshua Ballard says the starting point is collecting three key pieces of data: your cost-per-acquisition (CPA), the length of your sales cycle, and the lifetime value (LTV) of each new customer.
“If you have these three core pieces of data you will always be able to generate a report and prediction outlining how increased spend will pay for itself.”
Once you can understand that revenue generation depends on more than just new business, you can open up a Pandora’s box of ideas to grow your agency that few others will even explore.
Prove Your Value to Grow Your Bottom Line with Existing Accounts
If there was one resounding piece of practical advice that the majority of the people questioned in our research suggested, it was that proving your value is the most vital tactic any agency can focus on to help with account expansion.
Rikki Lear, director at Digital 22 Online, says that the best thing an agency can do is a good job:
“Being able to say, and prove, that you are doing a good job is vital.”
Not only does that keep your clients happy, it directly impacts your bottom line.“With great work comes retention, growing with your clients, referrals/recommendations, case studies, awards, and reputation for the right reasons. So focus on delivering outstanding results/value first and foremost.” Kevin Gibbons, managing director at BlueGlass told us.
Chris Hodgson, Flaunt Digital says, using data to prove the value you’re delivering is “a tried and tested model” that will help you “supercharge strategy and revenue growth over time.”
But the thing we liked the most about this piece of advice: it’s practical. It’s actionable. There’s nothing abstract or too-broad-to-grasp about how to achieve this. For Oliver Gaywood, founder of Civic Web Media, there are three things that you should start doing right now:
“meeting requirements, beating deadlines, and building up relationships with clients.”
There’s a reason why certain pieces of advice seem to stand the test of time. Go Amplify’s Joshua Daniels agrees: “We under-promise and over-deliver on our campaigns, always act with integrity, and never miss deadlines.”
But doing a good job is only the first step. Often, the more important thing is proving to clients that you’re doing a good job. Daniels says, “proving your value means setting “SMART, tangible goals, measuring them, and reporting on progress regularly.”
To prove that you’re doing a good job, you need a system for measuring ROI. As Agent Wolf’s Rob Weatherhead says: “Very rarely will a client say no to something if it makes them more money!”
If you aren’t measuring the right metrics and using those to prove your value, you’re failing to take advantage of one of the greatest benefits of being a digital agency. As Lear says: “The main advantage you have as a digital agency over traditional agencies is your ability to track and prove effectiveness. If you aren’t tracking EVERYTHING, you are missing out.”
Note: Chances are, you aren’t getting the full credit you deserve for the campaigns you’re running. Ruler Analytics helps agencies prove exactly how much business value they’re delivering to their clients.
Lear says that many agencies miss opportunities by only tracking basic metrics like sessions, contact form submissions, and sales. But clients are becoming more confident as analytics evolve. You need to take it a step further to track calls and measure assisted conversions, and ultimately, revenue.
In this podcast, Rikki Lear and his team discuss why sales and marketing must be aligned for the best results.
Doing a great job is the first step, tracking the right data to use in proving you’re doing a great job is the second step, and sending the proof to the right people is the third.
Weatherhead says, that you need to “understand how your data feeds into clients’ internal reporting, who it goes to, who makes the decisions, and what they focus on.”
Once you’re tracking the right data and know who needs to see it, Cathal Saunders, operations director at Converted, says to provide clients with regular reports:
“Don’t expect a client to see opportunities for growth or improvement. Tell them. They’re busy, and you get paid to show them where they can improve their performance/revenue/offering. Regular reporting is an ideal way to highlight opportunities. Start there, as it’s a natural place to discuss options.”