In late 2003, David Gilroy and his two partners left their jobs at Sift – another UK web design agency – to launch Conscious Solutions. They were joined in 2004 by former colleagues Andrew Gray and Kevin Glass as founders.
Instead of providing a diverse array of services to companies in a variety of sectors like Sift, Conscious was going to focus on a single service for a specific sector: building websites for law firms.
Making the decision early on to focus on a niche has been the foundation of Conscious’ success.
Today, Conscious Solutions works with 300 law firms, enjoys an 89% client retention rate, and is set to turn over £2 million in revenue in 2017. And while they’ve grown into a full-service digital agency, they still only work with businesses in the legal sector.
According to Gilroy, focusing on a niche provides Conscious with a strong marketing advantage, a simpler path to growing awareness and trust, and a sound future exit strategy.
This story outlines Conscious’ rise: how they got started, why they made the decision to focus on the legal sector, how that decision has contributed to their current success, plus valuable hints on how to start a marketing agency of your own.
Setting Up a Niche Digital Marketing Agency
David Gilroy is the Director of Stuff & Things (aka Sales & Marketing) at Conscious Solutions – a UK-based digital marketing agency.
He launched the business back in 2003 with two partners, who were also former colleagues at his previous business, Sift.
Unlike many competing agencies, David and his partners chose to forego the “spray and pray” method of finding new clients. Instead, they made the decision to focus on the legal sector before launching their agency.
The idea came from one of the divisions at Sift – Practice Web – that focused on websites for accountancy firms.
Gilroy and his partners liked the idea of focusing on a niche, and after conducting some research, landed on legal as the ideal sector.
There was only one firm with a similar approach and its market was in the United States.
It provided Conscious with a model to work from, and the lack of similar services in the UK suggested that there was a strong market need.
“We did research in other sectors and didn’t feel like they were ready or the right size. In a sector like restaurants and hospitality, they wouldn’t necessarily value the internet (back in 2003 remember),” Gilroy says.
Gilroy believes their early decision to focus on the legal sector provides three major benefits:
A specific focus makes it easier to build awareness and gain trust. When a law firm is looking for help with its website or marketing initiatives, ‘we do the legal sector’ is a much more compelling statement that ‘we’re a jack of all trades’. Because Conscious is focused on the legal sector, it’s easier for clients to trust that they know the industry, and it’s simpler to attract attention when prospects are conducting early research into their options.
Focusing on a niche leads to an instant value proposition. Gilroy believes that Conscious’ focus on the legal sector is a strong element for their marketing. “If someone says they do law, but also recruitment and some other professional services, it’s a lot easier decision to choose Conscious because that’s all we do, legal.”
A specific focus lays the groundwork for an exit strategy. Most business owners start businesses with the intention of selling them if the right offer comes along. Gilroy believes their focus could make them more appealing to potential buyers. “If a firm with an interest in the legal sector was looking for an agency to buy, we believe we would be the most attractive.”
For individuals new to the market, who are searching for guidance on how to start a marketing agency of their own, Gilroy recommends the following:
- Do your research first. Find the right niche to focus on, make sure the market isn’t over-saturated with competitors, and ensure there’s demand in that niche for the services you plan to provide.
- Think about scale before making a decision. While an industry may look promising at a glance, you need to consider its potential beyond finding initial clients. To acquire enough clients to build the size of your business, there must be a long-term market.
- Make sure you have the appetite and skill set to succeed in the niche you choose. People who do startups can’t necessarily manage a full-grown business. Growing a business of that size takes many years and fierce dedication to your niche. Choose something you’re good at or something you really want to become good at.
Growing a Startup Marketing Agency
Gilroy and his partners started Conscious Solutions with £80,000.
Over the next few years, they took out a couple of additional small loans of £50,000 (under the then Small Firms Loan Guarantee Scheme).
It took a few years for the business to become profitable, but because the company works on a retainer model, their revenue built up exponentially over time.
In 2016, Conscious achieved more than 10% revenue growth, and Gilroy expects the company to turn over £2 million in revenue this year.
Conscious was able to make it through those first few unprofitable years because they had a long-term plan to work towards.
“There’s a big difference between what you might do in the first year or two and what you would say no to three or four years later.
Occasionally friends, family, and other people will come along and say, ‘would you design a website for a medical device and I will pay you a few thousand pounds?’
You say yes if you need a few thousand pounds. But in the long term, you have to make sure you’ve got a robust cash flow plan and model.”
Initially, it’s fine to take on projects outside of your niche, as well as short-term, one-time-payment projects.
Do what’s necessary to ensure there’s enough money to keep the business running. But all decisions must be made with long-term goals in mind.
If your long-term goal is to specialise in a niche, your primary goal should always be building your client base within that niche.
While one-off projects may bring in needed cash initially, you’ll ultimately need to grow your business with clients that are willing to hire you on retainer.
Retainers are a subscription payment model where clients pay a flat rate each month for a set amount of work. If you have ten clients on £1,000 per month retainers, you know you’ll bring in £120,000 for the year.
By knowing what you can expect to bring in, you can make plans for hiring new people to help grow the business, and rest assured that you’ll have the money to pay those new employees.
If you work on a per-project basis however, you can’t anticipate how much you’ll make for a given year – it’s dependent on how many projects you pick up. This makes it difficult to develop a growth strategy, and it puts your staff in risky positions.
To get through the first few years of operating a new agency Gilroy offers the following advice:
Take time to develop a long-term strategy early on, and use that strategy to make decisions along the way. Conscious lost money for the first few years, but the loss was deliberate, it was designed to help the company build client subscriptions. Those subscriptions eventually led to the company’s profitability because the retainer revenues built up exponentially.
Diversify your revenues. If Conscious was to lose its biggest client, it would only result in a loss of about 3% of their revenue. If you have a large client base rather than one or two major clients, you don’t have to worry about where revenue, including both profits and employee salaries, will come from, so you can enjoy more success and be a more responsible employer.
Finding the Right Clients for Your Marketing Firm
One of Conscious’ mantras is DDWT: “Don’t deal with tossers.”
Gilroy’s advice: “The one thing I look for, is clients who are going to listen. It’s really important that we work with people who want to work with us. Otherwise, you get too deep into a relationship that’s no good for either person.”
Working with clients who have professional personalities that are compatible with yours is crucial. Agencies should take the time upfront to analyse their compatibility with prospects by asking the right questions. Another conscious mantra: “The quality of your questions defines the quality of your income.”
Beyond compatibility, Gilroy looks to three aspects to qualify prospects (useful takeaway if you’re seeking information on how to start a marketing agency of your own):
Do they have a need right now that Conscious can fill?
Do they have some budget to allow Conscious to help them fill that need?
What is their level of sophistication in terms of online marketing?
According to Gilroy, “In the ideal world, a sweet spot of clients is where they have some kind of professional marketing person on staff.”
This allows Conscious to work with the client for improved digital marketing initiatives, but it also allows for consulting – providing advice and letting the internal marketing team run with suggestions.
Forming a Successful Approach to Working with New Clients
Now a full-service agency, Conscious offers a variety of services: branding, websites, SEO, PPC, email, content, social media, analytics, and even print marketing.
However, they don’t recommend all of these services to clients up front.
They recommend the services a company needs by considering what existing resources are available.
For clients who wish to launch a new law firm, it’s likely that they only have a limited amount of budget to spend. In this circumstance, David would recommend that the client focuses on building an email list.
That list could contain friends, network connections, and people that the client has worked with before, anyone who might refer to work.
He would also recommend that the client gets familiar with the new GDPR rules that are coming in May of 2018.
Once the client has more marketing budget to play with, he’d recommend pay-per-click (PPC).
Only when these other initiatives have been mastered, he’d recommend that the client develops a search engine optimisation (SEO) strategy.
He would consider the client needs first, and the client’s resources second.
Finally, he would make service recommendations based on the specific needs and resources uncovered in the first two steps.
In sales and marketing, there’s always some pressure to focus on revenue, but solid agency businesses are built with strong client relationships.
Develop lasting and trusting partnerships by getting to know what clients need, recommending services that will enable them to meet their goals, and building retainers over time rather than trying to cram everything in up front.
Delighting Clients with Exceptional Service
Conscious is well-known as a pioneer in its use of technology to provide extra value to clients.
With technology, Conscious has not only been able to improve client campaigns but also to definitively prove the value of its services. This has led to improved client retention.
In 2016, Conscious’ client retention rate was an impressive 89%.
Gilroy’s elevator statement for Conscious is simple: “We help law firms make more money from their websites.” It’s this simple goal that enables Conscious to delight clients with exceptional service.
“We’re always looking at tools that help us improve our operations as a business. But it’s also part of our service to clients. It’s our job to find third-party products, tools, and services. We evaluate them on behalf of all of our clients.
We have over 300 law firms who actively pay us money, and part of that agreement is to save them time by finding things that they can’t, and frankly shouldn’t, be finding for themselves.”
By testing different technologies on behalf of its clients, Conscious is able to recommend new tools with confidence, knowing that the recommended technologies will provide value.
As a bonus, these technologies help Conscious with client retention. Clients ultimately become reliant on recommended technologies, and since they view Conscious as the experts at taking advantage of those systems, they’re less likely to be willing to abandon the relationship.
How to Start a Marketing Agency: What We Learned from David Gilroy
In our conversation with David, we gained several pieces of insight that are brilliant for both individuals who are looking for tips on how to start a marketing agency, and those who have been running an agency for a number of years:
- Choosing a niche creates a distinct value. We included a few of Conscious’ customer testimonials here, but if you watch through the entire YouTube playlist, there’s a consistent theme: a deciding factor for many of its customers is that they specialise in the legal sector. Find a niche and make sure it’s the right niche, to gain instant trust and authority.
- Take time to get to know your clients and their needs. By asking the right questions up front, you can ensure the client relationship will be advantageous for both parties. Additionally, you can ensure the services you offer will meet clients’ major goals, increasing retention.
- Get to know new technologies, and recommend them to your clients. As an agency, it’s your job to recommend tools and software that streamline workflows, highlight opportunities, and prove successes. Not only will clients be grateful, but they’ll also be more likely to remain, clients, because they’ll view you as an expert on the tools they’ve grown dependent on
Conscious enjoys millions in annual revenue, hundreds of clients, and high retention rates – and they’ve been going strong for more than a decade.
If you’re an individual, who is searching for actionable ways on how to start a marketing agency of your own. Gilroy’s advice merits serious consideration.