The greatest pain point for agency owners is finding new clients. This summary highlights the trends and key insights you need to boost agency growth in 2018.
Agency growth seems to be constrained by a lack of time, money, and quality staff. After surveying over 1,000 agencies from around the globe, the 2018 HubSpot Agency Growth Report highlights the core challenges facing owners today.
Lead generation is the greatest pain point, with 60% of agency owners finding it difficult to acquire new clients. Secondly, 43% said they needed more time to focus on administrative tasks such as new business investments, staffing plans, and onboarding. Finally, finding employees that ‘fit’ the company was the central issue for 35% of agencies.
While these factors are limiting, the report also suggests that growth is elusive because the infrastructure needed to support real expansion is lacking in most agencies.
Rather than spending more for a short-term payoff, it’s more rewarding to establish sustainable best practices. Paying due diligence to key internal processes – such as employee retention and positioning – will allow firms to cut costs and open new roads to growth.
This summary of the 2018 HubSpot Agency Growth Report will highlight 4 challenges agencies are facing and they can minimize headaches and maximize growth.
- Growth and marketing
- Marketing and positioning
- Pricing and flexibility
- Employee hiring and retention
Trend #1: Growth and Marketing
With generating leads top of mind, 55% of owners cited insufficient sales and marketing as their primary obstacle to growth. Without the budget for online and offline strategies, firms are falling short on the visibility needed to move forward.
As a result, 72% of agencies plan to invest in lead generation in the coming year.
Nearly 80% of agencies were confident in their ability to close already gathered leads, but only 60% of agencies were confident in their ability to generate new leads. This discrepancy speaks to how dependable agencies are at serving their clients, but how difficult it is to drum up new business.
Considering that referrals and personal networks accounted for 47% of all leads generated, this gap in confidence is no surprise. Word of mouth is not a scalable strategy, especially because referral leads that come this way are usually of a similar type and budget to those you've gathered previously.
A reliable marketing strategy would allow agencies to both enhance their presence and achieve more reliable streams of income.
Trend #2: Marketing and Positioning
For marketing to be effective, firms need to understand their value to clients. A full 24% of agencies confirmed that they needed to better differentiate themselves from the competition to achieve growth. This begs the question of how your agency is positioning itself.
Client research, behavioral data, and analytics should be used to get a sense of the clients’ needs. Equipped with these insights, you can craft a marketing strategy to deliver value to your audience. When an agency stays visible with a relevant and engaging blend of content, conversions will follow.
Effective positioning is an investment in better clients.
With your value evident to the target audience, you can set more aggressive pricing. This lets you be more selective regarding who you work with, which in turn lessens financial stress, opens greater avenues to growth, and saves time from dealing with clients that are a bad fit.
Trend #3: Pricing and Flexibility
As clients continue to eschew retainer work in favor of project-based payment, 78% of agencies customize their pricing model to each new client. With clients unwilling to commit but still expectant of an agency's dedication, charting for growth is a real challenge.
To increase the predictability of revenue, 43% of agencies reported using flexible pricing methods.
Alternative payment models, such as milestones or half up front, are being used to alleviate these strains.
To add more stability to the budget, 83% of agencies are customizing their service offerings to each client. Many are even expanding their services to include work that lends itself to a retainer, such as pay-per-click advertising or inbound marketing.
Trend #4: Employee Hiring and Retention
Good help – like good business – is hard to come by. Finding ‘good fit’ employees is the third largest pain point and 28% of respondents think a lack of necessary talent is their chief obstacle to growth. Creating better programs for hiring and retaining employees is a clear way to overcome these challenges.
Since agency margins continue to fall, owners find themselves unable to compete with industries that pay 30% more for similar work. It comes as no surprise that 70% of agencies have trouble finding the right talent for open positions.
Despite these hiring issues, 67% of agencies say that hiring more staff is the answer.
If hiring is a considered an employee program, retention is obviously being undervalued. Only 41% of agencies reported having a new-hire training program and 58% were lacking formal job descriptions or KPIs for each role.
Without set goals, staff come to work without a clear image of success, and quitting becomes much easier. Mapping career paths is a way to help employees feel like their moving forward. Internal processes like training and onboarding are equally critical to helping attract and retain quality talent.
If staff retention takes a backseat to recruitment, growth seems impossible. Consider the astronomical cost of a bad hire. According to the US Department of Labor, the cost of a bad hire is 30% of the employees first-year earnings.
If you minimize turnover, it saves on these hiring costs while improving productivity and boosting growth. In the long run, money conserved on the hiring process will free up cash flow and allow for greater investment in lead generation.
Agency Growth in 2018
The 2018 HubSpot Growth Report shows that agencies look to more leads, cash, and talent to solve their issues. However, instead of looking outward for more of the same, the solution seems to be to investing in their organization.
While new business is important, strengthening internal processes will allow agencies to maximize the value from their existing budgets. With internal best practices in place, business challenges become much easier to endure and overcome.