3 Things Every Agency Must Know In Order to Grow
What does it take to truly grow your agency? Could your pricing structure be holding you back? Are you giving away your strategy for free? There's a lot to consider when growing an agency, but it a lot of it comes down to 3 basic things every agency owner struggles with.
In this episode, we'll cover:
- Choosing your agency's niche.
- Determining your agency's pricing structure.
- Helping clients understand your agency's value.
I talked with Wendy Covey, Co-Founder and CEO of Texas-based Trew Marketing, an agency that works with technical audiences such as small to mid-sized engineering companies. She is here today to talk about three of the issues that often cause a lot of worries and stress for agency owners.
1. Choosing Your Agency's Niche
Wendy and her business partner started Trew Marketing after working together in the engineering industry. What they discovered was small to medium-sized engineering companies often have horrible websites. This was a challenge they could help solve.
Wendy says the partners had conversations in the beginning about what their niche should be. Just as they were starting their business, the 2008 economic recession hit. A blessing in disguise, the recession placed even more importance on the two deciding what type of agency they wanted. They made a list of who their ideal next five clients would be and it always came back to their past connections in the engineering industry. "As soon as we narrowed our focus to just one type of client, our business took off," she says.
Trew Marketing regularly receives interest from potential clients in other industries. The partners do not venture away from their niche, however, due to the inefficiency of trying to learn a whole new market. Instead, they have continued to hone their expertise in one area so they are able to provide the best services for their clients.
2. Determining Your Agency's Pricing Model
Determining how to price your services is one of the biggest considerations for a new agency. Like most new agency owners, Wendy says Trew made peanuts off its first client. The partners considered billing hourly, but quickly realized their profits would decrease as their efficiency increased on an hourly structure.
Trew's pricing is derived from an hourly rate, but there are considerations given to the market rate as well as the value of their service. Your pricing structure can evolve and change over time. If you're too busy, you're not charging enough.
3. Helping Clients Understand Your Agency's Value
It doesn't take a new agency owner long to find themselves in the never-ending debate over whether marketing agencies should pay for the pitches they provide to prospective clients or offer the strategy for free in hopes of landing the project. Wendy is on the side of the debate that says you should never offer strategy for free.
Trew's clientele consists of engineering CEOs and executives who often have no idea what marketing really is. A lot of the strategy the agency provides for its prospects includes education on need as well as how it is going to be executed. Wendy believes "strategy sets the tone for everything else."
Trew generally requires their clients to participate in the strategic process before delivering services. This is especially important if there is no internal marketing department. Trew finds more success by involving the client early on in the strategy process. When clients are involved in the strategy they understand more about the value of the agency's execution.
Growing an agency is not one-size-fits-all. However, Wendy says one thing is true for every agency: they underestimate the value they bring to their clients. Learning that value is one of the biggest keys to thriving as an agency.
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