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How To Level Up Your Agency And Gear Up For Growth

Doubling your agency’s size from roughly 35 employees to 65 employees serves as the leveling-up stage where you take on bigger and better clients (and often better employees to serve them). As an owner, you’re no longer in the weeds like you might have been with 12 to 35 employees. Instead, your main focuses are business development and finance. In my experience, business development is about making the C-level connections that drive business. It might occasionally require “roughing it” on the golf course or riding waves with an eclectic client, but keep an eye on the big picture: According to the U.S. Small Business Administration, small businesses created two-thirds of the jobs added in the last five years. You’re doing important work out there on the ninth hole. Sharing The Leadership Load When your agency reaches the 35-to-65-person stage, owners must be OK with being removed from the day-to-day decision-making loop. Your former department heads will probably become vice presidents to make room for more skilled and senior employees underneath them. While client satisfaction and retention remain important, a variety of metrics and key performance indicators (KPIs) will move into the spotlight. A team with diverse backgrounds and expertise will be especially driven by numbers, and you’ll often see incentive pay (likely in the form of a bonus program) directly tied to KPIs. Along with more rigid compensation structures, scaling up to the 35-to-65 stage requires structured responsibilities, and the agency becomes almost like a factory in terms of how jobs are brought in and where they’re assigned to from there. This doesn’t mean saying goodbye to creativity; it means, instead, that onboarding work and accomplishing it on time (and on budget) must now become [...]

By |April 18th, 2018|

Agencies: Stop Thinking Like a Vendor and Act Like a Partner

In the formerly monogamous advertising world, polygamy now reigns. The modern version of the client-agency relationship leaves many agencies longing for the "Mad Men" era of sole partnerships, 9-to-5 schedules and heavy drinking by 3 p.m. -- but those days are long over. Today, firms seeking integrated solutions will often hire several agencies at once, each acting as more of a vendor that delivers a specialized service rather than as a partner that fulfills all the company's marketing needs. Companies do still seek partnerships with agencies, however. Unilever's been working with Lowe & Partners since 1899. And GM has a long-standing relationship with Campbell-Ewald that dates back to 1919. Other household companies -- Procter & Gamble, General Electric, Kraft Foods and General Mills -- also boast established, lasting agency affairs. Does that mean these companies won't step out on their partners from time to time? Not on your life. And when that happens, agencies find their egos bruised by this transgression. To renew the partnership dynamic, they must start behaving more like holistic consultants and remember that customers choose vendors but consultants accept clients. To position your agency as an actual partner, stop thinking like a vendor. Focus on these six strategic measures to change how a client views you and your team's capabilities: 1. Know the client's business. Partners know more than one side of a client's business. Instead of focusing only on the marketing end, approach the business as if you're running it. Get to know the distribution challenges. Look for ways to improve the sales system. Even simply walking the production floor asking questions demonstrates your interest. Getting your hands dirty alongside the client and sharing your thoughts on the business as [...]

By |August 16th, 2017|

5 Overlooked Metrics Your Agency Needs to Measure for a Profitable 2017

Running a business takes everything you have. Entrepreneurs pour their creativity, passion, effort, savings -- their everything -- into their work. And five years after they start, half of them are out of business. A decade later, two-thirds have called it quits. But why? For marketing firms, I believe it comes down to a lack of diligent measurement. Sure, measuring and tracking may not be the sexiest part of running an agency, but it's the only way to ensure you're not throwing money away. Commit to tracking these five things in 2017, and you'll have your most profitable year yet. 5 Metrics Your Agency Should Measure in 2017 1) Adjusted Gross Income per Full-Time Equivalent Employee Determining your number of full-time equivalent employees (FTE) is a convenient way to measure labor. To do this, denominate employees into 40-hour-a-week units. A full-time employee is equal to one FTE. A 20-hour-a-week employee is 0.5 FTE. Your target should be $150,000 of adjusted gross income (AGI) for every FTE. That amount should cover salaries, benefits, and overhead while leaving enough profit to reinvest in the business or offer bonuses to high-achieving team members. Years ago, the target AGI for each FTE was $100,000. Inflation accounts for some of the increase, but marketing agencies are also hiring expensive people to fill positions on growing digital teams. In short, the world has changed. It's gotten more expensive. Many marketing agencies haven't adjusted their billing rates to keep up -- and that's a big problem. If you're only earning $100,000 per FTE, your agency likely isn't very profitable. Those thin margins carry extra risk when an unexpected tax bill comes due, equipment breaks down, or you need a retention bonus for [...]

By |June 16th, 2017|
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