Do You Want to Know the 5 Different Levels of Agency Services?
In this episode we’ll cover:
- How you can prevent your agency from being viewed as a commodity.
- How you can charge more & why clients will pay for it.
- What you need to do to increase the lifetime value of a client.
- Do consultancies have an advantage over digital agencies?
With over 30 years experience in the agency world – many of them owning and running his own agencies – my guest Jamie Turner brings us some serious black box knowledge. Spoiler alert: remember that phrase, it’ll be important later:) Jamie has worked for agency giants in New York and Atlanta and today is the Founder and CEO of 60SecondMarketer.com and 60 Second Communications. He’s an author and international speaker specializing in social media and mobile marketing.
I read a couple recent blog posts of Jamie’s where he explained how you can save your agency from being left in the dust. I loved reading this post so much I that I knew I needed to get Jamie on my podcast so he could share his wisdom with you, too.
Jamie says he was like the typical agency owner, with a ton of ideas but a short attention span to see them through. He was always chasing the new bright, shiny object. However, once he learned to focus it enabled growth and expertise. And he says, “the more expert you are at something, the more you can charge.” Isn’t that the ultimate goal?
We can all agree that there is no shortage of agencies that do what we do. Even consulting companies are beginning to offer competitive services. So, how can your agency survive and thrive in this climate?
First and foremost you need to understand the 5 categories that agencies fall into so you can identify where you are and where you need to go in order to stay competitive while also growing and scaling your business.
Do you want to know the 5 different levels of an agency’s services?
The goal of agencies is to work up the chain of these 5 categories for more staying power and a greater client lifetime value.
1. Hands Work
Most small- and mid-sized agencies fall into this category and stay here. They win new business by pitching tactical work. They create assets like websites, logos, etc. and sell that type of work. Problem is, this work is one-off project work that typically doesn’t lead to much more. Over the course of a client relationship these opportunities tend to decrease. The client views you as an easily replaceable commodity. Clients can bring jobs in-house or find another agency that can do things “faster or cheaper”.
It’s OK to reel in new business this way but you should spend less than 6 months in the Hands Work phase. Show them you can do more that churn out work by moving into the next category.
2. Central Hub
You can start to get in the driver’s seat by being the Central Hub. Most clients have multiple agencies to meet their needs: digital, media, creative, direct, etc. When your agency acts as the Central Hub and the other agencies act as the spokes, it positions you at the center of the workflow.
Jamie’s agency puts themselves in this spot by creating and maintaining the status reports, managing the status calls, etc. In the Central Hub role you can build trust with the client, but you are really only viewed as an extension of the team. To be highly valued by clients and charge more for your services you need to be considered an advisor, not an order-taker. That is why the next category is so important.
When you have bright ideas and can provide original campaigns and business building solutions your clients will see more value in your work. In a recent survey we conducted, we asked brands why they started working with an agency. The #1 answer was that they were looking for guidance/advice on emerging trends and the insights on what to do next.
An agency that can bring original ideas to the table will establish authority. Clients are more apt to listen and give your ideas a try when you’re already acting as the Lightbulb. What’s even better is that they will be willing to pay more for them.
4. Wisdom & Experience
In this position, the client recognizes your agency as an authority in their industry. You share case studies and data to back up your ideas. You understand your client’s needs and challenges as well as those of your client’s clients. You are able to identify and help them avoid potential landmines. You see the big picture.
Click here for my interview with Del Ross, Director of Sales and Marketing for Intercontinental Hotels Group. Del says the best way for someone to score a meeting with him is to “have a point of view and back it up with data and research.” When your big ideas have proven results and it’s reflected in the client’s ROI they are more than happy to spend their budget on it.
He also said the #1 way to get a meeting with a high powered executive at a major brand or any company you are targeting is to lead with something something new and cutting edge that is innovative and helps grow their business. Projects like these are what scores $50,000 of test project budget. When your agency falls into this category you are viewed as more than just an agent – your role is as a trusted advisor for growing their business.
5. Black Box
This category of agency is indispensable and it’s what EVERY agency should be aiming for. If your agency can provide technology or people that the client doesn’t have, can’t access or can’t afford you are able to provide value they can’t get elsewhere. This needs to be something proprietary and measurable – something the client can see in the resulting ROI.
When you can provide something exclusive that yield sales or growth results, you can charge more and your clients won’t mind paying for it.
So, where does your digital agency fall on the list?
As an agency, your job is to meet the client’s needs and address their pain points. It’s a challenge to get to the Wisdom & Experience or Black Box level.
Jamie says almost all agencies bring their clients in at a low tier and then you, as an agency leader, must challenge your team to move up the ladder. Secure your footing on the Black Box rung and you’re GOLDEN. Don’t get comfortable – never stop innovating. Take time to get ahead once and be sure to stay ahead always.
Do Consultancies have a Black Box Advantage?
It’s easy to get discouraged knowing consultancies are walking in at the Black Box level and getting away with charging a ton.
Don’t let that get you down. Consultants solve problems based on case studies and what they’ve learned in textbooks. They looked at what’s worked in similar situations and help their clients get results using a tried and true method.
As agency leaders with creative minds, we approach problems with unique, innovative solutions and develop business building ideas. This gives us an edge over consultancies. It’s the Lightbulb phase that protects agencies and gives us our staying power.