Is Your Agency Prepared to Face an Economic Recession?
How will your agency face an economic recession? Does your positioning allow your agency to evolve and come out stronger? If you haven’t been preparing for a similar scenario, now is a good time to make some changes. Think about your agency’s position in the ecosystem of today’s market and how it could pivot to improve it. Today’s guest has seen some tough times in his 10 years in the business. He shares some of the changes agency owners can make to adapt and thrive during a recession.
Manish Dudharejia is the founder and president of E2M Solutions, a full-service white-label digital agency. His team works mainly with digital agencies to help them solve their bandwidth problems. After 10 years in the business, E2M has worked with over 450 agencies across the country and currently has a staff of 160 people.
He’s a repeat guest and friend of the show, who has shared the complexities of the Principle-Agent problem and big decisions for a successful agency. Today he’s helping us learn about surviving and thriving in an economic downtown.
In this episode, we’ll discuss:
- How the right positioning is the key to facing a recession.
- How, even in the middle of the recession, your agency can keep growing.
- Why a recession is a time of opportunity for small and mid-sized agencies.
- How to can face possible layoffs if business slows down.
How to Prepare Your Agency for a Recession
To survive a recession, your agency needs a very strong position in the market and products/services that solve real problems. With a clear vision of your agency’s positioning and offer you’ll know exactly who your clients are. This requires some reflection about things you can improve and simplify in your offering.
Regardless of a recession, if you’re having issues with onboarding, then you have a problem with your product or service. A recession is a great time to test out your product or service. If there’s an absolute need for what you offer, then your agency can go through a recession seamlessly.
One mistake agency owners make during a recession is to stop offering some services. Many assume that, if things are slowing down, the business slows down as well. This isn’t necessarily the case.
A recession is still an opportunity to make the most of your existing clients. It’s easier and more economical to retain existing clients than find new ones. The key is being more communicative with your clients. Reach out and start a conversation to find out what they need. Are there any other ways your agency could be helping them? You can do this without sounding “salesy” but by listening, taking a genuine interest in their business, and looking for new opportunities.
2 Tips to Keep Going During a Recession
- Continue marketing. During hard times, agencies should continue marketing and producing content. Write a weekly post and send a newsletter to clients to make sure they’re engaged. You want to ensure your customer service is top-notch so you’re not losing your existing clients. This is how your agency will continue growing in a recession.
- Be flexible. A little bit of understanding, empathy, and flexibility goes a long way with both existing and new clients. This applies especially to brands and industries being heavily affected by the recession.
Why Agencies Have a Good Chance Withstanding Hard Times
Agency services, like website building and maintenance, are essential for companies. Even in the middle of a recession, businesses want their websites to be up and running. They are still likely to hire agencies for essentials like websites, SEO, and content as a way to engage new clients.
Don’t assume a recession means staying put and waiting for the fall. Embrace new activities and services and maximize other areas where you can. A recession may be a time when your agency loses some clients, that is true. However, it can also be a reset and an opportunity to go after new clients at a higher rate.
Agencies that survive in a recession are the ones who get really specific about the clients they’re going after and the problems they solve. Of course, people freak out when things start to slow down. Nonetheless, this won’t last forever. At some point, they’ll see the need for marketing to accelerate their business. The economy is cyclical and it will come full circle again.
Recession Can Be an Opportunity for Agencies
Mid-size and enterprise-level businesses look for cost-effective solutions in times of recession. This means it’s a good time for small to mid-size agencies to land an enterprise-level client. In a recession, those clients won’t look for enterprise-level agencies because of the cost. That also means an economic downturn is a great time to pivot your messaging and position your agency to tap into new opportunities.
A lot of agencies don’t realize their positioning might be off during difficult times because they’re just trying to survive. You need clarity to figure out your positioning and rethink your offering. How can you do it? Try to find ways to keep it simple. It can be one of the hardest things to do. However, when you position yourself the right way you’ll land the right clients and take advantage of new opportunities presented in a recession.
Facing Possible Layoffs Within Your Team
Layoffs are one of the things agency owners fear the most about a recession. You may feel responsible for employees and dread the moment when you have to consider making job cuts. This isn’t necessarily the worst thing. For starters, doing it in sooner than later helps them find something else quicker. Also, it’s a chance for you to really evaluate your team and choose just your best people.
In 2017, Manish was in the position of letting go part of his team. After that, he thought about how to better position the agency. They decided to pivot and become very specialized in a few services.
This is an exercise he recommends for every agency owner when on the brink of recession. He believes all agency owners should take some time at the end of the year to reflect on their agency’s results. Consider where you can make improvements. This is an area he urges agency owners to listen to their clients. If possible, he recommends doing a survey with some simple questions like “is our offering simple or is it confusing?” “is our pricing simple or is it confusing?”
Client feedback is your starting point for resetting and simplifying your offer for the next year. He finds every time he’s done this exercise his agency becomes stronger.
Be Obsessed About Freeing Up Your Time
Finding the time to focus on what needs to change and ways to improve the agency becomes easier the better you get at delegating it. Another thing to ask yourself in an end-of-year reflection is “what are my current tasks at the agency?” and “could somebody else be doing this?”
If the answer is yes, it’s time to find the right person and delegate it. The more time you free up from daily tasks the more time you can dedicate to working in the business and strategies for how to pivot during a recession.
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