4 SERIOUS Strategies for Rapid Agency Growth
In this episode, we’ll cover:
- Why you should niche to become more successful.
- Ways to change your pricing to increase revenue and profit margins.
- How to use case studies as a lead generator.
My guest today is Dan Lok, a self-made millionaire and entrepreneur who consults businesses for an equity position. He has taken on not one, but three troubled agencies and turned them into 7-figure businesses. So, if you are new to agency ownership or been in the game awhile but need some tips for shaking things up, you’re going to want to know more from this self-made millionaire.
Strategy #1 – Be a specialist.
Does your agency claim to be able to do everything for everyone? Or, is your target something broad, like “small businesses”. You are a generalist but… the riches are in the niches.
You might want to help everyone, you might even think you can. But if you’re busy trying to be good at all things you will be the best of none of them. Every industry has it’s own nuances, lingo, standards, etc. If you specialize within just one, you only have to learn about that specific industry. Then you can dig deeper to get a richer understanding. You become more efficient which saves you time and increases productivity. You also become the authority in the field and get referrals within the industry. There’s a cyclical effective that generalists just can’t achieve.
Case in point… One of Dan’s first ventures was with an agency called Standard Marketing. Lame name, right? You don’t get any more general than “standard marketing” and they were handling all sorts of marketing for all sorts of clients.
The fix… After some analysis, they realized more than 50% of their clients were real estate agents. They decided that was the niche, rebranded the agency, calling it Top Agent Marketing, and wrote a book about real estate lead generation.
The result… Sales nearly tripled in the first year… from $30k/mo to $80/mo! Today, they’re hitting a 6-figure monthly revenue.
Strategy #2 – Revamp your pricing strategy.
There’s two ways to go about this…
1. Performance Pricing: Think of it from the client’s perspective. They want results. If you are getting paid based on the results, you are motivated to deliver better results.
If you follow a pricing model that allows for a base rate + incremental amounts based on performance, you’ll find you work with less clients and make more money.
The key to successful performance-based pricing is creating the right criteria to set up success. Be selective to be effective. For more on implementing performance-based pricing check out this interview with Tom Breeze who’s also mastered this pricing model.
2. “Three Boxes” Pricing: We see it all the time – car washes, movie theater concessions… There are three levels of pricing: basic, moderate and deluxe. The basic package is so lame that no one goes for it. The deluxe package is so outlandish that no one goes for it. These two are the decoys to get people right where you want them – the moderate package. The moderate package is what you’re already best at anyway.
The great thing about these three boxes is that it provides a basic option for budget conscious clients. And for the 80% that end up with the moderate package, it plants the seed that there is more.
Strategy #3 – Use your success stories.
Prove you can do what you say you can do. When you are a specialist in a specific niche you can build recognition and establish authority by featuring case studies in your marketing. It sound elementary but it’s a great way to increase your profits and it’s often overlooked.
Case in point… In early 2013, Dan invested in an agency that specialized in the digital marketing for audiologists. They were making $90K/mo but 0% profit. They were 90 days behind in delivery and $90K in debt.
The fix… They evaluated everything from staffing to clients to pricing. In a short time, the entire team was slowly let go, nearly 25% of the clients left or were let go, and success story marketing was implemented.
The result… In three years, profit margin went from 0% to 35%. The team went from 11 to 16 full-time employees. They are in no debt and have $200K in savings. They are on track to hit $4 million this year.
Strategy #4 – Be your charming self.
You love working on your computer. You ‘get’ your computer. Your computer ‘gets’ you. That’s why digital marketers aren’t typically known for being super personable. But hiding behind your computer isn’t going to accelerate your business.
As a digital marketer, you’re selling an intangible service and your clients won’t see results right away. In order to want to spend money working with you, they’ve got to get to know, like and trust you first. People want to work with people.
That means you can’t hide behind your computer screen. You need to connect with people on a personal level by networking, speaking, working trade shows, making phone calls… And last but not least, don’t send proposals via email. Meet to go over them in person!