Scale Your Agency While Attracting Great Clients, Recruiting Top Talent and Driving Higher Revenue (Part 2)
In Part 1 of this two-part series, we provided an overview of the key components of how to scale your agency including:
Strategic growth plan in writing.
Strong and thriving culture.
Investment to build out staffing and expertise.Making informed decisions for when to add staff.
(Review Part 1, here.)
Today, in Part 2, we’re providing the specific steps and actions needed to accomplish these things.
Be ready (and able) to invest in the expanding infrastructure your agency will need.
For continued growth, senior leadership supported by adequate resources will be required in the core business functions.
Building a strong business development capability is critical (and the earlier the better). This person or team will manage marketing and organic growth while supporting the sales process. ROI will be 1) building the agency’s reputation which over time will increase the flow of quality leads in your target prospect categories and 2) increasing reliance on the agency’s reputation vs. only the owner/leaders’ personal referral networks.
You will also need to build a talent management function to recruit, onboard, train, conduct performance reviews and manage career road-mapping. This person/team will proactively deal with talent needs and headaches. And they’ll be busy. For example: A forty-person agency with 20% annual revenue growth and 20% staff turnover will need to replace eight people and add eight more for a total of sixteen new people to find, onboard and train.
Your financial operation will scale with revenue, evolving from a bookkeeper to finance director to CFO to COO. In our experience, you’ll be adding resources with each $5 million in incremental revenue.
You will also need an experienced tech expert to manage IT and platforms.
Hiring for specialty roles will be required as you successfully target integrated work and client needs ramp up. You’ll need strategists and planners as well as expertise in data and analytics as clients demand more sophisticated and effective solutions to bigger business challenges.
At some point, you’ll need to add creative and digital talent with the ability to think in terms of integrated campaigns and not just one-off executions. (They should be at least 50% billable to start while also supporting marketing and new business efforts.)
Define the client service architecture that makes sense for your agency.
All agencies aren’t the same. Adapt these guidelines to fit the financial goals you have for your firm and your own management approach.
Clearly determine and communicate revenue targets for both revenue stream leaders and the account supervisor level. Establish utilization/realization targets for all other client service roles.
Define the financial metrics which each revenue stream leader must strive to achieve. Key components of your expectations should include:
Overservicing of 5% or less for the fee budgets managed.
Team utilization at 90% or higher.
Standard billing rates.
Billing to be reviewed and out by “X” date.
Solid monitoring and forecasting of actual performance.
Further, to guide hiring, define the expected ROI metrics for new hires. You should also have a growth philosophy for hiring which reflects:
Senior hires should precede new revenue. You’ll need their knowledge and experience in order to win in new areas.
All other hires should be made after revenue growth. (The exception? Always hire superstars no matter what P&L tells you.)
Hire additional senior revenue stream leaders as others in the same role hit their targets. Don’t overwork your best producers.
Create a culture based on planning, learning, teaching and accountability.
To have the best chance of maintaining consistent staff and client experiences as you grow, planning, learning, teaching and accountability must be deeply embedded within the agency’s culture.
Develop a strategic growth plan annually with quarterly “accountability” reviews to drive satisfactory progress vs. goals and assigned responsibilities. Your plan should identify logical growth opportunities as well as steps and timelines for improving the brand proposition, leadership roles, organizational structure and business development.
For each of your leaders, define clear roles with aligned responsibilities, authority, accountability and incentives.
Formalized and easily repeatable methodologies will be needed for:
Overall client service delivery.
Core program components (strategy, branding, media relations, etc.).
Building and promoting IP.
Pursuing new business.
Scoping, budgeting, billing and other financial processes.
Performance reviews and compensation.
For your people to do these things well, they must first be taught how to do them. This begins with onboarding and then extends through a robust professional development program (with a specific curriculum by level).
Formalize your new business development process.
The most successful firms have mastered and adhere to these five fundamentals for winning more than their share of quality accounts:
Consistent, high-value outreach to a giant prospect list (and using tech to build it).
Multi-tiered marketing plan executed in addition to content marketing.
Expecting senior-level networking and referral-building from their leaders.
Standardizing and training for the agency’s sales process (including all outbound messaging and presentations).
Identifying and aggressively wooing a small set of dream prospects.
These agencies have also formalized the management of their organic growth process.
Identify and actively pursue new opportunities for increasing profitability.
Wherever possible, package what you take for granted differently to create branded products for which you can command a higher price. What research system, strategic development process or other activity do you pursue virtually every day which can be transformed into a proprietary product with a much higher perceived value?
Consider the actual value you provide to clients vs. the cost per hour you’re charging them. Figure out how to more effectively communicate that value to your clients and start pricing accordingly.
Also consider success fees for “Bet the farm” engagements where there’s a lot on the line (which could be addressing a crisis but is not necessarily limited to this).
What else can you do? Think about it.
We can help you to accomplish any or even all of these things.
Due to our many years of experience in consulting with a wide range of agencies of many different sizes and skill sets, we’ve learned first-hand what works… and what doesn’t. There really is a formula for success and we can help you adapt and institutionalize it within your agency. Please contact us at any time to learn more.
We’re here to help you prosper.
Prosper Group exists to help the owners of independent marketing and communications agencies achieve their ambitions and maximize the value of their life's work.
Our team of former agency leaders and owners focus their deep experience on implementing proven proprietary methodologies across our three practices of agency performance, owner exit planning and M&A transactions in order to drive owner and agency success.
To learn more about us, please visit our Services page.
