How to Grow a Digital Marketing Agency (and Scale It) in 2023
This guide shares a real-life case study on how to grow a digital marketing agency from an idea into a six-figure business.
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I’ve spent a large portion of the last three years working for marketing agencies. The last company I worked for grew from a small startup to a 7-figure business in 18 months. As Head of Content for that agency, I helped shape the digital marketing content strategies for several Fortune 500 companies.
Six months ago, I quit that job to focus on my content marketing agency, something I was previously doing as a side hustle. I’ve since grown the company from two employees to ten full-time staff. We’ve been landing clients at the rate of two or more a month and then doubling our retainer’s value for 75% of clients in the first 60 days.
This guide will share the approach I took to grow my content marketing agency from an idea into a six-figure business. The article will discuss how to systemize business operations, pitch to customers, and land clients. Specifically, I’ll focus on agency pitching and the approach I’ve taken to land global clients.
Start Small and Be Focused
When you’re starting a business, there is a feeling that you should accept any customer who comes your way. Logically, the best way to do this is to tell the world that you’re open for business.
When you read the backstory of many successful businesses, you’ll realize that many companies did the opposite. Instead of targeting everyone, they started with a clearly defined business idea and a limited target audience. Let me give you an example:
- Amazon: Started selling books online and then moved into other niches.
- Facebook: A social media platform for Harvard, and then the world.
- AppSumo: Offering software deals targeting online entrepreneurs then expanded into SaaS and other sectors.
The basic idea here is that you select your niche, dominate the market, and then grow.
There’s a logic to this.
Source: Blue Ocean Strategy
Starting a business in a mature market is difficult. To gain a foothold in a market, you are forced to compete with established firms. Winning a client often comes at a value-cost trade-off; you are forced to cut costs or offer more value for money. Either way, your profit margins will be hit.
As an agency, niching down will help you overcome this problem by differentiating yourself from most of your competition. In addition to positioning yourself as a niche expert, you:
- Reduce the number of competitors.
- Can create relevant marketing material that appeals to your ideal client.
- Make your sales and outreach more focused.
- Simplify service delivery (clients in the same vertical often experience similar problems and offer similar solutions).
With a niche approach, you can gain recognition for your service, establish yourself in a sector, and then move into other verticals. In my case, I decided to focus on the SaaS niche initially.
Focusing exclusively on SaaS clients has helped customer acquisition. I’ve been able to grow my network quickly and deliver services faster. This has helped me secure more customers and improve my profit margins. Moreover, the more customers I have, the more referrals I receive. There’s a snowball effect.
I recently expanded my service offering to a complementary market. I deliver white label services for agencies that work with companies in the marketing niche. The needs of my clients are similar to SaaS, and I’ve expanded the number of potential clients.
Hopefully, you can see the logic of niching down.
The Importance of Being A Disruptor
Earlier in this guide to agency pitching, I used a graphic from the book Blue Ocean Strategy. The authors of the book set out that disrupting your space will help you acquire more customers. Let me give you an example.
Before Russel Brunson, the idea of a sales funnel creator had never been discussed; you had landing page software and website builders.
When Russell Brunson launched Clickfunnels, he tried to condition the market to see sales funnels as one of the best ways to acquire customers. He then positioned Clickfunnels as the best solution to the problem. In 2017, Clickfunnels was valued at $360 million. Nowadays, when people talk about sales funnel software, they think of Clickfunnels. He talked about why and how he implemented this strategy in his book, Expert Secrets.
Marc Benioff, the founder of Salesforce, did the same thing implementing a disruptive growth marketing strategy. When Salesforce was founded, most enterprise companies used bespoke custom software. Marc wanted to transition the market to cloud computing. When the company was founded, he defined his mission as “the end of software” and had some pretty amusing adventures making Salesforce the number one cloud sales software globally.
Ideally, you want to undertake a strategy that will disrupt your market.
It isn’t easy to be a disruptor. Some companies are making waves, though. Below are two examples in the SEO space:
- UpUGo: This digital marketing agency based in the UK has an online tool that provides SEO insights for a website. You can pay the agency behind the solution to implement the SEO recommendations or manage link building campaigns.
- UberSuggest: UberSuggest is a free to use SEO tool owned by Neil Patel. Neil wants the tool to have the same functionality as products like Ahrefs and Moz. I listened to a podcast where he talked about using UberSuggest for agency lead generation.
If you can disrupt your space and do things differently or provide a better customer experience, you’ll find customer acquisition gets easier. I’ve tried to implement a few disruptive policies at Launch Space.
For example, most agencies will lock a client into a 6-12 month contract.
A contract offers safety for an agency. You know you’ll get paid every month. Of course, a contract is a risk for a client. They need to commit tens of thousands of dollars of capital.
I don’t ask clients to sign contracts and use the pay on results model. This approach eliminates a large amount of risk for my clients.
I borrowed the idea of reducing client risk after reading the book Sell Like Crazy by Sabri Suby, who runs the very successful King Kong marketing agency in Australia. Every agency has successful case studies to show off. Very few agencies put anything on the line for their clients.
If you want to grow your business fast, disrupt your niche. Do things differently. When it comes to agency pitching, be memorable.
Agency Pitching: 3 Customer Acquisition Strategies
There is no “right way” to grow your agency, but there are effective strategies you can implement that have worked for many businesses. You can expect to get customers through a mixture of referrals, sales outreach, and cold leads in an agency setting. Client referrals will generally come from other agencies, your staff, or previous or existing clients.
In the next sections, I’ll share some of the customer acquisition strategies that have worked for my business. Let’s dive in.
Introductory Offers and Grandfather Pricing Strategy
When you’re starting an agency, there are a couple of levers that you can play with to attract customers. My initial approach was quite simple. I decided to price my services cheaply to undercut the cost structure of the established competition.
As a startup, you can offer services for a low cost.
The only thing I had to factor in when I set my prices was how much I would charge for my time. I didn’t have any additional overheads like staffing and tool costs. These are things your established competitors need to consider.
Having worked for an agency, I was lucky to have an insight into how much businesses are willing to pay for a professional service. The agency I worked for offers an entry-level SEO package of approximately USD 2,500 a month for 12 months. For that price, a client would get the promise of around five links a month and some additional SEO support. That’s a $30,000 annual commitment.
I decided to offer SEO support for free; it doesn’t take much of my time to undertake SEO support. I charged a fixed price of $200 per published guest post. I pitched this offer to a couple of companies, and one person showed interest.
That first lead provided me with a side income of $1,000 a month. I decided that I’d accept three clients at a minimum rate of $200 per post for five posts per month. Once I hit that number, I increased my rate to $250 but locked my first four clients in at $200 a month per post.
I’m currently offering my service at $250 per guest post. I’m still deciding whether I should go with the low-cost, high volume Walmart approach to business or offer a higher-cost service.
If you’re starting, I recommend starting low and then increasing the cost of your service. The advantage of this pricing structure is that as your price increases, you’ll find it easier to acquire customers because you’ll have established your reputation. If client numbers drop for any reason, you can cut your overheads and decrease the service cost making your offer more financially competitive.
How to Run a Cold Outreach Campaign Like a Pro
One of my first jobs was in telesales. At the start of my workday, I was given a list of numbers, and I’d start phoning strangers. At the end of my word day, I would have a list of prospects and some customers.
I rely on that basic system — a list of leads and a willingness to contact strangers out of the blue — for my agency pitching. In an average week, I’ll send 100 emails to businesses that fit my ideal customer persona. On a good week, 3% of the people I mail will respond to my inquiry. One or two of those responses might turn into a client.
Generating a list of prospects is straightforward. I discussed many of the elements of this in my guide to online networking on the Sumo blog.
For B2B outreach, I start by making a list of suitable companies. I then search for the appropriate person on LinkedIn according to their job title. Depending upon the company, the relevant job title is usually something like Chief Marketing Officer, Founder, Director of Digital Growth, etc.
I then add them on LinkedIn and use an email finder to get their contact details. I use Voila Norbert. However, there are a lot of other great email finders.
Finally, I send them an outreach email with my pitch.
That’s the basic premise of an outreach campaign. I run a lot of variations, though. For example, here’s a soft sell outreach campaign we conducted.
We targeted marketing agencies in New York. The resource in the email is this article on my site. We landed a new client through the outreach.
I ran a variation of this campaign targeting people who left a comment on the Backlinko blog.
It wasn’t a sales campaign. I wanted to connect with people. In addition to the positive responses, we got a few clients.
You can, and I do, run more direct cold outreach campaigns. If you’re pricing is competitive, make that a central part of your pitch. Here’s an example of another outreach campaign I ran that leveraged the authority of a site I wrote a guest post for, in this case, Sumo, in my sales pitch.
We landed two clients from a limited campaign.
When writing your email copy, avoid buzzwords. You don’t want to come across as a sleazy salesperson either. Inject personality into your copy.
Most importantly, experiment. Learn from your failures and your successes. Then, when you have a strategy that works, scale the campaign. It’s the same basic strategy that you’d use if you were trying to scale a PPC campaign.
Deliver Services For Yourself
As a business, I think it’s important to stand behind the product or service you offer. That statement may sound like common sense, but surprisingly few SEO and content marketing agencies invest in their marketing.
Take a look at the backlink profile of an SEO agency you’ve used, and you’ll likely see what I mean.
One way I live up to my claims is by implementing the strategies that I am promoting. I’m actively trying to make money blogging. I wouldn’t be able to look a client straight in the eye and suggest they spend thousands of dollars with me and convince them it’s worth their time if I wasn’t doing this.
Getting active in my niche, and making a name for myself as a content marketer, helps me secure clients. Three of my current clients contacted me because they had come across my guest posts.
In addition to promoting yourself online, I strongly suggest you get involved in offline networking. I was planning to spend a decent portion of 2020 attending and speaking at conferences. Unfortunately, that’s unlikely to happen this year, but I will come back to the plan in the future.
Systemize Your Business Operations
My first online job was the Technology Evangelist for Youzign. The founder of the company, and one of my good friends, Bertrand, instilled in me a respect for establishing systems. They come in handy when scaling a business.
I remember Bertrand spent a whole month back in 2014, creating training manuals and online resources for everyone at the company. The information included:
- Job descriptions for all staff
- Step-by-step guides for routine tasks performed by any member of staff
- Induction training for new staff
- List of contact details and access information for tools
He saved everything on Trello boards.
Creating systems such as this puts you in a good position to scale a company fast. You can onboard staff quickly and get them working with minimal supervision and oversight.
In one of my favorite books, I Don’t Work Friday’s, the author, Martin Norbury, makes a case for this organizational structure. With the right systems in place, you can scale what’s working fast.
When it comes to systemizing my business, I use a combination of Trello and Google Docs.
Everyone in the company has access to all the information.
Having systems in place doesn’t mean you won’t encounter problems. Hiring new staff and ensuring that things are operating takes up a large amount of your time as the company grows. However, putting a structure in place to support your goals makes growing a company fast easier.
Expensive Agency Mistakes to Avoid
Growing a business involves risk. You will have successes, and there will be failures. Rather obviously, you want to make the most of your successes and minimize the chance of failure. In this section of the guide to growing a business and agency pitching, I’ll cover some common pitfalls that I’ve encountered.
Ineffective Agency Partnerships
When selecting an agency to partner with, find an agency that offers a complimentary service to yours and isn’t interested in providing the solution you offer. For example, a company that exclusively offers web design or PPC services might be a logical partner for an SEO agency. For example, I’ve got a partnership of sorts with Jack Paxton from Top Growth Marketing, who manages the PPC campaigns for AppSumo.
However, as an SEO or content marketing agency, I’d skip a partnership with a PR agency. It might seem like a logical partnership opportunity, but you’re probably offering competing services. At least that’s my experience from viewing several failed PR and SEO agency partnerships.
Secondly, it is rare for an agency to promote your services to their clients actively.
The prime concern for most agencies is ensuring they maintain a good relationship with their clients. They don’t want to endanger that relationship. Unless the partner agency has experience with your service provision, they probably won’t recommend you.
In my opinion, agency partnerships should be a secondary sales channel. Focus on securing clients for your company directly. If you have additional capacity, you can test agency partnerships.
Hiring the Wrong Member of Staff
One of the biggest and most important investments that you will make in your business is your staff. Competent staff will help implement your business plans and propel the company forward. Incompetent staff can cause lasting damage to your reputation and force your agency to invest more human and financial resources to do the same amount of work.
As I’ve grown my agency, I’ve invested a lot of resources into finding qualified candidates. My guide to scaling your startup by systemizing your HR, one of the most popular articles on the Bamboo HR blog, outlines my hiring approach. The process is straightforward:
- Offer a competitive salary and opportunities for career advancement.
- Test every job applicant before you create a shortlist of candidates.
- Review their CV after the test. Then conduct your interview.
- Offer a contract with a 3-month probationary period.
- Put your candidates through your onboarding program.
- Review results and retain the best staff.
As an agency owner, you’ll need to make tough business decisions. Hiring and firing staff will likely be one of the hardest parts of the job. You must get this right. After all, your staff will play a key role in the growth of your agency.
Saying Yes to The Wrong Customer
Given that this article is all about agency pitching and how to grow your business fast, it might seem counterintuitive to discuss why you should turn down customers. However, I think it’s important to touch on this topic.
As a growing business, you want to ensure that you allocate the resources you have available in the best possible way. If you’re desperate for cash, then clearly you shouldn’t turn down customers. You need to cover the cost of salaries, tools, and any other expenses that you might have. However, if you’re not facing these issues, accepting any inquiry you receive will not make sense. I’ll provide you with a recent example.
As part of my outreach, I received an inquiry from a marketing agency looking for support for a client in the motoring niche. Even though the client was not in my target niche, we agreed to take them on as a client. We agreed on the details of the contract and started working.
Two weeks into the contract, I realized we had made a mistake. It was taking us a lot longer to land guest posts than it would in the SaaS niche. Yet, I didn’t want to disappoint the client.
Another two weeks passed. We failed to hit our targets, and it cost us a considerable investment of capital. As a company offering a “pay on results” model, the client had become an expense. We cut the contract.
Most agencies don’t operate on a pay on results model. A contract like the one above might still make a profit. However, if you don’t deliver results for your client, it will negatively impact your reputation. On a business karma scorecard, the cost outweighs the benefits.
I tried to share a framework for growing an agency based on my experiences scaling Launch Space and working for other agencies. Not all of the advice that I shared on agency pitching or growing a business will be right for your company.
The point of this guide isn’t to provide you with a copy and paste roadmap to success. Rather, I wanted to share ideas that have worked for me and get you thinking about what you can do differently or improve upon.
Hopefully, you found this guide insightful. I wish you the best of luck.