8 years ago, I got my first client.
Since then my SEO agency has grown into an industry leader and has generated millions of dollars of revenue with 50% profit margins.
How did I do it?
In this article, you will learn…
- how to build a marketing agency
- how to position yourself as an industry leader
- how to effectively land clients
- how to structure your agency so that you can generate profits and run off of healthy margins
Let’s dive right in.
Step 1 – Decide On Your Specialization
When you first decide to build a marketing agency, your priority will be to take on work wherever you can find it. You’ll do design work, social media, writing, outreach, and anything else you can get paid to do.
In the beginning, you will have to hustle. There’s no way around it, but the first step to real success in the agency world is to pick a specialization.
Most online marketing agency’s position themselves as a “full service agency.” Meaning they will take whatever they can get.
I highly recommend you don’t do this. Full service is a fast track to mediocrity. To build a successful marketing agency requires you to be the best at something. The more specific the better.
Let me tell you a story…
We first started Stodzy Internet Marketing in 2011. At the time, I had been having some success with blogging and I was learning how great content could drive organic traffic.
I was reading a lot of Copyblogger and Moz. I was starting to build my own successful brand and other business owners were seeing what I was doing. So people started asking me to help them.
“Hey, could you take a look at my site when you get a chance?”
Every time I heard those words, I knew I was onto something. So eventually, I brought the idea to build an SEO agency to Bryan, my best friend and business partner. We decided to give it a shot.
Like most beginners, we started off as a full-service agency. We would write blog posts, create social media content, manage Twitter accounts, and take in any business we could.
But one day, everyting changed.
I discovered an article on Moz written by Mike Ramsey. The article was called From Zero to a Million: 20 Lessons for Starting an Internet Marketing Agency.
In the article, Mike talks about a piece of advice he got.
“You offer SEO, Web Design, and PPC. That is exactly the same as 100,000s of companies around the world, who by the looks of things are better than you at it. What can you be the best at? What can you become known for?”
That’s when I knew we needed to find a specialization.
The next day, I brought the article to Bryan and we decided to specialize in BUILDING AN SEO AGENCY THAT WORKED SPECIFICALLY IN THE DRUG REHAB SPACE.
Why drug rehab?
Bryan and I are both in recovery from drug and alcohol addiction. We both understand the market and we understood the industry. It was a perfect fit.
And it is the number 1 reason why we have been so successful.
We established ourselves as the best marketing agency in the drug rehab space. We made the commitment to turn down work that didn’t fit within our specialization and our brand.
This is what you need to do as well.
Without a specialization, you are just another agency
That’s not what you want. You want to be the best. You want to be the company that people tell their colleagues about.
Without that brand recognition, there will be no reason for businesses to take you seriously.
In my view, the best way to get brand recognition is to be the best at something.
Step 2 – Start With Networking, Don’t Start with Sales
I’ll never forget landing my first client. The year was 2012. I had been a “business owner” for 2 months and I had yet to land a single paying client.
The only way I could convince people to work with me was to do it for free. I felt like doing free work was the best way I could earn the right to demand money.
Working for free gave me something else, something that I wasn’t expecting. Doing free work landed me relationships. Some of these relationships I still have and have developed into fruitful business relationships as well as friendships.
In the beginning, I recommend doing as much free work as possible. Reach out to local businesses or brands and tell them that you will build them a new site or write some free content for them. Free work is the best way to get noticed.
After you do that long enough, eventually you will land a paid client.
Working for free is a great way to get your foot in the door, but it’s clearly not a good long term business decision. You want to charge for your work and you want to get paid. The relationships you build will yield lifelong results if you continuously solve problems for people and impress them with your work.
What I’m trying to advocate you do is to focus on the long term success of your business. If you spend your time focusing on building a great reputation and on building great relationships, then you won’t need to worry about building a sales team.
Living without a sales team
Stodzy has never had a sales team. We’ve never even had a sales rep. Yet, over the last 8 years, we’ve continued to do a minimum of high six figures every year in revenues. This has been a result of networking and establishing a great reputation.
I have nothing against building sales teams. In fact, I am a proponent of outside sales. I know many marketing agencies that spent resources to hire and develop sales reps and it has been a great success for them.
But, even in scenarios where building a sales team is important, it still shouldn’t be the first step when you decide to start a marketing agency.
This is why you scale through your reputation
It is very difficult to scale an agency while putting so many resources towards outbound sales. In order for your agency to grow at scale, you will need to position yourself where your overhead stays the same, yet your revenues continue to grow.
The best way to do this is by building an infrastructure around your reputation.
Successful marketing agencies bring in most of their new business through word of mouth.
Until you have a solid foundation of new revenue, you will always be chasing the next deal. When you’re constantly stressed out about bringing in new business, you don’t have the time or the attention to focus on improving your business.
Building a great network is the first step towards systematizing your business. Without the network, all of your time will be spent worry about the next deal.
Step 3 – Putting Together a Process
When you start a marketing agency, you should immediately thinking about your processes.
It could be argued that our willingness to continuously look for ways to improve our processes has been the main driving factor in our ability to maintain high-profit margins in an industry that struggles to produce attractive profits.
In this step, we will cover the different areas of your business that require a process.
Having a well functioning onboarding process will save you time and it will save you hours of confusion moving forward.
The most devastating mistakes I have made involve not being thorough enough in onboarding. It took me years to break this habit. As the main driver of new sales, my priority was always to be “onto the next one.”
As soon as a new contract was signed, I would pass the deal off to the team and I would instantly look for a new deal to hunt. The problem is that my haste would create a lot of confusion and would only end up costing me more time.
This will annoy your employees because they will be the ones serving the accounts and many times they won’t have a complete understanding of the scope of work they are required to do.
Effective onboarding makes it so that your sales, your services and your clients expectations are all perfectly aligned.
How do you do this?
Every time you bring in a new deal, force yourself to fill out the onboarding sheet with as much detail as possible.
Create a detailed questionnaire that gets filled out every time you bring in a new client. Document all the details of the scope of work and any nuances that come with serving that particular account. You will be glad you did.
Below is a link to our own in house onboarding form. Feel free to copy it.
To start a marketing agency is one thing, to see success over a long period of time is a different challenge all together. In our experience, the #1 factor for long terms success is determined by 1 metric.
Average length of client.
It is much cheaper and much more profitable to keep your clients for a long time than it is to constantly need to bring in new clients.
We will talk more about this later, but in this section, I want to show you one of the biggest factors in increasing the average length of stay for your clients.
That is reporting.
When you start a marketing agency, you will find that in many cases, your clients aren’t expecting 10X results. Rather, they want to know that they’re digital marketing is handled. Your clients have businesses to run. They have other things to think about. The last thing they want to deal with is blog posts, web pages, search rankings, and traffic metrics.
So to ensure that your client feels emotionally “safe” with their marketing is to be completely transparent about everything and to send them weekly reports on their results, no matter what.
Automating this process will save you hours. My advice here is this…
Create a reporting template – At the end of every month, you fill out the same template with the same updated information. The report should look the same each month, the only difference is the obvious changes in results that you need to report to the client.
Build a report that visualizes data and also summarizes in simple English – You want to insert screenshots of the actual metrics because reporting on the data is important. But in addition, be sure to give a written summary of what happened, what you worked on, the results you saw, and what changes you plan to make next week.
Here’s a link to our monthly reports. Again, feel free to copy it.
Yes, you can build processes around your workflow. In fact, the more time you spend on the process, the less time you will spend on all the back and forth communication.
Think of your employees and your workflow as an assembly line. When a new contract is signed, where does the work flow to?
Below is how we’ve facilitated our workflow.
Note* – This is assuming we signed a deal for a new website build as well as monthly marketing.
Step 1 – Contract gets signed. I put the signed contract into the proper folder and I fill out the on-boarding doc. Once I submit the doc, the flow goes to Bryan.
Step 2 – Bryan is notified on slack about a new client. He sends a welcome email (automated) and sends a design brief. The client fills out the design brief.
Step 3 – David uses the design brief to design and develop the new website on staging while communicating with the client about photos, content, etc.
Step 3 1/2 – At the same time David is developing the website, he is also creating the site map (the structure of the website) and sends it to Michelle. Michelle then uses the sitemap to understand what pages she needs to write.
Step 4 – We get permission from the client to push the site live and we do. At this point, David is completely removed from the process because we know he only publishes sites once they are perfect.
Step 5 – Tricia and Tori then handle the work. They first put together an audit and a competitive analysis so they can communicate with the client what the plan will be over the next 9 months.
Step 6 – Tricia and Tori use Trello to manage the assignments and tasks for the day to day labor, and they outsource any random assignments to high-value contractors and other partners.
Step 7 – Every client gets broken down into monthly workflow patterns. At the end of each month, we create reports, send them to the client and then re-strategize. Most of the time, there will only be minor adjustments in strategy.
Step 8 – Repeat.
Step 9 – The invoices that were sent during step 1 get automatically sent to the client through Quickbooks and Bryan follows up on late and overdue invoices.
Notice – No one was bouncing back and forth. Once a specific task has been assigned to a department, no one else is in there, making the process more complicated. As soon as the sale is brought it, I am completely removed from the process which enables me to focus on bringing in more business and also makes it easier for the team to do their jobs well.
Step 4 – Be a Service Business
When Bryan and I first started Stodzy, we were having conversations about what we can do to make ourselves stand apart.
We came up with all types of crazy ideas. We wanted to do the things that all young tech nerds do. We wanted to…
- Have our own custom dashboard
- Build an in house client portal
- Create our own SaaS marketing product
It was during a phone call with one of our first clients that the secret to a great marketing agency was bestowed upon us. The client said…
“I just want to know that everything is working well and that I never have to worry about it again.”
Your clients don’t care that much about the fancy bells and whistles. What they want is to be served. They want to feel taken care of. They want to go to work every day with the comfort that their digital marketing efforts are handled and if they ever need anything, all they have to do is call us.
That was when we decided to go all in on the idea of customer service.
Tech businesses love to pretend like they speak some secret language of code and meta data. They don’t. Tech businesses need to appeal to their clients and customers at an emotional level, just like everyone else.
We designed our entire business around the idea of service. In the beginning, Bryan’s sole responsibility was the answer the phone for clients and explain what we were doing.
How do you appeal to your clients on an emotional level? Below are some easy and useful concepts.
Be available for phone calls
I have a site called YourBoulder.com. The site gets lots of traffic and unfortunately I don’t have the time to keep it up to date.
I called around to a few different agencies to find a potential partner and every one of them had an automated voice recording. I left messages for three of them and not one of them called me back.
This is unimaginable to me.
The power of listening and conversation and availability can not be overstated. If need be, hire someone who’s only job is to answer the phone for clients.
Agencies think they are saving money by making it difficult for clients and potential new business to get in touch with them. We try to automate the customer service and sales aspects but this is the worst choice you could possibly make.
In reality, the only thing that you should never automate is sales and customer service.
Yes, you can build process to streamline your time, but nothing will take the place and a caring voice at the other end of the phone, who listens to your needs and executes on solving your problems.
If there is one thing you get out of reading this blog post, it would be that making yourself available to people is the easiest way to differentiate yourself from other companies.
Keep notes of your conversations…
I cannot over state how useful this is.
Remember, when a client speaks to you, they don’t care that you have other clients to serve. They have their own specific needs and their own anxieties to cope with.
So listening and recalling information but previous conversations and using that information to serve their account will work wonders in improving your average length of client and well as help improve your services.
We use Monday.com. It allows us to chat back and forth through messaging as well as monitor all the idiosyncratic needs of our clients.
Send “thinking about you” emails to people
It’s difficult to talk about this strategy and come off as authentic. There are “motives” behind this. But I highly encourage everyone to get into the habit of sending people quick emails with articles, podcasts, quotes, or even little pictures…
The idea is that if you find something that can be helpful to a client (or even a colleague) and you send it to them without expectation of reciprocity, you will continue to build your network and your value meter.
This is how you get the deals that come in from conversations you had 2 years ago.
But the trick is not to be manipulative. You do this because you want to be helpful. You do it because you want to be useful.
Never ever send an email or do anything with a “quid pro quo” mindset. The key is to remove any expectation from your mind and do nice things for people with the understanding that the Universe rewards value.
You will be amazed at the results.
Step 5 – Build an Amazing Team
Your marketing, your reputation, and your business are all worthless unless you have a passionate team to facilitate on your services.
Keeping your team together will be one of the more challenging tasks in growing your agency. Obviously, people will come and go. In some cases, your agency will act as a stepping stone in someone’s career and that’s fine. I encourage you to welcome the idea of helping your employees build a great resume.
But you will need a core group. You will need a centralized mastermind group that will fight for your business and will be emotionally invested in seeing your agency succeed.
Without a team, you will never build with scale. You will never be able to systematize your business because you will be the one doing everything.
You need to give people a reason to work towards the success of your agency. In order to do that you need to reward them. Here are the method’s I have used.
Pay Top Dollar for Winners
Yes, give your people raises. Pay them as well as you possibly can. Your payroll should be your biggest expense and you should never cringe or feel resentful about your payroll.
If you are resentful about payroll, it’s because you failed in hiring the right people.
The ideal scenario is to build a team of winners. It is much cheaper and much more cost effective to pay high performers to do high performance work than it is to pay low performers to do low performance work.
You will know if someone is going to be a great fit for the culture of your team within a matter of weeks.
As soon as you know, you need to fire that person.
Keeping an employee on payroll when they aren’t a good fit is unfair to everyone. It’s unfair to the rest of the team, it’s unfair to the company and it’s unfair to the employee.
WHy keep him or her in a position where there is no future and no upside?
This doesn’t mean fire people who are green or lack experience. It means fire people who don’t fit the culture. You can teach people skills, but you can’t make people fit in to an ethos and a way of interacting.
It may sound harsh and it may require some difficult conversations, but trust me, it never works out. Avoiding these conversations will only make it worse over time.
My marketing agency has been one of the most rewarding experiences in my life.
People are always shocked to hear that out of all the companies in our portfolio, the agency is the one that makes the least amount of money. But the value in my marketing agency goes light years beyond income.
I have a team. I have a resource. I have a hive-mind and I have a network that provides me with countless opportunities.
David, Molly and Bryan were all in my wedding. I still have partnerships with Jeff. The possibilities are limitless.
If after reading this, you still believe you have what it takes to build a marketing agency, then you should go for it. My hope is that you can apply the lessons I have learned so that you don’t have to learn them the hard way.
There are no shortcuts. There are no hacks and there are no secrets.
It will take time. It will be a painful process. But if you persevere, you will put yourself in a position for limitless success and opportunity.
Time to get to work!