I’ve been in charge of the business development efforts at agencies AJ&Smart and ustwo, worked with some amazingly talented founders, marketing folks, and teams, and coached and consulted for dozens of agency founder clients over the last 9 years.
I’ve been privy to the many ways that agencies can win new business, sell their services, and find better clients.
While reducing all of this time and experience to a blog post might be a big ask, I do want to peel back the lid on what I’ve seen over the years, and demystify agency success. Winning agencies tend to have a few things in common, but they are often not what people think they are!
If you’re an agency or consultancy owner, managing director, or someone hoping to start an agency, I hope that this piece gives you the encouragement you need to approach new business with increased confidence and certainty.
Money isn’t everything, but it’s where it all starts
Want to do your best work? Find the best people? Say no to projects that don’t appeal to you? Sleep well at night?
That means one thing, and one thing only: stable, foreseeable revenue. Once you’ve got money in the bank, this will give you the freedom to solve your internal problems and do great work.
You don’t have to grow a massive business or be a billionaire, but you do have to spend money in order to make money. So, how do winning agencies achieve stable revenue? This is the million-dollar question. Read on to find out.
1. They find a primary revenue stream
There are many routes for agencies to stable, predictable revenue. Here are two that I see most commonly.
One (that is becoming increasingly desirable and popular) is to create a product or training that is sellable on a large scale. The team at AJ&Smart built their passionate, highly engaged community over a number of years, and when the time was right, created their Design Sprint Masterclass around it.
This allowed them to grow exponentially, invest in new hires that would support that side of the business, and sometimes run other business units at a loss.
ustwo built the award-winning mobile game Monument Valley, which created millions in profits and won every award under the sun, giving ustwo the breathing room they needed to run their design studios across 4 countries, hire the best talent, and offer them an extraordinary range of benefits, including eventually becoming an employee-owned business.
If you have a red-hot idea of a product, app or game that your team can feasibly build, market and sell, that’s great! These endeavours are often career-defining and deeply rewarding.
However, not every agency owner has a winning idea for a scalable product or service, and most don’t have the resources to execute on that idea. Building a scalable product is a whole job in itself, and will require the right talent, resources, and immense commitment.
In other words, this approach is not for everyone, and that’s ok! Agency work is exciting and rewarding, and can make a massive difference to clients.
Agencies that want to stick to client work often focus on finding and keeping a big, long-term client. I’ll make my point crystal clear so there’s no room for misinterpretation:
I believe every agency needs at least one enterprise-level client to succeed.
This means that, in my opinion, every agency should have a laser focus on securing a long-term, secure, enterprise-level client relationship, before they get to do the game-changing, boundary-pushing, award-winning work they dream of.
This might mean signing a retainer, or many projects inside the one organisation, or securing a large project. Whatever getting a big client on board looks like, it should equate to about 6+ months of work and revenue.
The stability and predictability of having this type of cash flow allows agencies to take on lower paying clients (like startups or NGOs) for what is sometimes the more fast-paced and exciting work.
2. They know their clients inside-out
So, you’ve signed your first big client. Congratulations! Whether you’ve secured a year-long retainer, or sold a project at a large profit margin, or signed a series of projects, this is great news.
You’ll now have visibility over your cash flow, increased confidence in your pipeline, and the ability to make real change within your client organisation.
Now, the fun begins.
As we all know, putting all your eggs in one basket is a fool’s errand. Having too much of your revenue tied up in one client is obviously risky! So while I encourage every business to pause and celebrate these moments, I also emphasise the importance of turning one piece of business into many pieces of business.
The best way to do this is to use your relationships with your new client to build out further projects in different business units.
This means you need to learn about your client organisation inside-out: their customers, their competitors, their challenges, their trajectory, and most of all, what success looks like for them, how projects and challenges are prioritised, and how decisions are made.
Now, I know as well as anyone that sometimes, the big clients have frustrating bureaucratic structures, but this is all the more reason to get on top of this now. Signing new business takes time, but the time you spend embedding yourself and your agency into the organisation will pay off.
3. They find the sweet spot between big clients and little ones
I promise you, if you’re focusing all of your attention on startups or small businesses, you are going to have to work much harder to make sure cash flow is consistent and the pipeline full. Why?
First, because less profitable, shorter-term projects means that you need a higher volume of leads and a more efficient sales process. Second, because these types of businesses simply have less money to spend.
Now, I’m not saying you should never work with startups. In fact, startups can offer a rare opportunity to build a product or service from the ground up, to work without bureaucratic red tape, to tackle a brand new customer or market challenge, and create faster, more visible impact.
Startups are fun—you work hard and fast—but as they are often backed by VCs, they have to account for every $/€/£ spent, and are under pressure to spend as little as possible.
Those that are in the early stages of their journey, or are pre-launch, often don’t have many (or any!) paying customers, so they are relying entirely on investment to keep the doors open.
Startups at the later stages of their journey tend to avoid agencies by hiring their own people. Even profitable, established startups like Canva tend to prioritise hiring their own talent over bringing in an external agency team. It’s more cost effective and, as a “sexy” startup with attractive salaries and benefits, they are easily able to attract top talent.
In other words, make sure you strike the right balance between having big name clients, SMEs, NFPs, and startups. Focussing too much on one vertical leaves agencies vulnerable to unstable pipelines.
4. They understand why businesses hire agencies
Agencies are often more expensive than building capability internally, and are typically seen as a short term solution. It’s a huge mistake to assume that companies have an endless budget to invest in highly skilled agency partners for every challenge they encounter.
Here are several of the key reasons that companies utilise agencies:
- They can’t find the right talent
- They want flexibility to bring in help if and when they need it rather than committing to hiring permanent staff
- They need specialised expertise and/or experience
- They have hit a major brick wall and need help getting out of it
- They have a hard deadline.
Yes, I know that many of my agency clients would do a much better job of a project than an internal company team. But it’s critical to remember that agencies are there to provide value to their clients, and that what value looks like is up to the client. Yes, I know you want to do a perfect piece of work. But the client might have other priorities.
So it’s vital to be empathetic and go beyond the project: how can you solve a real client need? Something that is important to them? How can you help your client to get a promotion, or gain visibility on a particular project, or learn and build their own capabilities?
It’s not about you. Focusing on client needs as both individuals and teams is the right mindset to adopt.
5. They know that service-based businesses are relationships businesses
Unfortunately, there’s no way to hack or market your way to strong business relationships. You have to put in the work. Some fundamental relationship mistakes include:
- Emailing someone when you see they’ve secured millions in new funding
- Trying to sell in the very first conversation
- Failing to provide value beyond paid services
- Only calling when you want something (ie. paid work)
Treat your clients like friends. Check in on them. Send them useful resources. Take them to lunch once in a while.
Don’t ask them for anything. Just be human—find out what’s on their plate, what’s keeping them up at night, what’s happening in their organisation. You don’t always necessarily need to know the names of their kids, but seeing clients as human beings instead of your next paycheck is the unquestionable first step in building relationships that last.
Having said that, a nice side-effect of this mindset is that clients are much more likely to refer you to future potential clients if you’re top of mind, and we should know by now, service-based businesses are often also referral businesses.
6. They have a bias-to-action
I’ll come out and say it. If you’re an agency with fewer than 15 employees, it’s time to forget complicated, overwrought strategy, and instead focus on getting your new business efforts out there.
Often, I see the creation of strategy used as procrastination. It’s easy to sit in a meeting room and try to very precisely plan how you’re going to get things done. It’s safe, it’s fun, and it feels a lot like you’re doing something, which sometimes you are, and sometimes….well, you’re avoiding doing the real work.
That is, reaching out, making calls, launching campaigns or content, and having real conversations.
So, when you’re thinking about how to approach your strategy internally, remember that strategy isn’t about creating a perfect plan of attack. It’s finding opportunities and strengths to leverage, as well as uncovering weaknesses to either neutralise or remove focus from.
Great at talking and grabbing attention? Make some videos. Love doing research? Put together a trends report. Hate spending time on social media? Make ten coffee meetings with new people. Whatever works best for you, double down on it, or delegate the stuff you can’t get your head around to someone else.
Overall, getting things done (and, as importantly, getting them out there) should be your top priority. Set tight deadlines, generate activity every week, and if you can’t maintain a habit, then it’s time to find a new approach.
7. They are consistent with their new business activity
There’s no magic bullet when it comes to bringing in new client work. In fact, it’s often the businesses that do one thing consistently that see the strongest results.
First of all, doing random, disparate lead generation activities, and lots of them, is a sure-fire way to confuse your customer and remove any opportunity to actually know what’s working. I advise my clients to run their lead generation activities for a minimum of 2-3 months, not only because that is the amount of time it takes for these things to work, but in order to get a strong idea of whether it’s working.
Secondly, it’s very easy to think “I don’t have time to do new business stuff right now!” But running an agency means sowing seeds for future conversations all the time. I’m talking every week of the year.
If you haven’t done something to open up new business conversations this week, then you run the risk of hitting a wall in a few month’s time. Think of new business like exercise—there’s no point only doing it once every few months. You must commit to it on a weekly basis at the very least.
Besides, popping up in someone’s inbox only when you want something is pretty transparent. Build a habit around reaching out to new folks, checking in with your current network, and maintaining a steady marketing output. There is nothing to lose by doing this, and everything to gain.
8. They have crystal clear positioning, and services that solve real problems
Last, but certainly not least, are services and positioning. In other words, what you offer, why you’re the preferred provider of these services, and why clients should trust you with their challenges.
I’ve been working directly with agency owners for the past 4 years, helping them to sell their services better, find the right type of clients, and create consistency in their sales process. The non-negotiable starting point for all of these outcomes is clear positioning and enticing services, yet it’s almost always the most frequently overlooked.
You’d be surprised how many agency owners are unable to efficiently describe what they do and why a client should work with them. Whether you’re at a networking event, on a sales call, asking for a referral, or hiring a new member of your team, you must be able to explain what you do and why it matters.
Without clear, compelling positioning and services, agencies face marketing, sales, and execution challenges that will ultimately cripple their growth.
One of the most common mistakes I see?
That’s simple: businesses that try to replicate the strategies of another company.
While many businesses have enviable levels of success, that doesn’t mean that this strategy or business model can be copied. There are so many variables at play when a business wins - from having great talent, to a favourable market, to random good luck - so don’t assume that what you see on the surface accurately reflects what’s happening behind the scenes.
It can be a good idea to borrow strategies and tactics from successful businesses, and it doesn’t make sense to reinvent the wheel, however the circumstances around your business are unique, and should be approached with originality and open-mindedness.
Penny is the founder of Company Studio, and along with a small team helps digital businesses communicate and sell their services more efficiently and effectively. She is also a writer of fiction and nonfiction, and competed as a gymnast at the Athens Olympics in 2004. Find out more at company.studio.
