In our most recent Accelerate Your Business webinar series, we covered the topic "Agency Growth: Balancing Efficiency & Profits." Check out the recap or watch the webinar video below to review some of the highlights.
Our Co-Founder and CEO, Geoff McQueen, was joined by co-host Zach Reg, the Global Agency Director at WordStream. The two shared critical insight from years of personal industry experience into how agencies can balance efficiency and profitability while still establishing a culture of proactive client success to not only retain but grow customers.
"Generally speaking, a lot of your new business comes through referrals, and so you need to make sure that you're doing great work, doing it profitably, and doing it in a way that makes your clients not just financially successful, but also really proud that they chose you as their partner and trusted advisor in the work that you do." - Geoff McQueen
You always want to deliver the best results to your clients, but sometimes that can cost your agency more than you originally thought. Think about all the stuff your agency already has to do, as your business achieves more success and grows, you now have to do more of it. As a result, you might even start to see some reductions in terms of your gross margins.
Only 49% of agencies say they measure profitability per client. Even worse, only 24% report all the way down to an employee-level. So, if you get your economies of scale right with a system, then you've got the opportunity to start to grow the bottom-line at the same time or even faster than you're growing the top-line.
With a Profitability Dashboard, you have the ability to see real-time profitability.
The benefits include:
In addition to being more efficient from a cost perspective at the top end, having a system in place makes sure that as your business scales, you can drive more revenue and have control over your gross margins. As well as enables you to run the campaigns on an ongoing basis, interact with your clients, optimize, and create value.
Your employees are a key part of your investment. It's important to think about the utilization and performance of the success of individuals and where they're spending their time. By taking care of a lot of the operational system components, you're able to see this benefit of productivity.
With a Utilization Dashboard, you have the ability to see individual utilization and performance.
The benefits include:
Start setting up a success and growth path toward, account managers or CSMs, client service managers as a profit center by auditing an account when it's presented to you. Whether this is a client referral or you're trying to get a potential client to expand into a new network, you want to identify industry benchmarks.
Set yourself up for success and use performance graders to grade your campaign performance to help understand where those next areas of improvement and potential can be.
Once you set up conversion tracking, as their spend grows, you will want to expand into new areas. Discuss early on what you're thinking about for that growth path and that roadmap that you've created, so you're setting up conversion metrics for all of the above.
Next, take a look at the account structure and budget. Make sure to have well-broken-down ad groups in campaigns that have the right amount of budget allocated based on the cost-per-click per day, so that you're driving almost even amounts of traffic across the campaigns.
This allows for your CSMs to open up their AdWords account or Bing accounts, drill into the campaign that's going to have the highest impact for the client or the one that's struggling, and know exactly why they're working.
Now it's time to convert into revenue. You can blend two models together - charge that flat monthly recurring fee, which provides stability plus the percentage. We want this to be a tiered system to stay competitive in the marketplace, allowing our agency's budget to grow, and if we set up our campaign structure correctly, there's not too much additional work going into it.
It becomes increasingly more important to set up a specific campaign and ad group structure that's built for scale because as we increase the results, the client's going to ask us to increase the ad spend. The goal here is to increase the results, the ad spend, and the revenue, while maintaining that profit margin by saving time and building that groundwork for success through automation.
To save time, that really starts with understanding where your time is being used. For agency customers, reporting is the best way to identify what tasks are taking the most time and who is at full capacity.
Track time to complete tasks
Automate tasks that do not directly impact results:
Restructure accounts to efficiently optimize on a weekly basis:
With everything you set, make sure your CSM is speaking and communicating with their clients as often as necessary. If you want to come with new growth opportunity, for example, take an AdWords account and put it on Bing. Your customer will appreciate the added value you're offering and love that you're going above and beyond to provide a strategic recommendation for continued exposure and expansion.
You always want to be zeroing in on results, and that goes with that weekly reporting. Next steps some agencies take include identifying and tweaking button calls to actions, colors, headlines, looking at maybe implementing popups or banners on the site to try to get that last-ditch effort to convert the great quality traffic that you sent there. When you build pages for the client, it provides a great long tail of results and allows you to charge for that ongoing conversion rate optimization.
