Behind every successful business is an entrepreneur with a winning positive mindset. The opposite of this is true too. Think you can’t be successful? Think you can’t grow? Think you can’t outperform your nearest competitor? Then I guarantee you won’t!.
I cannot tell you how important this topic is. It isn’t some wishy-washy trendy topic but a core discipline that separates the successful agency owners from those who are stuck or fail. A seemingly small thing that makes a huge difference.
You can have the right marketing strategies, the best products and interested, invested customers, but without the right mindset, none of it matters because you will stay stuck and frustrated.
We tend to have a cognitive bias towards negativity and focus on failure. Negative thoughts limit your possibilities, undervalue achievements and breed more negative feelings. This can pave the way to a serious lack of confidence and underperformance. Change the thoughts and you will change the feelings. Change the feelings and you will change your behaviours.
Entrepreneurs with a positive mindset, however, tend to have a better outlook on life, they keep moving forward and pushing through even when setbacks arise (and they see a setback as a learning opportunity). They have learned the fundamentals and thus developed the correct mental attitude to achieve their goals. The right mindset can help you make the most of a bad situation, and move forward with confidence and clarity. Mindset training is vital when it comes to success.
I am not trying to be too spiritual when I talk about the laws of attraction. It simply asserts that positive thoughts attract positive outcomes while negativity begets negative outcomes. Whilst the ideas have been around for millennia, the laws of attraction have received a lot of attention in recent years with some people swearing by its effectiveness. It doesn’t matter if you believe in it, there are lessons entrepreneurs can learn from its core message. Focus on clear goals can create the kind of positive attitudes that motivates long-lasting business success.
I have seen people who miss colossal opportunities by attracting the wrong things to their agency thanks to their persistent negative thinking. Their companies are now at risk of failing because their leaders have not incorporated the law of attraction into their everyday actions and thoughts. As a leader, you must envision yourself in the place you want to be and then work towards getting there. In practical terms, this is as simple as creating an exciting vision for your agency and hanging onto that vision no matter what curveballs come your way!
The Secret is a great short read and fundamentally teaches about a positive mindset envisioning how you want the future of your agency (and life) to be. It can be empowering for those of you looking for some encouragement as it guides you to get into a better frame of mind in order to be thoroughly motivated to pursue desired goals. There is, after all, a lot you can do to alter your circumstances even if things seem bleak. You must visualise your goals first in order to attract what you want. Although you may not detect what lies ahead, perseverance and belief in oneself are key.
One of the ways in which you can thrive and grow as an entrepreneur is to take yourself out of your comfort zone. Do you ever have big lofty goals but talk yourself down to something that is more “doable” or “practical” because you are not sure or too fearful to stretch outside your comfort zone? This mindset will keep you safe but will also stop you from achieving what you truly want in life. And there are three zones that we can step into - a comfort zone, a learning zone and a fear zone.
Your comfort zone is an established pattern of thinking. This is where we have a heightened sense of security and control. Many people decide to stay in the comfort zone because they may be fearful of stepping out into the learning zone. But you will not develop if you are too comfortable. Once you leave your comfort zone, it will feel scary but you learn and develop and before you know it, what you feared becomes part of your comfort zone. Once you enter the learning zone i.e. the zone of awareness of the vast opportunities at your disposal, you will learn new skills and be better equipped to deal with whatever challenges come your way. In the end, you will realise the journey was not really about getting out of your comfort zone but expanding it. Between the comfort and the fear zone is space where optimal learning, development and progress take place.
If your mindset is to think small because you are one-man-band and believe your only option is to do all the work yourself then (a) you’ll never grow and keep perpetuating this thinking and (b) in the end you’ll become the bottleneck to your growth. Remember, thoughts lead to feelings lead to behaviours. Change the thought to change the behaviour.
I always tell my clients to think about how much of an hour of their time is worth and then to question whether the task they are doing is at the hourly rate or lower? If it’s lower then they should consider delegating the task. Now delegating doesn’t necessarily mean you need to have a member of staff, you could be outsourcing the work by hiring a VA or freelancer.
Just remember that if you “play small you are gonna stay small”! Your mindset needs to be “I want to delegate as much as possible - leaving me to do the things that I can only do - which are the strategic activities that move my agency forward. Everything else needs to be delegated, automated or ditched.”
Confidence in yourself and the service you offer is key. Do not underestimate the value of what you offer. If you do, it is going to be even more challenging to authentically convey the value to potential clients and ultimate sell a service or product that you believe in. If you have the mindset of being a small player in your marketplace or believing you can only target small clients to provide your service to, then that will all you will ever have.
I see this time and again with agency leaders - when they have a narrow mindset, they end up targeting companies that keep them in the comfort zone which translates to small fees, small projects, and bashing your head against the brick wall! If you believe you can provide a fantastic service to the top end of your market, (not necessarily large companies but customers who will value your service) and then have the confidence to target these clients in your sales and marketing efforts, you are going to be taking significant steps towards delivering your vision.
Knowing what to charge and then confidently asking for it can be challenging. But not with the right mindset. I often work with clients who have been undervaluing and therefore underpricing their services. It’s easy to put your head down and never properly consider the impact your product or service creates for your customer. This has, in part to do with the fact that often the agency is selling the wrong thing i.e. time or tasks rather than outcomes and impact.
The more aware you are of the value you deliver your clients (the unique and visible benefits you offer your customers), the greater your ability to charge what you are really worth and attract new ideal clients. If you ever doubt yourself, ask yourself this - “what are the core benefits my clients experience by working with me?” Value-based selling increases, not just the price the purchaser is willing to pay but also the likelihood of the sale in the first place. It assures customers they are making a worthwhile investment of their money.
Value pricing offers a formula for a profitable stress-free agency. If we have a mindset of “I am not worth that much” or a mindset of worrying that “the client will think it’s too much” then, of course, we will undervalue what we do. Yet with a value-based mindset, we will be able to charge higher prices, focus on the value to the client and look that prospect in the eye and say “this is how much I charge because I know I am worth it”.
A great leader with a winning mindset will recruit the best staff. The leader with a positive mindset isn’t threatened by top-notch, fantastic staff but delighted to be able to delegate as much as possible and have them chomping at the bit to take on more. Yet I have seen people hiring the 2nd best candidate just because they will be easy to manage and they feel less threatened by them. You need to hire the best people you can who know how to get the work done, be responsible and accountable, meet deadlines and challenge you with their ideas.
Without a sense of purpose or vision, you wouldn’t be able to communicate a set of cohesive goals for your employees to work toward. Your vision should be exciting and communicated with passion and belief. If you are not 100% confident your staff will pick this up.
Be agile enough to incorporate changing market needs and be open to listen to and act upon suggestions from your team or other trusted partners. You must be able to react quickly to changes and in turn, create a workforce who is willing to do the same. This world increasingly requires searchlight intelligence. Never let curiosity go to waste, always look for new knowledge, thinking patterns, innovative courses of action and skills from you and your team.
Continue developing your mindset - it never ends
As you have seen throughout this article, a positive mindset is vital to your success. Your mental toughness determines whether you can dig deep and work through numerous challenges or simply retreat and admit defeat. That’s what distinguishes a winning mindset from a losing one. Entrepreneurship starts in your head, and the winning mindset wins it all. Having the right entrepreneurial mindset will naturally encourage creativity. And your customers and team members will always trust those who seem to know what they are doing and are confident. Above all, a positive mindset means you are willing to make mistakes (& learn from them), take risks and hang on to your exciting vision, no matter what.
In part 2 of this blog, I am going to share with you 9 strategies to help you develop and sustain a positive mindset.
Want to continue learning about mindset?
It's one of the components of the Agency Accelerator hybrid coaching programme.
Register your interest for the 2020 Programme and get early access when the doors open in May 2020
We’ve covered a lot of ground in this 2-part article. If you’d like to have a permanent copy for easy reference, just click the button below.
During one coaching session I talked to an agency owner who lost some top-performing employees within a short time frame. During their exit interviews, these employees assured the owner that it was nothing personal - they were leaving to pursue evolving career goals.
It’s an explanation that people always use when they don’t want to get into the details. How many times have you had to tell a non-performing employee that “It’s not working out?” In this case, they are essentially telling you the same thing.
If you wait until key employees leave to find out why they chose to move on, you’ve lost two golden opportunities:
In this second part of a 2-part series on recruitment and retention, I would like to discuss why employee retention is so important, common reasons why people leave, and how you can make your agency a place where people are eager to build their careers.
Like other agency owners, you need quality talent and stability in a tight economy. Losing a member of staff can be very disruptive and stressful (for those who have to pick up their workload). Another reason why retention should be at the top of your agenda is that the cost of turnover is high: depending on the employee’s position, you could be spending up to 2.5 times their salary to replace them. Given the fact that the average turnover rate in UK agencies is around 20%, costs can quickly become prohibitive.
There are also other costs, like reduced productivity and disengagement among your current workforce, some of whom may ultimately decide to leave too.
The good news is that talent exodus is not inevitable. Although people can and will leave for reasons beyond your control (and which have nothing to do with your agency), there are proven ways to increase retention, and they start after you say, “You’re hired.”
In part 1 of this series, I explained how retention starts during the recruiting process. From reviewing CVs and screening applicants to conducting first and second interviews, you seek candidates who are a good cultural fit and have career goals that mirror what your agency has to offer. This involves:
After weeks (maybe even months) of interviewing, you find the right person. You make the offer, they accept it. Now you can rest easy.
Not so fast. This is when the challenge begins, not when it ends. It can take new employees an average of eight months to get up to speed, and to make the transition as successful as possible, your agency needs a strong induction process.
Starting a new job can be an exciting yet stressful experience for anyone. When you have a process in place that introduces them to colleagues and outlines what their first few weeks will be like (down to the nearest hour), you’ll raise their confidence and set them up for success.
Recommended steps include:
It is important to have realistic expectations. Even the most experienced employees need time and support as they settle into their new roles and understand how your agency operates. Clarify what you want them to focus on and achieve during the probationary period, and keep the momentum going until you know for sure whether or not they’re going to work out. If you take a formalised pragmatic approach to onboarding a new employee then you should never have to extend their probation period.
Your new hire has passed their probationary period and joined your team. Congratulations! Now you need to give yourself the best chance of retaining them for the long-term. Proven retention strategies include:
Keeping an excellent new employee means that you have to be smart. To be more precise, you need to use SMART objectives that establish a definite roadmap for their career progression. Vague and ambiguous goals don’t provide the direction needed to inspire top performers - they need to know what’s expected, when, and how you want them to achieve those objectives. I guarantee that a vague ambiguous objectives will lead to misunderstandings and frustration so take the time to get this right.
Below is an overview on how this acronym (which stands for specific, measurable, attainable, realistic and having a set time frame) can apply to performance management at your agency.
The meaning of SMART
Succeeding in your employee retention efforts requires you to think about what matters most to your team. While everyone is different in terms of goals and values, practically all employees want the following:
Think about what retention incentives you can put in place. Successful strategies include:
Sometimes turnover is inevitable. People will leave for personal and professional reasons, but you can minimise the impact on your agency by implementing a succession plan that enables vacancies to turn into growth opportunities for existing staff.
An effective employee retention program should start on a new hire's first day on the job. The training, support, and incentives that you provide from Day One can boost job satisfaction and set the stage for a long tenure at your agency.
As always, I hope that you enjoyed this article. Using the strategies, insights, and tools that I’ve discussed here, I’m confident that you will be able to:
If you have any questions, please leave me a comment below and I’ll be happy to respond.
This is part 1 of a 2 part series on recruitment and retention. This article focuses on the recruitment process and part 2 will focus on retention strategies.
We’re going to cover a lot of ground in this 2-part article. If you’d like to have a permanent copy for easy reference, just click the button below.
I hear this every day in my coaching practice. Agency owners hire new employees who either don’t make it past the probationary period or leave before their one-year anniversary is up. In some cases, an agency goes through hours of interviews without feeling confident enough to extend a job offer.
It’s true that currently it’s super challenging to find good people, especially in an uncertain economy. When overall conditions are bad, everyone clings to their job like a life raft. No one’s going to jump ship when the chances of sinking are too high. When times are good, there are more opportunities for them to choose from.
Many agencies believe that their location is a key barrier but truth be told, it doesn’t matter where you’re located. If you’re in the city, there’s a bigger talent pool but a lot of competition from other employers. In more rural areas, your hiring choices are more limited and, even if you extend your reach, you may not find someone willing to relocate.
Chances are that as an employer, you’ve been through this seemingly endless cycle of job ads, CVs, and job interviews that are soon followed by exit interviews or no hires at all. Not only is it frustrating, but it’s also expensive and can affect morale among staff who have to shoulder extra duties until you bring someone else on board.
How can you fix it? By optimising your recruiting process.
A streamlined and consistent hiring strategy is a vital element in any successful recruiting programme. When you can access the right talent, set up interviews promptly, and extend the job offer soon afterwards, you can realise the benefits outlined below.
According to the Society for Human Resource Management, whenever a company replaces an employee, it costs an average of six to nine months’ salary. If you’ve engaged a manager at £40,000 a year, that's up £30,000 in recruiting and training expenses.
The cost of unfilled positions is also significant. A vacant revenue-generating role, such as an account manager, represents money lost. If you have to pay freelancers to do the work in between hirings, you could be facing high costs. Lost productivity and diminished quality of customer or client service can also translate into reduced company earnings.
These are all financial challenges that can be eliminated when you use a more effective recruiting strategy.
When you have access to higher-quality candidates and can present them with a job offer soon after a successful interview process, you can prevent competitors from scooping up the talent that could take your company to the next level.
The delay between interview and job offer is bigger than most employers realise. A survey by the Accounting Principals revealed that over half of the U.S. hiring managers and HR personnel polled said that it took them over a month to complete a typical hire. In the UK, it can take up to three months. When an ideal candidate waits too long to receive a job offer, it gives a poor impression of your agency and increases the likelihood that you will lose top talent to a competitor.
Poor hiring decisions can have legal consequences. If a new hire doesn’t work out, they may accuse you of misleading them into accepting a role that wasn’t a good fit or claim that you dealt with them in bad faith, or the way you exited them was not fair. Since dealing with employment tribunals can cost a UK employer £8500 on average, preventing a wrong hire in the first place can protect your company’s bottom line as well as its reputation and internal staff morale.
These are all reasons why you need an optimised recruitment strategy. Now let me show you how to make it happen.
Be clear on what you want before you start looking. I’m not talking about the job description, which you probably know by heart. I’m referring to the ideal candidate.
Candidate profiles are blueprints that map out your preferred skills and personality traits for the role. Do you want someone who is an independent thinker? Savvy on social media? An outgoing people person? I liken these profiles to the customer personas that sales and marketing professionals use to define the ideal customer for their product or service.
An accurate and appealing job description can attract candidates with the right hard skills, but soft skills are equally important, and a candidate profile can help enhance the quality of your shortlist.
If you’ve ever had to sift through tons of rubbish CVs, you know what a huge time waster the DIY hiring route can be (both in terms of your time and ultimately, money). This is not a time when you want to be cutting corners: working with a recruitment company will save you time and money.
Many of the most successful agencies use recruitment companies to assist them in finding and keeping top talent. Reasons include:
Access to the quality candidates. Recruitment agencies can help you reach both active and passive candidates. Those who are actively looking for a new job tend to register with agencies, who often have access to highly-qualified passive prospects who could be tempted to join your team. In addition, these companies know how to optimise a vacancy advert so that it ranks highly for the appropriate job search.
Shortlisting management. A recruitment agency will sift through all incoming CVs for you, rejecting unsuitable ones and responding to any queries about the role. You won’t have to waste your own time and resources dealing with unproductive hiring duties.
Assistance with speciality occupations. Sometimes you need an employee with a unique or specific skillset. Engaging a recruitment agency that understands your industry can ensure that all shortlisted candidates will be fully qualified ones.
Many recruitment agencies also offer specialty services such as salary benchmarking, which helps ensure that you’re offering a competitive wage, and psychometric tests, which give unique insights into the natural talents and abilities of prospective hires.
Now I acknowledge it can be hard to find a great recruitment agency so make sure you meet several and pick one who ‘gets’ your market space and doesn’t over promise.
When the agency has sent you a list of pre-screened candidates, it’s time to interview them. If you’ve worked with a reputable agency that understands your needs and your industry, you can feel reasonably certain that you’ll be interviewing people who have the necessary education, experience, and qualifications for the position. Now you want to focus on who they are, and why they should want to work for you.
Here are some tips for conducting a strategic interview.
Avoid the standard questions. If possible, avoid typical questions like “Where do you want to be in five years?” or “Tell me about your proudest accomplishment.” Chances are that you’ll get a rehearsed response. When you ask something that they won’t anticipate, you’ll have a good idea of how they deal with the unexpected. Do they freeze and stutter? Or do they think about the question before giving a good response?
Have them expand on their answers. In most cases, the first answer they give you is one that they’ve practiced. Encourage them to expand by remaining silent or asking, “What else?” Unrehearsed answers will give you insights into how they really think, especially under pressure. Silence can be your friend here – if you don’t fill the gap then they will (a tip I learned from my PR days and a tool that journalists use to get the juicy inside gossip!).
Obtain practical information. Scenario-based questions are an excellent way to anticipate how the candidate will react to a variety of job-related challenges. If you say to a prospective manager, “How do you motivate an employee who is underperforming?” you’ll have a better understanding of how they manage people. In addition, questions like “What obstacles did you face on your last project and how did you overcome them?” can give you insights into accomplishments that may not be on their CV. Also don’t be afraid to ask them to do some ‘homework’ and have them present to you (and dig in to understand HOW they went about preparing the presentation)
Screen for cultural fit. Every agency has its own culture, and ideally you want to hire someone who shares the same values as the company. They’ll be more engaged, and studies have shown that an engaged workforce can improve business performance by 30%.
Don’t forget to sell yourself and the agency during the interview too. A key part of your company brand is the benefits that you offer, such as:
Don’t forget the emotional benefits too. Tell the candidate why your employees enjoy working for your agency. Talk about any valued traditions, such as sports teams, volunteer organisations, and employee-driven initiatives. You can even have one of your employees join in at this stage of the interview to share their positive feelings about their job and the company.
If you feel positively about a candidate, don’t wait too long to extend an offer. According to ERE, the highest-quality job applicants are off the market in an average of 10 days. If your company waits too long, you’re going to miss out.
As an employer, you may be wary of making a quick hiring decision, but if your preferred candidate is going to be in high demand because of the value they will add, cut out any unnecessary stages of the recruitment process and be prepared to hire sooner. High performers in the top 5% of a company’s workforce can deliver 26% of its total output.
Finding top talent presents a challenge for employers across the globe. While the right hire can make a huge and positive contribution towards the development of your company, the wrong one will hold it back. By optimising your hiring process, you can source the top performers needed to stand out in the most competitive industries.
I hope you found this article useful. In the next one, I’ll discuss the ways that you can increase employee retention and develop a work culture that increases loyalty and job satisfaction. In the meantime, if you have any questions, please post them below and I’ll be pleased to answer them.
This is part one of a 2-part series on recruitment and retention. In the next installment we are going to focus on strategies to keep your staff for the long term.
I want to share with you 2 recent podcasts that I have been interviewed on. I know you will find them really useful (& get to know me a little!) since they cover two of the biggest topics I frequently talk with clients about:
(interview with Lee Jackson from Agency Trailblazers)
(Interview with Bob Gentle from Amplify)
I know you will find them useful and I love to hear from readers so please leave a comment below and let me know whether these are challenges for you too?
Your Free Download
We’re going to cover a lot of ground in this article. If you’d like to have a permanent copy for easy reference (plus access to an exclusive One-Page Action Plan to help you put this information into practice right away), just click the button below.
Most agencies go through the “Feast or Famine Cycle” at some stage in their development. But it’s only through learning to break free of this cycle that you can take your business to the next level, scale it to greater heights, and reduce the stress you face every day as an agency owner.That’s why this month, we’re going to dive deep into how you can put a strategy in place to break free of the Feast or Famine Cycle for good.
Let's start with a definition of “The Feast or Famine Cycle”:
When you don’t have a full order book, you’re compelled to try everything you can to win new business. If you do the right things (a topic for another blog) then the process of focusing on biz dev eventually brings you to a place where suddenly, all your time is taken up with delivering work to clients. For a little while, things are going great!
This is the Feast part of the cycle - where you have plenty to eat with no clear end in sight. And because you have enough work to keep you occupied, you stop pushing quite as hard in the area of biz dev. You have no time and right now it’s more important to service current clients than to look for new ones.
But there’s a cyclical rhythm to all things in life, and your business is no different. Big projects end. Unexpectedly, you lose a client through no fault of your own and your order book depletes. Before you realise what’s happening, you’ve been hit with a business famine.
Wondering how you’re going to pay your mounting bills, you take on any work you can get (even if it’s with the wrong kind of client, or heavily discounted). And through your rekindled dedication to the process of winning new business, you eventually put yourself back on the path to feasting once more…
And thus the cycle begins all over again.
You’ve probably experienced this before: it can happen at any stage of an agency’s growth. Many solopreneurs/new businesses are hit with this in their first year or two of business… but honestly, it could strike at any time if you’re not careful about avoiding it.
It’s something I’ve seen many agencies struggle with in my time as a coach. And to be super honest, it’s an issue I’ve faced too.
My first “famine” hit when government funding my clients had relied on disappeared overnight, taking over 50% of my monthly revenue with it.
After that happened, I had to have a tough conversation with myself. This feast and famine cycle with my coaching business was much too stressful to sustain - something had to give.
I dug deep and committed to a more strategic approach to business development… and using that, I was able to build much-needed stability into my business.
I know that consistency of business is a key issue of challenge for agency owners everywhere:
These kinds of setbacks can completely derail your business if you’re not careful. And although you can recover from them, there’s no good reason to subject yourself to this stress on a repeated basis, if you can avoid it!
Specifically, here’s what we’re going to talk about:
I can tell you it’s possible to stop this cycle repeating - and in this article, I’ll show you how in five easy steps.
P.S. Want to download this whole post as an eBook? Just click the picture below to get instant access (plus an exclusive One-Page Action Plan to help you put this information into practice right away).
As we covered in the introduction to this topic, the Feast or Famine Cycle is an issue that plagues agency owners everywhere...
But through working with hundreds of agencies over the past 13 years, I’ve learned that there are certain telltale signs that point to the Feast/Famine Cycle being in full effect. And in helping my coaching clients to identify these signs, they were able to solve their problems & build some much-needed stability into their businesses.
Remember, I’m not delivering any of this advice from up on my high horse. I suffered through a few business famines of my own before getting to grips with these concepts - but believe me, this is worth the effort.
The Feast or Famine Cycle is characterised by an agency that fluctuates between fully booked and completely under booked. When things are good, they’re great! But when times are bad, their agency is in serious danger of going out of business!
In my experience, I’ve learned that a business which fails to keep a consistent focus on biz dev (even when they’re fully booked) is one that’s in danger of experiencing a stressful famine if some bad luck should happen to come their way or just through the natural life cycle of a client.
This is Risk Management 101. We’ve all heard the old adage that we shouldn’t put all our eggs in one basket. If something happens to those eggs, or a few of them fall out while you’re carrying them, it just makes good sense to have some spares to replace the broken ones.
Similarly, an agency with its back against the wall is at risk of making very poor decisions. The cash flow issues that arise from a few big clients parting ways with your firm (for whatever reason: successfully completing a project, the client needing something different than what you can provide or just feeling it's time for a change) incentivise you to go out and chase after any business you can find. Even if the client is a poor fit, or you have to discount your rates, you might justify working with them as necessary to your survival - after all you have bills to pay and mouths to feed.
But because you’ve taken on work that’s not a great fit (or because it’s not very profitable), it’s difficult to please those clients. So you have to focus extra-hard on delivery…
And naturally, you’ll start to reduce your biz dev efforts, as all your time is needed to satisfy these existing (and potentially, wrong type of) clients. And before you know it, the cycle has begun anew.
When I begin working with a new client, I immediately look to see what kind of business development processes they have in place. Even if things are going great, they need to pay attention to this: I’ve seen too many agencies suffer needlessly because they neglect to keep their pipeline filled.
That’s the single most telling sign of an impending business famine - a lack of focus on good diz dev practices. But of course, there are many things that demand your attention as an agency owner. With everything you have to do in the day, it can be hard to find the time to keep inquiries coming in.
That’s why you should familiarise yourself with…
If you take a step back and look at what you do in the business on a day-to-day basis, you’ll probably find that all your tasks relate to one of these three areas:
And when we dig in to where you’re spending most of your time (using the time-tracking exercise I’ll outline in just a minute), you’ll probably find that you’re spending far too much time on activities you don’t really need to be doing (e.g. client work that could be delegated, time-consuming admin, etc.)...
And not enough time on the vital tasks that will help you to break free of the Feast/Famine Cycle once and for all.
We have to spend a certain amount of time tending to each of these areas of business each week to keep things running smoothly, of course - but it’s the question of how much time that makes all the difference.
Now, you might have read the above and realised that you’re not quite sure where your time is going each week. If so, that’s fine! Because I have a very simple solution, while we’ll cover in the next section.
As I outlined above, there are three main areas of your business that you have to pay attention to as an agency owner. Simply put, these are:
No matter what kind of complicated labels we try to apply to our work, pretty much everything we do falls into one of these three categories. But while each of these areas matters, they don’t all matter equally. Particularly not for you: as the agency owner, your time needs to be spent in a deliberate manner for maximum impact.
When I ask my coaching clients what their weekly schedule looks like, they’ll often point to their calendar and show me a list of appointments they’ve kept. But there are lots of gaps in that kind of system, and it’s easy to think you’re spending time in one way, when in reality, it’s completely different.
To overcome this problem, I like to have my clients complete a simple (but highly effective) exercise to track their time.
I don’t need you to track every minute detail of your day. Instead, I ask my clients to reflect on how they spent their time at the end of the workday on a daily basis for 2 weeks.
As for what I ask them to track - I get them to think of their work as being made up of three main types of activities:
Once per day, they deliberately cast an eye back over their work and see how much time they spent in each area of their business. I’m looking for either a rough ratio (e.g. half a day spent doing x), or a rough number of hours per day (e.g. four hours spent on admin)...
And once we have a decent picture of how they’ve spent their time, we can figure out the proportion of time they dedicate to each area of their business.
This is an enlightening exercise for many business owners. If you think you have no time to spend reaching out to new clients, but then learn that you’re spending 30% of your time on admin tasks, it’s easy to see what you should focus on fixing.
Odds are that your current ratio isn’t as good as you’d like it to be. So how can you go about improving it?
If your agency isn’t where you want it to be, it’s probably because you’re spending too much time on Revenue or Admin activities, and not enough time on Strategy.
No matter how busy you get in these other areas, it’s important to remember that, as the agency owner, you have a responsibility to spend your time wisely. The growth of your business depends on it.
The ratio of time you spend in each area will vary depending on your particular situation. However, as a rough rule of thumb, I’ve found that a 50%/40%/10% split between Revenue, Strategy and Admin is a good goal for most agency owners to aim for. Whatever your ratio is, the exercise above will probably show that you’re not quite there yet. Luckily, there are a few different things you can do to improve it.
One of the biggest things overworked agency owners struggle with is delegating work. Learning to give up total control over the day-to-day stuff (like client deliverables, managing finances and more) can be painful, but it’s a necessary step if you want to free up more time.
You have some different options at your disposal for delegating work:
Fundamentally, it comes down to figuring out (and being honest with yourself) as to what only you can do. For anything else… you need to consider whether you let someone else do it, or if you’re just holding on because you’re afraid to let go of it.
A mindset shift many of my clients find valuable is to consider their target hourly rate. For instance, if they value their time at £100 per hour, there’s no good reason for them to do work that they could outsource for £25/hour.
Look at your schedule, and identify how you can start moving towards your ideal Time Pot Ratio. Automate, delegate, or stop entirely - do whatever it takes to get closer to your target. Getting disciplined at sticking to this time split will help to ensure your limited time is being put to its best possible use.
To make tracking your time in this manner as easy as possible, I’ve created a simple template for you to use (see the Resources section below for more info).
Of course, figuring out your ideal time split is just the first part of the equation. The second part is to then figure out the best things to focus on in those given time periods.
Once you’ve determined your ideal time split, it’s time to focus on the most important activities you can complete in order to maximise your impact in each area of your business.
When it comes to Revenue activities - this is all about client delivery. This is probably an area you excel in as an agency owner. After all, you set up your own business because you were so good at delivering great work to your clients.
As you already have a good grasp of these activities, I’ll just give you one takeaway tip...
Don’t be the bottleneck in your agency. Make sure the brand is not YOU! Otherwise every client will want YOU to work on their account and you will never be able to delegate work to your team. I have seen this issue time and time again. What helps you get your agency going and growing (YOU) because the very thing that stops you growing.
How do you overcome this? Introduce team members early on, let them build credibility with the clients. And in the end, push the client to that member of your team (don’t think ‘it's quicker to do it myself’), even if they are asking for you.
Admin is an area that many agency owners dislike, but most understand its importance. However, there’s more to Admin than just signing paperwork and conducting weekly staff meetings.
In my experience, the three most important Admin activities you need to attend to are:
Ensuring invoices are sent on time
Monitoring your cash flow to spot any potential issues arising
Managing staff effectively, so you retain top talent in your agency
We’ll cover each of these areas in more detail in future articles and videos. For now, let me make a few quick & easy recommendations relating to the above.
First - there is a huge number of software products on the market that will help you to get invoices out on time. Accounting packages such as Xero and Quickbooks are fantastic apps that are easy to use and integrate directly with your bank account. And when you combine them with a powerful CRM like those offered by Pipedrive or Zoho, you can easily streamline this process for good.
Aside from this, make sure you set aside a block of each month to send out your invoices, and have auto-reminders set up so you can chase late payers. If you are so busy delivering client work that you have no time for invoicing (yep, i have heard this before!) then you are setting up future cash flow issues for yourself.
Managing your staff effectively is a huge topic, but one principle I’ve seen many successful agency owners abide by is to touch base with their staff every week. Ensure everyone is on the same page as to objectives (and ensure they are SMART objectives) and they all know the agency’s (and client’s) priorities.
Of course, this is more doable in a smaller agency. If you have a lot of staff, then make sure to delegate it to a manager. Either way, making sure someone has their finger on the pulse will go a long way towards keeping top talent and clients happy at your agency.
The area of Strategy covers everything to do with how you plan to make money in the future. It includes sales and marketing, but it also includes planning, business strategising and time spent getting clear on your vision. On a day-to-day basis, the Strategy activities you focus on are geared around winning & retaining new clients, as well as selling additional services to existing clients.
Sadly, there is no magic bullet when it comes to winning new business (despite what you might read on the Internet!). Ultimately, it all comes down to focus and hard graft - building processes, then consistently working to implement them.
Finding the perfect business development strategies for your agency is not an easy process, but it is a critical one. You might find it helpful to think of your activities in terms of whether they’re short-term, medium-term or long-term.
Short-term activities include networking, reconnecting with old clients, and identifying opportunities to upsell current clients to higher levels of service.
Medium-term strategies could include building and maintaining strategic partnerships with other businesses. For instance, a good partnership might result in three or four extra clients per year - much easier than having to go out there and win those customers yourself!
Long-term strategies include activities you complete to boost your standing in the marketplace. These activities include creating videos, producing blog articles, building up your social media profiles, and more. These methods take longer to have an effect, but when done right, they’ll help you generate many more inbound leads - a great asset to your business!
As for the specific strategies you should employ? That comes down to:
What has worked well for you in the past
What works well in your sector in general
For instance, a content marketing agency might find that their audience responds well to in-depth articles, whereas a graphic design firm could leverage “behind the scenes” style videos to great effect. Ditto for short and medium-term options, too. If you’ve previously had success pursuing strategic partnerships with a particular type of business, work on identifying opportunities for more of them. If you find that all your clients in a particular niche are easy to upsell after three months of regular service (as opposed to the six months it takes to upsell other clients), then double down on that.
Whatever you do, remember that it’s better to do a small handful of activities really well and consistently than to do lots of things poorly. Falling prey to Shiny Object Syndrome will do nothing but waste your time, so avoid this.
My final comment on business development is this:
build your list.
Having a list of subscribers you can build a strong relationship with is invaluable for any agency, so if you’re not currently doing this, start immediately.
This doesn’t pay off instantly. You first need to ATTRACT new subscribers to your list, then you need to build authority with them by TEACHING them something useful and then and only then can you start to SELL to them. Maybe only one person in 100 is ready to buy when you email out an offer. But you can still engage the other 99 by adding value to their businesses with useful content. And when the time comes for them to buy? If you have communicated with them regularly with value added content then you’ll be the first agency they think of.
Spend the time now to figure out what business development processes will work best for your agency. Doing so is a critical part of escaping from the Feast/Famine Cycle once and for all, so any time you spend doing this won’t be wasted.
To give yourself the best possible chance of overcoming the Feast/Famine Cycle, there are several different things you can focus on. And in this section of the article, I’d like to share with you some of my favourite resources for simplifying each part of the process.
Improving your client retention is a fundamental part of breaking free from the Feast/Famine Cycle. When you increase retention rates and decrease churn, you reduce the likelihood of another business famine coming your way.
In last month’s article, I broke down the topic of client retention in great detail. If you’d like to read that, just click here.
Additionally, I’ve also written some other powerful materials on this subject before. If you’d like to get access to a powerful five-part framework you can put to use in your agency right away, you can get a free copy of my Client & Account Management eBook here.
As well as learning how to retain your current clients for longer, you should also focus on winning new (highly profitable) business. But that’s easier said than done. Many agencies struggle to consistently sell their services at rates that support their growth moving forward.
Hands-down, one of the single most important skills you should master is communicating and selling based on value. In my experience, I’ve seen that agencies who sell based on value consistently enjoy better profitability, stronger client relationships and a less stressful workload - all highly desirable!
Getting focused is crucial. Knowing what is important and what you need to consistently do, no matter how busy you become (e.g. business development) will ensure you avoid drop offs in client revenue. One book that had a big impact on my focus and productivity is Free to Focus by Michael Hyatt, so I highly recommend reading it.
If you want to get a quick summary of ideas from the book plus my top time management and productivity tips then download my FREE eBook on “Winning back time”.
No matter what system you end up choosing, learning to batch tasks is an easy way to skyrocket your productivity. For example, if you need to record videos, draft some emails or write blog articles, batching them into groups will be a lot faster than doing them one at a time. If you’re interested in learning more about what this means, give this podcast by Amy Porterfield a listen (I love her positive but practical advice - she is a regular on my iPod at the gym!).
While there are many tasks you’ll be able to delegate (or just stop doing entirely), there are certain things you might want to keep doing.
These tasks can be time-consuming, but luckily, there are several tools you can use to automate them to a large degree.
Email marketing solutions such as ConvertKit (my personal favourite), Infusionsoft and Mailchimp all streamline the process of keeping in touch with your subscribers, segmenting your list, and automate your outreach.
Thrive Architect, Divi and Beaver Builder are all simple, flexible WordPress builders that let you tweak your website and set up new pages with relatively minimal effort and without the need for programming skills - perfect for getting new offers out there quickly!
No matter what time-consuming task you choose to keep performing, there’s sure to be a tool out there that will help you to automate it.
To run a successful agency, you have to wear many hats...
But switching between these hats too often can cause problems, making things drag out far longer than they need to due to the cognitive switching penalty - apparently when we get distracted from a task it takes 23 minutes to get our “heads back in the game”!
To avoid being hit with this penalty, you need to create and maintain a good schedule: one that gives you ample time to do everything required of you as an agency owner. If you are brave use a tool called Freedom that locks you out of apps and the internet (e.g. Facebook)for set periods of time to help you focus your mind!
Batching tasks is a great help, as you can avoid switching contexts more often than is necessary. Another thing to keep in mind is the Three Time Pots Model we discussed previously.
Of course, before you can allocate time effectively, you need to know how you’re spending it at the moment. That’s why I shared a specific time-tracking exercise earlier in this article: it’s very effective in helping you do this.
To make completing this exercise as easy as possible, I’ve created a simple downloadable template you can use to start getting a grip on your schedule. You can get a free copy of the template here.
Finally, here is a short video I made shot on this subject.
We’ve covered a lot of ground in this article... but if you can put this information into practice, it’s practically guaranteed that you’ll be in a better position than ever to escape the Feast or Famine Cycle once and for all.
If you’d like to have a permanent copy of this article for your easy reference (plus access to an exclusive One-Page Action Plan to help you put this information into practice right away), just click the image below.
When I reflect on the work I do as a business coach, I like to see if I can spot any similarities in the businesses of my highest performing clients.
Success leaves clues, as they say – learning what one business does to win in their specific market often gives an insight into what it takes to win in general too.
Last month, we talked about the power of establishing a clear niche for your business (you can read that here if you missed it).
And yes – across time, I’ve seen well-niched agencies outperform their generalist competitors 9 times out of 10. But there’s more to running a high-performance agency than simply choosing a good niche – if only it was that simple!
As for the other commonalities…
I was preparing some case studies for my website recently and came across an interesting example I’d like to share with you.
PR agency Pedroza Communications sought me out to assist with their business. They had been around for five years but were facing challenges around growing the agency sustainably.
Bear in mind this was an agency that had defined their niche, won plenty of customers and established a respected position in the marketplace…
But despite having these wins under their belt, they were still struggling to shift to the next level.
I got to work, digging deep to find out into what was holding them back from achieving the results they sought. It quickly became apparent that their pricing model was a key issue. Upon review, we decided that the business needed to move from a time-based pricing model to a value-based one (more on that a little later).
With some bravery on the part of the MD (to make this shift), this process – coupled with some other interventions on my part – helped the agency grow their profits by 66% in just over a year.
We’ll return to this case study a little later in the article, but for now, just bear in mind that big improvements often come from taking small corrective actions, including shifting your mindset.
As an agency coach, I’m used to helping clients deal with a variety of problems. Staffing, strategic planning, winning new business and client retention – I’ve had clients contact me to assist with all these areas and more.
But hands down, one of the most valuable things I do as a coach is to help my clients get their pricing right.
Value pricing and selling is a huge part of building a successful agency, but most of the information floating around online doesn’t truly teach you how to implement a value-based pricing and selling strategy.
In this article, we’ll be diving deep into the topic of value-based pricing and specifically HOW you can implement it in your agency.
Here’s what we’re going to cover:
So if you’re ready to break free of time-based pricing, start earning the fees you deserve and dramatically boost your agency’s profitability, read on!
Want to get an instantly actionable list of takeaways from this article? Click the image below to download the Value Selling One-Page Action Plan.
Before we get onto the topic of value pricing, I think it’s important to first get clear on the standard agency pricing models you can choose from. Here are the three most common pricing strategies you could employ in your business:
This is simply where you charge your clients based on the time you spend working on their account. You might have an hourly or daily rate, likely different hourly or daily rates for different team members that work on the account. The prices you quote to clients are based on:
Simply put, it’s a direct trade of resources (i.e. labour hours and materials used) for pay. It’s a standard model, one that many agencies employ when they’re still finding their feet in a market.
There’s nothing wrong with it, per se – but tying your income to your time will hold you back as you try to scale your agency.
There are only so many hours in the day that you can work. And depending on your market/niche, quoting high hourly rates can be a huge turnoff for prospects (when you’re selling based on time, at least).
Of course, charging higher hourly/daily rates is a viable strategy. That’s essentially what the next model allows you to do.
On the face of it, this might look similar to value-based pricing… but the difference lies in where your focus is.
With a “Cost Plus” or fixed fee pricing model, you focus on inputs and outputs i.e. the resources you use to complete work for the client.
For instance, a web developer might figure out the price for a particular project by outlining the various components of a project. That could look like the following:
And so on.
Once that’s done, you would then move to assign a cost to each part of the project.
For instance, maybe you estimate that developing the wireframes will take two designers four workdays to complete. Perhaps the initial meeting requires two hours of preparation on behalf of the Creative Director, etc. Essentially, you’ll figure out how much time & resources the project will take, then assign a cost to each.
When you have completed this step, you’ll have an estimated cost for the total project. And this is where “Cost Plus” pricing diverts from value pricing.
In this case, the final price quoted to the client is dependent on the cost of time/materials used, plus some fixed percentage (e.g. 20%).
For example, if you estimated it would take 10 hours of a designer’s time and their internal cost to you is £600 for this time, you would charge the client £600 + 20% mark up resulting in a total cost to the client of £720.
(We’ll return to this web design example a little later on in the value pricing section, so keep an eye out for that!)
This “Cost Plus” approach can sometimes be used to negotiate a fixed fee for the project. This is a double-edged sword: if the project goes to plan, you’ll make as much profit as you forecasted (or even more if it goes well). But if it should happen to drag out longer than you planned for? You’re left with two choices…
Neither scenario is great. When you also consider that the fee you quote could simply be based on a fixed hourly/daily rate + a fixed percentage, it’s easy to see how you can end up working on projects that aren’t beneficial for your agency.
The next pricing model on our list is another common one that takes the idea of charging a fixed fee and improves upon it slightly.
A retainer is where you agree a fixed monthly fee and outline the work you will do for that fee. For example, say you run a PR firm. You could negotiate a fixed monthly PR retainer of £3,000 per month with a client. For that amount, you might agree to the following deliverables:
A retainer-based agency can often be more profitable than ones using the previous models. This is because their income is independent of their time. With this approach, you get paid the same whether it takes you 10 hours or 100 hours to complete the work required.
The price you quote for a retainer is often derived from how long you estimate a standard deliverable will take to complete but allows some scope for variance depending on the client (which is good).
However, while it’s a step in the right direction, it’s not the best option for your agency. It’s still an exchange of resources for money – just in this case, the resources in question are the various deliverables you’re obliged to work on (and not your time).
Additionally, most agencies will still get sucked into quoting a retainer price that reflects the effort they have to put into the work (and not necessarily the value it creates – more on that shortly).
When we look at these approaches presented so far, what’s the flaw common to each of them?
They focus on inputs and outputs… not outcomes and impact.
Not sure of the difference between these terms? Read on to learn what they mean (and why you should care).
All of the pricing models we discussed in the previous section are acceptable choices, but they each share the same common flaw…
They are based on YOUR agency and what YOU are doing i.e. your inputs and outputs.
This is a problem because clients only really care about their own business. By this, I mean:
That’s not to say they don’t care about quality or deadlines (these things obviously matter), but what really matters are the OUTCOMES and the IMPACT of your work.
Let’s take a second to define precisely what these terms mean.
When we sell to clients, we sell four things:
Inputs and outputs are easier to quantify, but they matter a lot less than outcomes and impact.
Focusing on the former two is a hallmark of agencies focusing on the wrong thing and therefore likely to lead to misunderstandings and shorter-term relationships. Rather than framing their work in terms of how it will benefit the client, they instead spend their time worrying about the stuff that’s easily measured. Sadly, this is one of those cases where choosing the simpler upfront option holds you back in the long run.
A press release might take five hours’ worth of labour to complete. The inputs and outputs, in this case, are easy to measure (‘research’, ‘time to write’ and ‘the press release’). But how do you go about articulating the outcomes & impact of that positive press release? Of coverage achieved (outcomes) Of a stronger brand? Or a more receptive market (impact), thanks to your efforts?
I’ve lost count of the number of agencies I’ve encountered over the years who fail to spot the mismatch between what they’re selling (inputs & outputs) and what the client is truly buying (outcomes & impact). This lack of alignment costs them new opportunities, profits and a chance to build a much bigger business…
And rectifying this mismatch is where value pricing and selling comes in.
As we just discussed, there’s a variety of standard pricing models you can employ in your business, but in my experience, the best pricing model for agencies is a value-based one.
There are many reasons this is your best approach. Consider these two quick stats:
So the facts are clear – value pricing is the way to go if you’re running an agency. But what exactly is value pricing?
Simply put, it’s buyer-centric (not supplier-centric like the other methods).
The price you quote is based on the value delivered to the buyer (the outputs & outcomes), and is not based on how expensive it is for you to deliver (i.e. the inputs). It’s often referred to as outcome-based pricing for this very reason.
Value pricing allows you to get paid based on the value you create for clients (and not just on the resources you expend in creating deliverables for them).
Consider a web design agency. If they employ a time-based pricing model in quoting a project to a prospect, they might find it hard to justify more than £5,000 based on the hours it will take.
This might feel frustrating for the agency owner, but that’s because we’re still trapped in a limited paradigm (i.e. time-based or “Cost Plus” pricing). By shifting to a value pricing approach, we can begin to charge more than £5,000.
Let’s say that you’ve worked with similar clients in the past, and were able to increase their on-site conversion rates to the point where they were earning an average of £200,000 more per year directly from their websites.
That’s £200,000 in profit directly attributable to your interventions. In this case, it would be very reasonable to charge say 10% of that as the project fee (i.e. £20,000).
By learning to frame the project in terms of value for the client (and not just simple inputs and outputs), this web design agency could earn four times as much from a single project.
(Note that this £200,000 figure doesn’t have to be an average or even a figure you’ve personally produced for a client. Ultimately, your goal is to get the prospect to tell you the value of your proposition by exploring with them the goals of the project and what ‘success looks like’. If you do this, you’ll be framing a value-based price).
Hypothetical web design agency aside – how well does this approach work for real businesses?
You’ve already read about the success of Pedroza Communications above (who boosted profits 66% in a year after implementing a value pricing model). This experience isn’t unusual – I’ve seen other clients snap out of slumps and boost their profits by double-digit amounts in a matter of months.
And even as a coach, I know that the day I shifted towards value-based pricing was the day I started getting paid the fees my work deserved.
You’ll read more about my personal (hard-won) experience with value pricing later in this article. For now, let’s address the question that’s been at the front of your mind since you started reading this article…
How can you put value pricing to work in your agency?
Now, you might have read the previous section and thought, “There’s no way I could justify charging x% of my client’s earnings as the project price”.
And yes, sometimes that’s true…
But when you think about it, value pricing is everywhere.
It’s more obvious in some sectors than others, of course. For instance, consider the fashion industry. The same basic material is used to manufacture Primark shoes and Nike ones – but Nike shoes can retail for 5-10 x the cost of their cheaper equivalent. All that separates the two is belief in the value of the brand.
Another example is seen in the construction industry. No one prices based on the cost to build + a margin of profit… it’s all down to what people are willing to pay. In a way, that’s the ultimate value sell!
Selling clients based on value requires you to take a different approach. Rather than focusing on yourself, you need to become intimately aware of what your client is hoping to achieve.
You can’t possibly hope to deliver value to them without first understanding what they value. How can you succeed if you don’t know what success is? More importantly, how can you create value for their business if they don’t truly know what they want themselves?
The quality of the questions you put to your prospects will determine how much value you can add to their business. Your goal is not to figure out how much you can charge them – it’s all about determining what a valuable solution is worth to them.
Inputs and outputs are secondary. Outcomes and impact are what you need to be worrying about. Getting a crystal-clear picture of how they will gauge success is of the utmost importance.
Once you’ve figured out:
You’ll naturally be able to align your proposal with their desires. That goes for pricing, too – once you know what they need & how much value that can bring to them (financially), you’ll be able to give them a price that works for both of you.
In our web design example, the agency in question had experience and a track record of delivering results to similar businesses. That made it easy for them to pitch their value – they had evidence to point to their impact, and a compelling story to tell about their value proposition.
If you’re in an industry where it’s harder to quantify these things, there are two other methods you can employ.
Whatever the case may be, remember that figuring out the true impact you can have on their business is what will enable you to get paid value-based fees…
Don’t take their stated goal of wanting more website traffic as their definitive goal. Dig deeper: look for the true impact you can deliver for them (keep asking ‘why’ questions so you can align your project to their business goals).
If you’re interested in learning more about having effective (value-based!) sales meetings, check out the resources section below for a free copy of my Value Selling eBook. Additionally, you’ll also find a link to a webinar I recorded on the topic.
Using this material, you’ll find it easier than ever to figure out what clients really want – so you can be the one that supplies it to them.
Let’s consider the realities of value pricing by changing tack for a minute.
Consider one of the most widely available substances in any shop in the world – bottled water.
If we apply the pricing models we’ve previously discussed, we can see how we could come to very different values for the same product depending on how it’s presented to us.
Let’s take a simple 500 ml (16 oz for my American readers) bottle of store-brand water.
If you have a time-based pricing mindset, you might estimate how long it took to manufacture the bottle, and how long it took to locate the spring it was filled from. Say the end cost is 60p.
If you were a little more generous and used a “Cost Plus” model, you’d add a margin of profit so the seller has an incentive to work with you. Let’s say the end cost is £1 in this case.
Both fairly modest prices, but they’re quite in keeping with what you’d expect to see. However, what would happen if we applied a value pricing paradigm?
To consider how this could happen, imagine the following situation:
You’re walking through the desert. With the sun beating down on you, the sand beneath your feet feels like it’s on fire. There’s nothing but dunes for miles around…
But worse than the burning sand is your thirst. You’re desperate for a drink, and you’d pay any price for it right now.
Then in the distance, you see a figure on the horizon. It’s another lost traveller, just like you – but they seem to be in much better condition. As they get closer, you see why: they’ve got a bag filled with little plastic bottles of water on their back!
In this moment, how much would you pay for one of those little bottles?
As the sun beats down on you with no reprieve in sight, wouldn’t it be fair to say that a little bottle of water could be worth far more than 60p?
Odds are you’d pay whatever you could just to get your hands on it. £10, £20, £100 – it all depends on just how thirsty you are.
And if you were thirsty enough to hand over £100 to this well-stocked traveller but they only charged you £20, how happy would you be?
Likely jumping out of your skin at the great deal you got!
That’s what value pricing is all about: figuring out how badly your client needs a drink, then giving them that drink at a cost that excites them (i.e. that makes working with you a no-brainer).
Granted, the situations you face as an agency aren’t as life and death as a wander through the desert, but the moral of the story still applies:
Clients don’t buy time, effort or input.
Clients buy results.
Once you internalise this lesson, you’ll be in a much better position to both deliver great results to clients and get paid much more attractive fees.
To drive home the importance of this shift in mindset, I’d like to share with you a story from the very early days of my coaching agency.
Let’s take a trip down memory lane together as I recount a tale from the early days of my coaching business.
I remember it like it was yesterday…
I had met a great prospect, and things were going well. They were receptive to my pitch – they were even interested enough to ask for a quote.
Without giving the matter much thought, I quoted them a day rate I felt was reasonable for both of us. I didn’t have much to base this on bar a little research I had done on some of my competitors.
The price didn’t seem to concern them (in hindsight, this was a red flag: I should have seen that I was clearly too cheap) – they said they’d think about it and let me know.
A few days later, that prospect got back in touch with me. They were eager to work with me, totally sold on my proposition and offer to them…
Except there was one little hitch.
They had been in contact with another coach whose day rate was £100/day less than mine. And unless I was willing to price match, they were going to go with my competitor.
Being new to the coaching game, I felt I had no choice but to discount my prices to win that first client. There was no escaping the Price-Match Trap in this instance…
But as I established my business, the lessons I learned from that first encounter proved invaluable, namely:
Let’s expand on these three points now.
Time is a commodity. When you quote a price to your client based on how long something will take you to complete, you leave yourself vulnerable in two ways:
In either case, it’s very easy for prospects to compare your proposal to what other agencies are offering too. And not only is pricing based on time easy to compete against – it also fails to take the client’s true desires into account (i.e. the outcomes and impact they’re after).
In my case, there was no discussion of the value my competitor and I could bring to the table – it was purely a matter of cost. Because I had chosen to quote a day rate (and hadn’t taken the time to properly articulate my value), I was bargained down.
Being able to perform some technical task isn’t what sets you apart from the competition. Copywriting, web design, SEO, PR management – these skills are commodities. There are hundreds of other businesses out there that can do those same basic things.
What sets you apart is your experience and your creativity in generating great results for your clients… but so often, agencies get bogged down in the technical side of their work.
Your skills are a prerequisite but remember: the real value you can offer clients comes from your experience and creativity.
A run-of-the-mill web design agency is competing with cheap freelancers in Eastern Europe & Asia, website building software such as Wix and GoDaddy, and a dozen other local firms all offering the same services. In this environment, it’s easy to see how competing based on price is a race to the bottom.
However, if they can learn to use their experience serving a particular niche (or their creativity in delivering great results) to their advantage, they can more easily stand out from the crowd. Discussions of price will fade into the background in the face of the new reality:
All your competitors could be cheaper upfront, sure – but what you’re offering is so much better.
As we’ve already covered in this article, clients don’t really care how much the work costs you, how long it will take you, or if you’re proud of the final results.
All they truly care about is the value you can create for their business.
If you can learn to frame your relationship in terms of value (and not just how much you cost), then you’ll be in a position to earn far better fees for your work.
These three truths were hard-won for me (to be honest, this wasn’t the only client I let talk me down to a lower rate!), but I’ve been able to spare my coaching clients plenty of headaches by passing these lessons on.
If you find yourself competing based on price, bargaining with clients (and losing), and even losing out to other businesses that don’t deliver as much value as you do…
Then consider how you could best sell your value to prospects.
Develop systems for communicating your worth, and for figuring out precisely what your clients are looking for.
If you can internalise these truths and use them in your dealings with clients, you’ll be in a much better position than your competitors.
In the next section, we’ll look at a relevant case study that will show you how effective using a value pricing model could be for your agency.
I’ve mentioned their name a few times throughout this article already. That’s because I think you can learn a lot from this case study if you’re currently trying to implement a value pricing structure in your agency.
Pedroza Communications is a PR company working in the education sector. They took me on because, despite being pretty well-established in their niche, they felt they were not growing as much as they could. In fact, they felt as if they constantly taking one step forward and one backwards, never getting any closer to that endpoint they were aiming for.
My work as an agency coach is rarely a simple “one and done” proposition. We dig deep and look to see what’s really going in the business. Oftentimes, the client is surprised when we find the real cause of their troubles.
In this case, we made a few minor changes to the operational structure, workflows, and the like… but the single biggest area of concern was their pricing model.
Like many other agencies, Perdoza Communications employed a time-based pricing model when pitching to new prospects. And while that helped them to secure plenty of business, the work they were doing wasn’t as profitable as it could be.
We looked at their pricing model and identified a few key changes they could make (maybe you could use these too?):
With a little bravery, the MD committed to making these changes. We worked together on the next brief, and by using this approach, we came to a price that was substantially higher than they would have charged previously…
But despite this increase in price, they were still able to easily land the prospect as a new client. It was almost a no-brainer, considering the value they brought to the table.
Just one year later, they had switched over to using this approach with all their prospects. And the results?
Their profits were 66% higher than they had been just 12 months prior.
I’ve seen results just like these happen for agencies in many other markets too. The same rules apply, regardless of your niche: learn to sell based on value (and not just on time), and your business will reap the benefits.
In this article, we’ve dug deep into the topic of value selling and pricing.
Switching to a value-based pricing model can seem quite challenging with lots of questions and excuses including:
Answering these questions can be tough…
But luckily, I’ve got some great resources to help you with the process.
First off – you can get a free copy of my Value Selling eBook (click here), which outlines the 10 steps you can take to implement value selling and pricing in your business. Inside, you’ll get the exact steps for selling based on value, how and when to have the value conversation with prospects, and much more.
Additionally, Hubspot has some great content on value pricing frameworks. You can read more about that here.
In case you’re sceptical about how well these techniques will work for your business, here’s a case study of a small design agency that revolutionised their business by switching to a value-based pricing model.
Finally, here’s a link to a book called “Breaking the Time Barrier”. Published by FreshBooks, it’s a short read, but very valuable. And best of all, it’s free!
We’ve covered a lot of information in this article. At this stage, your head is probably spinning at the possibilities before you!
To help you get started with the process of value pricing, I’ve outlined the very next steps you should take in a handy One-Page Action Plan.
To get your copy for free, just click the picture below for instant access.
Switching to a value-based pricing model is one of the best things you can do to grow your agency sustainably and improve your profits…
And with the information shared in this article, you’ll be able to make this switch faster and easier than ever before.
I guarantee you that taking this approach will have the biggest impact on your profits more than anything else you can do in your agency.
My aim with this article was to teach you everything you need to know to start implementing a value pricing model in your business today. And with everything we’ve discussed here, I’m confident that you can:
I’d love to hear about your experiences with value pricing, so please reply in the comments below with your thoughts to these 2 questions:
What pricing model do you use in your agency, and what do you think the advantages/disadvantages of doing so are?
If you don’t currently use a value pricing model in your business, what’s stopping you?
I look forward to reading your answers below!
P.S. Don’t forget to download your One-Page Action Plan. Click here to get instant access.
Yet in business, I see time and time again, agencies trying to sell their prospective clients a vitamin pill. This is not a good way to sell.
Imagine going to your best friend’s wedding and having too good a time and waking up with an almighty headache the next morning. Would you reach for a pain killer or take a vitamin pill? Well a pain killer of course!
Clients who are in pain have an urgent need to solve that pain (with your solution). Yet many agencies are trying to sell their prospective clients a vitamin pill (something that is nice to have but not urgent) rather than a pain killer!
So when you are marketing & selling your product or service, are you addressing the client’s pain or are you telling them your product is something that would be great to have in their business?
A real bugbear of mine is that many websites make this mistake by starting out selling the vitamin (which looks like telling the client how great YOU are and what YOU do on your home page) rather than recognising the pain (which looks like building empathy with your client by showing you understand the pain they are in).
This could well be the case with your own website?
They are trying to sell the client something they may not be aware that they currently need (the vitamin pill) because although it might enhance their business, it doesn’t solve one of their major pains right now (the pain killer).
Let me give you a real example of this – something that happened to me last week. I got a cold call from a company that can track visitors to your website and give you detailed info on them.
Sounds great right?
The issue is that this isn’t one of my current pains. A current pain for me (regarding web traffic) is that I would like to get more traffic to my site. Only then would it be worth investing a monthly fee on visitor tracking software. Meanwhile, that product is just a vitamin pill for me, so I am not going to buy it! The guy on the phone wasn’t really listening to me and just tried to tell that spending £500 / month on their software was a good investment. Not if it doesn’t solve one of my key pains!
They needed to better target by understanding who they were calling first.
If we start by identifying the client’s pain then we ‘stand in the client’s shoes’ and demonstrate we understand them (which builds empathy, a crucial part of the sales process). The language we use when we discuss our product or service will then be geared to show the client how we solve that pain rather than just discussing the features of our product (which we can do later).
If we do this we are much more likely to build empathy with a client which will lead them to say ‘tell me more’ and then you have started a dialogue that can more easily lead to a sale.
They contacted Da Costa Coaching after listening to Rob gave a talk at a local networking event. They had worked with a coach previously but saw that Rob’s service-based agency experience together with his no-nonsense and pragmatic approach would be a good fit for Cityzen.
Charlotte Smith Director commented “From our experience, we saw that many coaching firms tend to have a predefined approach that they use with all clients, regardless of need or size. The first thing Rob said when I met him was “I’ll listen to you and address the underlying needs of the business”. True to his word, Rob did listen and adapted his tools and processes to fit our needs. For us, he has been a coach, mentor, trainer and at times, a shoulder to cry on! He has created accountability to help drive our practice forward.”
One of the conundrums Cityzen faced was trying to service both domestic and commercial clients. This meant within one working day they could be designing homeless housing for a Council and a domestic loft conversion. It was clear that the domestic clients needed a lot more account management (hand holding, explanations, more frequent communications and so on) than the commercial clients, who had a better understanding of the process and also trusted fellow professionals to get on and deliver their work.
The coaching process led many discussions around identifying ideal target customers (customer personas), enabling Cityzen to define and focus on profitable and more enjoyable clients. But it soon became obvious there was a need to niche. Like many companies, there initially was a reticence because of the potential for lost business. After spending time researching the market and analysing time spent on customer work, it became apparent that (a) The commercial market was plenty big enough for Cityzen to solely focus on (b) the way to engage with this sector was by building face to face relationships and (c) the domestic clients took approximately double the amount of account management and as a consequence, were often unprofitable.
Faced with this information, Cityzen committed 100% to niching their agency to focus on commercial clients only. This meant
The whole of 2018-19: Offering professional services to B2B and B2C, delivering construction-focused design
2019-20: delivering the same package but niched to B2B only (developers, concept architects, contractors)
Charlotte Smith, Director, concluded “It took, what felt like, some bravery at the time to turn our backs on domestic work but the strategy we worked through with Rob has put us in the strongest position we have ever been in. Not only that, but the work we are being invited to do is more aligned with our values, and fulfilling for our team.”
This is a great story of focusing on a niche and using the intersection of where you get the best results, where you are most profitable and where your passion lies, to work out what your niche should be. It also shows the power having a clear niche will have on your bottom line (from £163k to £1.1m).
I’ve seen it time and time again…
Agencies that have a clearly defined niche massively outperform those that don’t in almost every way: revenue, customer retention, employee satisfaction, and in the quality of their client relationships (because prospects see you as the expert, not just as a supplier).
A big statement to make? Sure – but I know it’s accurate because I’ve lived it. Niching my agency allowed me to triple my profits inside 6 months (you’ll read more about that in the next section).
And in my coaching practice, helping clients to niche their business is one of my most common interventions.
I recently worked with a PR firm that served three main niches. They were doing well, but were struggling to grow their agency and win new business. They felt stuck – like they were perpetually taking one step forward and one step back, never truly making progress towards their goals.
We worked together to answer three core questions (covered later in this article) about their business, the answers to which revealed a clear target niche for them. And by honing in on this area of their business and committing to it in their sales & marketing, they were able to land three new (highly profitable!) clients in just 90 days.
The world values specialists. When you have a cold or a flu, you head over to the GP and take their advice as gospel. But when you need urgent surgery on your elbow, you don’t settle for a GP – you go for the best surgeon you can find.
It’s the same with your agency. People with burning problems want to have them solved by experts. When you serve a specific group of customers, you can:
How much less stressful would running your business be if you knew you could serve a highly targeted group of customers that saw you as an expert (and paid you the fees you deserve, without question)?
In this article, we’re focusing on how niching your agency can help you to supercharge your profitability, attract a constant stream of great prospects, and effortlessly build stronger relationships with clients (which is SO much less stressful than running a generalist agency).
Here’s what we’re going to cover in this article:
The information you’ll learn here is the kind of advice my coaching clients routinely implement with tremendous results. So if you want to start getting paid like a specialist (and have more fun with your business than ever before), then read on!
We cover a ton of information here, and I know how hard it can be to actually apply everything you read when you have so much else on your plate already. That’s why I’ve summarised everything you need to know in this One-Page Action Plan. Click the image below for instant access.
No matter what industry you’re in, niching works. I saw it when I was running my own agency. I’ve seen in my clients businesses’ – and I’ve even seen it in my coaching business.
Back in 2007, when I first started my practice, I was a generalist coach. Whether the client was a large corporation or a small startup, I was happy to help them all the same. I thought that I needed to be a generalist from the get-go so I could get my coaching business off the ground, and set up my website and marketing to reflect this.
The issue with this approach was that in trying to appeal to everyone, I ended up appealing to no one.
I didn’t have a compelling story to tell larger clients because I didn’t have loads of “large corporate experience”. As a result, those types of companies were hard to win.
On the other hand, I had plenty of relevant expertise to offer startups and smaller businesses – but when they heard that I also worked with bigger firms, they would assume that I couldn’t understand the particulars of their situation. Consequently, I struggled to land clients from either category.
I was in a lose-lose position. It turned out that my beliefs about niching and winning new business were completely backwards. Rather than making me more attractive to prospects, positioning myself as a generalist was actually hurting my chances.
But if I took the opposite approach, and instead chose to niche my offering and serve a small group of potential customers above all others?
I would be in a much stronger position to succeed.
Sometimes the simplest truths are the most difficult ones to accept… but after much soul searching, I made what I felt was a very brave decision to niche my business.
For me, choosing my niche was not difficult. I had been a part of the marketing agency world for the previous 15 years as head of my own agency, so I was certain of two things:
But despite being passionate about the niche, and being confident I could deliver results to my clients… I still hesitated.
Looking back now, I can see that it felt like a big decision to make because I still believed that I’d miss out on tons of business opportunities by picking one niche to serve.
I thought about it for hours, days, weeks on end. I’d ask myself “But if I focus just on the marketing agency sector, won’t I miss out on lots of other potential clients?”
As I’ve seen many times in my life, honest reflection is key to finding an answer to the difficult questions. In this case, I had to face up to the reality that I wasn’t winning many clients anyway. Most of them were put off by my generalist positioning, choosing instead to go with more focused alternatives. So really, I didn’t have much to lose. Worst-case scenario, I could pick a different niche, or go back to being generalist if niching didn’t work out.
Fortunately, that wasn’t an issue, as niching my business turned out to be the best decision I ever made.
Within six months, I had tripled my profits and was winning new business left and right. And not any old clients either – ones that I understood deeply (so I knew I could do a fantastic job for them)… ones I truly enjoyed working with.
It’s been almost 13 years since I first started serving this niche above all others. And with the benefit of this experience, I have two key learnings to share with you. Using this advice, you’ll be able to better establish your niche, serve your target audience and build a sustainable agency that profits for the months and years to come.
Defining a niche for your business doesn’t mean that you can never take on an opportunity outside of that niche. While you don’t market and sell yourself to other niches, it’s still possible that clients outside your chosen target audience will seek you out – or that a chance will come across your path that’s too good to ignore.
In these cases, you can make a decision based on the facts at hand. If you feel your agency is a good fit for the work based on your culture, you can deliver good results to the client and would also enjoy working with them, then go for it!
Few agencies will serve just their niche and no one else. You’re free to pitch for and serve business outside of your chosen market. As long as you don’t forget what your core focus is (and why you picked it), there’s nothing to worry about.
And remember: choosing a niche doesn’t mean you’re committed to it forevermore. In fact, I frequently tell my clients that it’s far better to start niche and then broaden out, rather than starting broad and trying to narrow down. As you establish a strong position in your target market, you’ll be able to expand the scope of services you offer to people outside that niche. Over time, you can transition completely if you like.
I’ve seen this in my coaching business. While I started out working with marketing agencies only, I’ve since gained enough experience in the marketplace to help other types of businesses too. My client base is still mostly marketing agencies, but has expanded to include clients outside this niche too. It’s a roughly 80/20 split between niche and non-niche clients.
You’ll probably experience a similar development in your business over time. If you choose your niche well at the beginning, you’ll continue to serve that market above all others – but there’s nothing wrong with dipping your toes in other waters too, if you feel the prospect is a good fit and you will be able to do a good job for them.
Niche businesses nearly always charge more than generalist ones, simply because they are seen as subject matter experts. The more narrowly defined your niche, the more likely it is prospects will assume you are an expert in the field.
As a niche agency, you are seen as an expert. You’re not a mere supplier for some commodity: you’re a trusted partner, someone to be consulted. This, in turn, allows you to build better relationships with your clients – and earn higher fees.
That’s why surgeons get paid far more than GP’s. It’s why World War II historians are seen as more knowledgeable than history teachers when it comes to discussions of World War II. And it’s why some web development agencies can charge £50,000 for a website (while others struggle get paid even £500).
To be honest… it was easy for me to select the niche I’d serve with my coaching business.
As we discussed in the previous section, it just made sense to serve marketing agencies. However, through working with over 250 agencies in a coaching capacity, I’ve seen that it’s not always so easy to pick your niche. In fact, it can be downright confusing if you don’t know what segment of your business to focus on.
I find that there’s a few key questions businesses need to answer before they can choose their best niche. Consider these questions when researching what niche you’d like to target:
You can visualise these questions with the following graphic:
You want your chosen niche to be at the intersection of the Money, Passion, and Results circles. This will allow you to build a sustainable business where you can deliver great results for clients, earn fees you deserve and enjoy the work you do.
Operating a business that fits in just one of these circles (or even in an overlap between two) will be unsustainable in the long run.
Take the time to figure out what niche lies in the overlap between these three circles. This market will become your core focus, allowing you to build a stable agency dedicated to serving those customers.
If you’ve run through the three questions above and are still having some trouble wrapping your head around niching… consider the following framework.
There are four easy ways you can think about niching your agency.
Let’s examine these in more detail below.
This one is self-explanatory: you can choose to serve a market based on geographic location.
This can be a good strategy when knowing the area is a competitive advantage. Understanding the lay of the land and being able to “speak the language” of your target audience is often an invaluable asset in winning their business.
Examples of industries/verticals include pharmaceutical, telecoms, tech, and education.
These sector definitions are quite broad, so it can be a good idea to niche down even further by identifying a sub-sector in the niche e.g. rather than serving tech companies, you could drill down and focus on helping consumer tech start-ups or B2B SaaS companies.
Examples of deliverables/services you may provide could include PR, web development, SEO etc. Once again, it’s important to ask yourself if the specific service you’ve identified is niche enough… or if it’s too broad.
If it is too broad, you need to establish a niche position that makes you look like a specialist, not a generalist. For example, you don’t just offer PR services – you’re an expert in Crisis Communications. You’re not just a web developer – you’re a web developer that specialises in integrating CRM systems.
Sometimes, you’ll find that a lot of your clients are facing broadly similar problems. E.g. you help startups win funding from competitive grant programs, or you help financial practitioners generate more leads for their services.
If you habitually help your clients with the same problems, you could consider basing your business around solving this problem. And if you can explain how and why you are uniquely qualified to serve this sector, you’ll do just fine!
Once you’ve picked your niche, you need to commit.
All of your outward communications should be crafted with this niche in mind. If you’re advertising, you should endeavour to speak to your target audience directly. Forget about being all things to all people – serve the few so that you may build a profitable, stable business that will eventually serve the many (if you want it to).
Your goal is to be seen as an expert in your chosen sector. In practical terms, your website should be geared towards achieving this outcome. First impressions matter. You don’t have very long to convince people you can help them. As soon as prospects land on your site, they should be able to tell:
Let’s look at some quick examples to really drive this point home.
Look at this web design agency. Here’s the first thing you see when you click in…
This is the site of a web design agency located in East London – but you wouldn’t know that from looking at their home page.
Their offer of “bespoke design and web development” is stuck in the top left corner in small white font. The most prominent thing on the page is the fact that they’re looking to hire developers.
Suffice to say that prospective clients who come across their website are unlikely to stick around for very long.
To apply the criteria listed above to this site:
Now, let’s look at a better example. This is another web design agency. Here’s the first thing you see when you click onto their site:
Instantly eye-catching visual imagery, a clear contact button, an uncluttered screen and an obvious next action to take. In addition to this, they instantly speak to their audience (ambitious businesses who want their brand to “thrive online”).
Their niche is even clearer when we scroll down to the next section…
Great use of white space, and a beautiful design in general. Important for a design agency, sure – but let’s apply our criteria from above to see how well they fare.
Of course, there’s more to marketing than just your website. You also need to think about how people will find you.
If you’re running ads, they need to be congruent with the niche you’re targeting. Speak their language, and tell a consistent story across all mediums you use to reach them.
Beyond ads and digital outreach, you also have to be mindful of the networking events you attend.
Packaging design business owners shouldn’t be attending events where they meet accountants, bankers, personal trainers & hairdressers. Sure, they might have some great conversations – but they won’t be talking to their target customers.
If you’re not sure who your target customers are, you need to spend some time developing crystal-clear customer personas (or customer avatars). For more info on how to do that, check out my Customer Personas Workbook (discussed in the Resources section below).
Having a clearly defined niche and understand who you’re targeting is a massive part of running a successful business in any industry, not just in the agency space. To prove this point, let’s look at another example… coffee.
I don’t know about you, but I can’t start my day without a good cup of coffee. And to be honest, I’m pretty spoilt for choice. Living in the seaside town of Brighton in the UK, I can’t go more than 100 yards without coming across a coffee shop.
In my eight years of living here, I’ve seen many coffee shops come and go. In fact, I’ve actually worked with one or two over the years (a good example of how you can take on clients slightly outside of your niche when you can add value to their business).
Trust me: it’s extremely difficult for a coffee shop to stand out from the crowd here. They all sell the same basic product (coffee), have roughly the same atmosphere and decor, and operate their businesses the same.
Most struggle to define a clear niche to target. And so they try to cover all bases (e.g. offering breakfasts, takeaway lunches, teas etc.) – this is a mistake. As we’ve already discussed, trying to appeal to more and more people usually has the opposite effect you’d like it to have.
Singing the same tune as everyone else is not a good way to get heard over the noise. This is why the majority of coffee shops are just getting by. The owners don’t get rich – at best, most just build a high-stress job for themselves.
Of course, some coffee shops are doing very well. Take Small Batch Coffee Company, for instance.
When they first started in 2007, Small Batch was a small-scale business. Their only goal was to roast small batches of high-quality coffee. After a couple of years of this, they opened their first few coffee shops. Gradually, they expanded the company’s wholesale and retail business to include multiple coffee shops.
Today, Small Batch Coffee is a hugely successful coffee wholesaler, supplying high-quality, ethically sourced coffee to cafes and restaurants all over the south of England. They also sell coffee online direct to retail customers and serve their own customers in seven different locations.
I believe that Small Batch have succeeded because, right from the start, they were clear about their niche. They didn’t open up another generic coffee shop and starting competing with the 15 other stores within walking distance of theirs. They focused on providing home-roasted, high-quality coffee to the exclusion of all else. At least at first. They were singing a different tune… and pretty soon, people started to pay attention to them.
You’ll also notice that they didn’t confine themselves to this niche. Once they had established a position in this space, they expanded outwards into complementary markets (known as ‘shoulder niches’). This contrasts with the standard generalist approach taken by most coffee shops.
In addition to this, Small Batch established a reputation for quality in the micro-roasting business, then carried it over into their retail operations. People know that if you’re looking for a good cup of coffee, you go to Small Batch. They prove that niching works.
In this section, I’m going to share with you some of the powerful tools you can use to help niche your agency.
Previously, we discussed some of the big issues that stop you from building a highly profitable niche agency. False beliefs, not taking the time to truly examine your business, and the fear of “missing out” on all the niches you don’t choose… all of these factors can hold back your business from growing like it should. Growing your agency is challenging enough – you don’t need all this extra baggage complicating matters too!
Luckily, I’ve developed some useful tools in my time as a coach to 250+ agencies. And in this section, I’d like to share these resources with you.
Firstly, you can get a free copy of my “Defining Your Niche” eBook. Inside, I break down the difference between niche and generalist agencies, the realities of running each type of business, and a super-simple (but powerful) framework for figuring out where your business is right now – and more importantly, how to get to where you want to be.
Secondly, If you’re completely new to the subject of niching, then I highly recommend you check out the book “Blue Ocean Strategy”. First published in 2005, it revolutionised the way I (and thousands of others) think about business. I’ve often applied its learnings with my coaching clients, many of whom have benefited tremendously from the ideas contained within.
The book likens competitive marketplaces to “red oceans”: waters where fish fight for scraps and tear strips from each other in an effort to survive. Companies operating in red oceans typically have smaller profit margins, experience more competitive pressure and have a harder, more stressful time in general.
The book then goes on to explain that you don’t have to dive into these overcrowded markets. You can instead head for open water and seek out your own “blue ocean” (an untapped or underserved niche). These spaces are less competitive, allowing you to more easily establish a position in the niche (and even become the dominant force in it).
Thirdly, you can also get a free copy of my Customer Personas Workbook. Rock-solid customer personas are the foundation your niching efforts are built on. In this PDF, you’ll get my step-by-step system for getting in the heads of your target market, deeply understanding their needs, and effortlessly tailoring your business to their desires. This is the exact stuff I do with clients every week as part of my coaching practice, and some of the highest-ROI work you can do as an agency owner.
Finally, we have to face up to reality – not all niches are created equal. Some seem great on paper, but don’t pan out like they should when it comes to overall market demand. And one of the best ways to gauge how viable a niche is? Keyword research.
One of my favourite keyword research tools is Keywords Everywhere. This free browser extension gives you access to tons of keyword-related info that you’d otherwise have to pay for via expensive Adwords campaigns and the like.
You can also consider Neil Patel’s namesake app: another great resource at your disposal.
And if you don’t mind spending a little money, you should check out Ahrefs, which has tons of useful content for researching a niche, and positioning yourself within one.
Using tools like these, you’ll be able to research your chosen niche & associated keywords in detail, assessing its viability without committing lots of money and time to the cause.
We’ve covered a lot of ground in this article. To help keep this actionable, I’ve outlined the very next steps you should take to start the process of niching your agency.
If you’re interested in getting your hands on this free One-Page Action Plan, click the picture below for instant access.
The value of having a clearly defined niche cannot be understated. In my experience, niche agencies outperform generalist ones in almost every way. They:
Running a niched agency doesn’t entrap you – it frees you to build a business that delivers great results to clients, earns you the fees you deserve, and allows you to work on projects you’re excited about.
Your ideal niche is at the intersection of profitability, your ability to deliver results to clients, and what you’re excited about (Money, Passion and Results). Making anything else your focus is unsustainable in the long run.
You can also think of niching in terms of geography, industry, service and the problem you’re solving. Remember, these are just four different ways of considering how you might differentiate your business from your generalist competitors.
Once you’ve picked a niche, you have to commit to it. All of your outbound communication (including your website) should demonstrate your understanding of that niche and your ability to solve their problems. Websites or ads that miss the mark with this will hold your agency back and cause you to lose out on lots of business, so it’s worth paying attention to.
Having a clearly defined niche to serve is important in any industry. Web design, marketing, 3D architectural rendering, and even for coffee shops – businesses need to pick a niche to serve above all others if they hope to succeed in these spaces.
My aim with this article was to teach you everything you need to know to start niching your business today. With the tools, processes, templates and frameworks we’ve discussed here, I’m confident that you can:
I’d love to hear about your experiences with niching, so please reply in the comments below with your thoughts to these 2 questions:
I look forward to reading your answers below!
P.S. Don’t forget to download your One-Page Action Plan by clicking the image below.