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Can An Agency Survive and Thrive With Strategy Only Consulting Services?

Posted by Mike Lieberman on Sep 18, 2019 7:30:00 AM

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The Sttategy Only AgencyIt appears that one of the bigger HubSpot partner agencies is moving to “strategy only” services. Just consulting on how to grow, no delivery services, no content, no websites, no paid media management, no organic SEO work—just thoughts on how to drive revenue.

I’ll preface this by saying my knowledge of the “news” is second hand and via social media primarily, so let’s have a more conceptual conversation about this idea, as opposed to commenting on this specific agency’s new strategy.

Can an agency exist to just offer strategic consulting services and no delivery?

Of course, the answer is yes, they can. We considered something similar earlier this year so the thinking behind the idea is solid in my opinion. However, there are some significant challenges and figuring out the retainer is NOT one of them.

The Thinking Behind The Strategy Only Agency

I’m not surprised to see this. The thinking behind being a strategy only agency is smart. When you look at the work you do for your clients where do most of the challenges fall? Delivery for sure. The client didn’t like what you wrote. The website was late. The PPC campaign under performed. There are a ton of potholes in the delivery.

On the consulting or strategy side, it’s more like predicting the weather. You’re not really accountable for much. You tell clients what to do and they do it. If they don’t do it right or what they do doesn’t perform it’s more on them than you. Shifting accountability to the client is smart.

When you look at your agency and you apply Hedgehog thinking (Good To Great reference) you might ask, “What are we good at and what are we not so good at?” This might highlight that your agency is good at telling people what to do and not so good at actually doing it. This might lead you to consider sticking with what you’re good at.

When you’re looking to differentiate your agency from the 5,000 other digital agencies in the HubSpot ecosystem, why not focus on strategy and let the other 4, 999 agencies do the work? Again, this makes sense to me.

Finally, we’re all looking for improved profit margins and that means selling services with high value and high margin. Strategy, thought leadership, guidance and advice is high-value, low margin work. You can make more money doing this than building a website, creating copy or running an email campaign. The delivery is highly commoditized and just getting worse. Let’s do what makes us the most money. Again, smart!

But does all this logic and sound thinking outweigh the challenges? There are plenty of them and after running an agency for 17 years, I think I have some solid time invested in understanding the challenges associated with a “strategy only” approach.

Do People Value Strategy Work?

Clients don’t value strategy. Don’t take my word for it. Ask anyone who runs an agency, ask big agencies, small agencies, agencies in all types of verticals who specialize in all types of services.

I’m not disrespecting anyone with these comments. It’s perspective and perception mostly.

For 17 years, Square 2 has had a “Strategy Before Tactics” mantra. We’ve seen firsthand how thinking before acting produces 10x better results. But when it comes to paying for, valuing and participating in strategy, clients want to skip it.

They think they have it. They don’t think they need it. They don’t want to pay for it.

“We know our personas.”

“We have a message already.”

“We don’t really want to be different.”

“Can we just get started with the tactics?”

After further review, their personas are incomplete. Rarely do they have the online buyer behavior profile we need. Their message is generic, too broad, not nearly as disruptive and unemotional. They look and sound exactly like their top two competitors, so no prospect would ever know why they should work with them over a competitor.

So, yes, I guess they do have the strategic components, but they are not nearly enough to drive any revenue growth.GET INTO A COHORT TODAY

 

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In addition, they don’t have the analytics or the proper technology stack to upgrade their marketing and sales execution to 2020 levels, they haven’t completely aligned sales and marketing to deliver a remarkable prospect experience, they don’t understand the levels of content required to increase leads to the levels they require and they don’t understand the relationship between investment and results. I could keep going.

Finally, their legacy buying behavior has been stuff, not strategy. Companies buy stuff from agencies, websites, PPC campaigns, PR releases, email campaigns, rankings, content items, videos, and graphic design.

By moving to strategy only you’re asking clients to make a major, environmental, cultural, and behavioral change. It’s a very big ask.

Can You Have A Real Impact On Your Client’s Business?

Of course, you can, if you find the right client. Now think about all the clients you’ve worked with. How many say things like this?

“Of course, we want everyone at the company to start creating content for us tomorrow. We’ll change their job descriptions, even comp them for writing content so we can get the entire company involved.”

“Yep, we’ll hire four new people tomorrow to run our marketing and sales the way you suggest.”

“We’ll invest exactly what you say and we’ll by all the technology tools you recommend even though we’ve never spent anything close to that on technology before.”

“We’ll get everyone in the company together next week for an all-hands meeting where you can tell us exactly what we need to know. You can show us all the examples of other companies who have done this and been successful. You can train us on why we need to change our entire company culture.”

“We’ll change our sales process too so that it aligns perfectly with your guidance and advice.”

The sad commentary is that this is the right advice. But finding companies who want to do the heavy lifting to make this execution a reality, stick with it for over 12 months and be unwaveringly patient as it sets up and work is another big ask.

In 17 years, I’ve found only a handful of companies with the leadership, foresight, and desire to follow through.

What I have found many more of, are companies who are open to giving up control of their program to us and have us be responsible for results. We create the strategy and execute that strategy to produce the agreed upon and desired results. Strategy AND execution are how you produce results.

What About The Looming Recession?

This approach is definitely aligned with today’s trend to hire in-house. Today companies are hiring a lot. They’re hiring content creators, videographers, digital marketing managers, and they are taking their programs in-house because they think they can do it on their own.

They have new tools, online resources, and conferences that encourage them to think they can do it on their own. The software companies tell clients how easy it is to produce results.

Buy Drift and watch your sales leads skyrocket. Buy HubSpot and your lead flow will increase. Buy Ceros and you’ll be able to produce all the eBooks you need. You and I know it’s not nearly that easy.

Our experience is that companies will try to do it on their own, end up with disappointing results and come back to the experts at the agency. We’ve seen this time and time again. Clients take their programs in-house only to call us up a few months later and want our help again.

They are all trying to do it on their own, so consulting and training services makes a lot of sense today. But what about tomorrow?

Square 2 survived the last great recession with a single story. Companies who market through the recession outperform their competitors by a factor of 8x post-recession. Don’t stop marketing, but outsource it to us instead of hiring or caring that fixed cost associated with overhead.

In the not so distant future, companies are going to be firing those newly hired marketing people. They are going to be cutting their marketing expenses but still looking for answers on how to weather the storm. If you can only tell them what to do and not help them do it, your value is going to be very limited.

In the end, "strategy only" agencies might make sense in some situations. However, I don’t see this as “the answer” to the challenges facing the agency community.  Also, I’ve had too many prospects ask me, “But you can help us execute, right?” To think that saying, “Nope, we don’t do that,” is the right way to help companies grow their businesses.

Teach them to fish and they can feed themselves for a lifetime. You’ve heard this before. That’s not what we’re looking at here folks. Driving revenue, generating leads, creating sales opportunities and closing new customers is not fishing, it's more like rocket science. I don’t think we can teach people rocket science. We need to help them get the business outcomes they need by doing it for them.

Start Today Tip – Do you need to differentiate your agency? Yes, you do. Should you do it with strategy only? Maybe. But I think you’d be doing your agency a much bigger service if you could teach your team how to generate better results, find the right tech stack and help clients understand why the technology is a critical component, integrate strategy on top of their tactics and show your clients how to find insights inside the data to produce better business outcomes for clients. Get clients better results faster, and you will be the strategic agency you aspire to be.

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