The Agency Growth Blog - For Owners Who Want Growth

The Top 10 Questions Agency Owners Ask Me And My Answers – PART 2

Posted by Mike Lieberman on Aug 25, 2021 9:15:00 AM

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Agency Owners Questions and AnswersSorry for the long pause between Part 1 and today's installment Part 2. I didn’t intend to take that much time off between posts, but my life has been extra upside down the last few months.

Besides taking care of all my agency clients, Square 2 has been going through some dramatic transformations, including adding a more technical engagement and doubling down on our Accelerator engagement.

Regardless, agency life goes on, and I’ve been wanting to get back to part two of this blog article for a while to answer the remaining five questions and continue helping other agency owners on their own journeys.

If you missed the last post, Part 1, and the other five questions agency owners ask me the most, check it out here.

Question 6 – What Are Some Ways We Can Differentiate The Agency?

This is perhaps the most important question and one of the most difficult to answer. What makes your agency different from all of the other agencies?

When it comes to winning new client business, if your prospects don’t know the difference between your shop and the other agencies, they’ll just pick the cheapest option. If you’re differentiated enough, then the price isn’t an issue and you can charge full value for the services you provide.

Ultimately, differentiation allows you to charge more, make more money, win more new clients, and then grow your agency. As I said, it’s the most important work any CEO or agency owner can do.

Here are some examples of solid agency differentiation:

Vertical Specialization – You focus your agency on working in only a handful of industries. This allows you to more deeply know your prospects’ industries and more efficiently deliver services. It should also help you deliver better results because you know the ins and outs of these industries.

Service Specialization – You select a narrow lane associated with the services companies need. For example, you only do email marketing or video marketing. Perhaps you only provide account-based marketing (ABM) services. This allows your team to be the expert at this small set of services you specialize in.

Delivery Specialization – You provide your services in a way that no one else does. At Square 2, we provide clients a dedicated team, not a fractional team, and we give them six months of work in just 30 days. This is probably the hardest area to differentiate in, but it’s also the easiest area to sustain a competitive advantage.

While vertical and service specialization might be slightly differentiated, it’s not creating a remarkable difference. For example, many agencies focus on the SaaS space, many focus on manufacturers and more are starting to work with only the cannabis industry.

There are a number of ABM-specific agencies, video agencies, and HubSpot technical shops. So while you’ll differentiate from the masses, it might not be significant enough to drive true differentiation.

Technology Specialization – You select a technology to focus on, like HubSpot, Salesforce, or Adobe. This provides you with a leg up over agencies that don’t have a focus, but again, there are many HubSpot shops, plenty of Adobe agencies, and even more Salesforce partners. While this is a solid direction, it might not be enough.

In some cases, agencies are combining a set of technologies into a tech stack and using that configuration of different tools to differentiate. This is better than picking just one, and while it narrows the number of opportunities, it does provide better differentiation in most cases.

Your Team And Culture - This is another way to differentiate. Are you hiring kids out of college or more senior people? Most agencies, especially the bigger ones, have younger, more junior team members. Some of the smaller agencies might have a more senior team.

At Square 2, it’s taken us years and various iterations to find an aspect of the agency that is truly remarkable and an aspect that NO OTHER AGENCIES can say they do. This is what you’re looking for.

Sometimes it's a combination of several elements that when put together does create a remarkable agency and a remarkable experience for our clients.

And while it’s hard, you should keep pushing, keep working and keep trying to find that one thing you do well or that one thing you do that no other agencies can say they do too.

Question 7 – What’s Wrong With Our Sales Process?

I work with a lot of agencies, and when I ask to see their sales process they can’t show it to me. Your sales process has to be documented and visual. If it’s not on paper, you don’t have one.

Once you have a sales process, here’s what might be wrong with it or what might be preventing it from helping you close more new clients.

First, is your process designed to guide your prospects? Is it designed to make them feel safe? Does it educate them? Or, like most agencies, is it created simply to get a proposal together? This is a big change.

The proposal is NOT the end game. Getting your prospects to feel safe with you and your agency is the end game. Getting them to want to work with you is the end game. Getting them to trust you is the end game. If you get them to know, like, and trust you, you’ll close 80% of your opportunities.

You need to go back and design a sales process that creates those feelings in your prospects. Yes, feelings are important. If prospects don’t know, like, and trust you, they’re never going to hire you.

Create a process that is rich in educational content. Make sure you understand all of the questions your prospects could be asking you and then create content that answers those questions. Share that content with your prospects generously and frequently.

Finally, track the performance of your sales process in the CRM. Where are you running into friction with prospects? Where is the process slowing down or running into trouble? How engaged are prospects with your content? Is it helping them move along? What is your close rate? How long is your sales cycle in days?

Tracking these metrics allows you to measure the enhancements and upgrades over time. Make sure you work on the sales process every month. Continuous improvement and ongoing optimization are the secrets to improving your sales process.

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Question 8 – Do I Need To Hire A Sales Rep?

You might, but you might not. The answer to this question has everything to do with you.

I’ve met two types of agency owners over the past 10 years: Those who love to sell and those who hate to sell. Be honest with yourself – which are you?

I don’t mean you do it and you like it. I mean if you could choose one or the other, which would you pick as your primary responsibility at the agency?

If you select sales as your primary role, you might not need to hire a sales rep just yet. Instead, hire someone who loves operations and who loves taking care of your clients, allowing you to spend more time selling.

If you select client services as your primary role, then yes, you should consider hiring a sales rep.

But who should you hire? A professional sales rep from another agency? A professional sales rep from another industry? A professional sales rep from one of your tech partners? These are reasonable options, but I’d advise you to consider a different approach.

Instead, look inside at your client services team and try to find a consultant who is interested in sales. Perhaps they like the thrill of the kill or they want an opportunity to make more money. In my experience, consultants make the best agency sales reps because they’re going to transition better from consulting clients to consulting prospects.

Most importantly, they have the stories prospects need to feel safe with you and your agency. It’s hard to learn these stories. You have to live them. Telling a sales rep the stories and hoping they can share them authentically rarely works. But letting a consultant who lived the stories share those with prospects produces a sales process that is authentic and highly effective.

It’s not always whether to hire or not to hire – who to hire is often just as important.

Question 9 – How Important Is Points-Based Pricing?

The answer to the question is probably that it’s very important. But the real answer depends on what’s going on at your agency.

  • Are you over-servicing clients? Then points are going to help.
  • Are you having trouble charging full value for your services? Then points are going to help.
  • Are your clients asking about how long work takes or talking about hours? Then points are going to help.
  • Are you struggling to realize regular gross and net profit margins? Then points are going to help.
  • If the answer is yes to any of these questions, you should consider switching to points-based pricing.

I have a number of helpful articles on points-based pricing, so I’m not going into all of the details and benefits of points-based pricing. To find out more, check out these articles:

To Use Points Or Not To Use Points: That Is The Question

Points-Based Pricing And Why Agency Owners Continue To Struggle With How To Use Points 

Having Trouble Getting Clients The Results They Expected? Help Is On The Way

Overall, points-based pricing provides a framework to help agency owners with some of the more challenging operational issues facing agencies. It’s easier to keep clients on a budget, it’s easier to get full value for your services and it’s easier to plan client engagements in an agile and efficient way.

It’s also important that you go all in. I’ve seen agencies that convert hours into points. This is NOT points-based pricing, and this partial attempt at moving to points isn’t going to produce any of the gains discussed above.

Go all in or just stick with what you’ve been doing.

Question 10 – What Should I Do When I Have A Prospect That I Know Is Going To Be Difficult But We Need The Revenue?

Finally, the last question is going to be the hardest to answer.

First, the easy answer. Don’t take any new client that is not going to be a referenceable client down the road. Don’t take any client that is not going to be respectful and appreciative of your team. Don’t take any client that is not going to value your advice, guidance, and work.

Does this sound like you’re looking for a unicorn, a perfect client? Yes, it is, and often it’s not easy to uncover the true nature of your client during the sales process.

To answer this question, ask yourself: How positive are you that this new client is going to be successful with your agency? If you are positive and optimistic, you take the new client. If you aren’t certain but revenue is critical to your survival, you take the new client. 

However, if you are positive that this client is going to be a problem, I’d strongly encourage you to pass. I believe that you’re better off with a smaller agency that has better clients than a larger agency with difficult clients, clients that are canceling, and clients that are not referenceable.

Let me put it into slightly different terms.

It’s not worth any amount of revenue to work with a client for six miserable months only to have them cancel, write a negative review or not be referenceable. Remember, they’re miserable to your entire team, which could mean your best people leave. It’s not worth it.

If you’re going to be picking in the sales process, then you’re going to need more sales opportunities. This is why focusing on your own marketing is so important to growth. You have to generate enough high-quality sales opportunities to be able to pass on these mediocre opportunities.


And with that, I’ll wrap up by saying that running an agency isn’t getting easier ​​– it’s getting harder. You have to get your shop firing on all cylinders for you to grow. You have to limit your mistakes and do the hard work to set you and your team up for success.

I hope this article and part one of this article were helpful. Remember, if you have questions or want to discuss your agency with me, I’m happy to talk with anyone at any time.

Start Today Tip The best advice I can give you is don’t try to muscle along on your own. It’s too hard to figure out agency growth challenges without help. While you might be plugging along at $800k a year, getting to $1.2 million is going to be harder than you think. Getting to $2 million is even harder. The decisions you made that got you to where you are today won’t get you to the next level. Instead, work with someone who can guide you, advise you and educate you to skip the potholes, get around the detours and ignore the distractions that will hold you back. If these questions are the same questions you’re asking, let’s work together to get you to your growth goals faster than even you expected.

Agencies 2 Inbound – Helping You Grow Your Agency Beyond Your Expectations!

Topics: agency management, Questions from Agency Owners

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