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What The Summer Of 2020 Is Signaling To Digital Agency Owners And What To Do About It

Posted by Mike Lieberman on Aug 14, 2020 8:30:00 AM

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Tough Times for Digital Agencies AheadAll The Signals Are There, If You Stop Long Enough To Notice Them

Running a digital agency over the past few years has been challenging but running one in 2020 is extremely challenging. Who would have thought we would be dealing with a global pandemic, recession, political uncertainty, and protests in the streets?

Having run and grown a successful agency over the past 17 years has taught me a couple of very valuable lessons. The biggest is being able to notice signals and make adjustments to our agency based on those signals.

It helped us get through the financial crisis in 2008. It helped us get through the explosion of inbound agencies and it’s helping us navigate uncharted waters today.

Today, I’m going to share some of the signals I see now, what parts of your agency are going to be impacted by those signals and what to do about them, so that you can be proactive instead of reactive.

Here’s hoping 2021 is a lot more positive than 2020 has been to date.

Business Strategy

There has been a lot written over the past few years about business strategy for agencies. Niche down and pick a vertical. Niche down and pick a specific tactic to focus on like video or website design. Niche down and pick a specific technology like HubSpot.

This is good advice in normal times, but these aren’t normal times.

Some other experts are advising agencies to say YES, more than they say NO. This means take business you might not ordinarily take during difficult times. Then, go back to your “Say NO more” strategy when things go back to normal.

Also, good advice. But what if the world doesn’t ever go back to normal? What if there is a new normal?

I see signals that are pointing to a world that does NOT go back to its old ways. This means you have to find a way to not only survive but thrive in the new normal.

This means crafting a business strategy that allows you to take advantage of this new normal.

This might mean providing new services to clients like helping them with virtual selling.

It might mean helping clients shift from live events to virtual events.

It might mean working closely with technology companies to help clients automate parts of their marketing and sales execution that has been historically people-focused.

It might mean expanding a vertical, adding a vertical, adding a related set of services or even moving up to work with bigger clients who are more stable and investing more in digital marketing.

My point here is your business strategy should be highly pliable right now. There are openings for opportunities in the market and there are going to be new openings emerging.

You want to be aware of your surroundings to notice those openings. You want to be flexible and agile enough to move quickly towards those openings and then you want your team to be experienced enough to adapt their delivery to take advantage of these new opportunities that are just now emerging.


If you’re reading this blog, then I don’t have to explain the role technology has had in reshaping marketing, sales, and soon customer service execution. Since the first time I logged into HubSpot, my world was changed forever.

But today there are many more technologies coming online. I don’t think working with just one is in anyone’s best interest. It’s not in your best interest as a digital agency and it's not in your client’s best interest either.

One of my biggest regrets is not spending more time with technology when we first became a HubSpot partner back in 2009. Back then we should have reached out and formed partnerships with six other technologies including Marketo, Salesforce, Eloqua, SharpSping, Zendesk and a few other niche players.

Each of them has a specific niche where they play and when you look at their strengths, there is little overlap. We could have been great and valued partners with each of them.

Now going back and trying to build these relationships in today’s market is much more difficult.

But there are new players coming into the market every day. Those are the technology partners you should be looking to add to your technology portfolio.

Having technology as a major part of your digital agency has many, many benefits.

  • You should get passive income from commissions
  • You should get leads from these partners
  • You should get exposure to their customers which can drive business opportunities
  • You should get joint marketing opportunities to help position your agency
  • You expand your reach and network by working closely with these companies that in most cases are growing extremely quickly

You can start positioning yourself as technology agnostic, which gives you the flexibility to move from tech to tech, based on your client’s or prospect’s needs. This allows you options in a world where the more options you have the better off you will be.

Having a variety of technologies in your shop comes with its challenges. But these are easier to overcome today than ever before. Expertise, resources, training, and technical know-how can be acquired very quickly without distracting the rest of your team from their current duties.

In almost every case, technology companies are happy to help get you up and running, support your needs, and help you with client projects.

With more and more sales tech, marketing tech and service tech rolling out,  this has to be a big signal that should indicate you start looking at how your digital agency can use technology to help clients and help the agency grow.

Client Retention At Digital Agencies Is CriticalClient Retention

Square 2 hasn’t lost a client since the COVID lockdown in March and only two clients in 2020. This is unparalleled in our history. Not that we had a retention problem, but clients were constantly graduating and bringing their program in-house. Clients were hiring digital teams and we were happy to help them with the transition.

That has stopped. Not only have clients stopped hiring in-house, but they’ve actually reduced their internal teams.

Part of me thinks some clients are less comfortable switching due to the macroeconomic challenges every business are facing, but I also think we’ve done a better job working with our clients, giving them a better experience, bringing more senior resources to their engagement and going wider in our areas of focus for them.

You should be seeing similar trends.

If you’re not then you need to take a look at your team, our engagement, and the service experience your clients are getting from you. Now is the perfect time to look very closely at who your clients are interacting with, what your team is doing for them, where the true value is coming from, and of course, the results you’re getting for clients.


I’ve noticed a lot of agencies are hiring. This is due to the shift from in-house to an agency. I’m sure of it. This is a good time to look at your team. There have never been more high-quality people on the market. Many of these people are event people but there is an opportunity to add great people to your team or even upgrade your existing team with even better people.

I’d suggest an active hiring process that is continually looking for, sourcing, interviewing and assessing potential team members.

I’d also suggest what we call “try before you buy” or starting with a contractor relationship. Once you like them and they like you, moving to a more permanent and full-time relationship could be a very natural next step.

We like to have open conversations about where our journey together could go. As long as we’re both on the same page from the beginning, we’ve managed team transitions like this many times, and this has created some of the best long-term relationships with some of our most successful team members.

Team Member Retention

In most agencies, the fear of having to downsize has passed at least temporarily. As I stated above, many agencies are hiring. This is going to put extra pressure on your current team. A few months ago, you probably thought, “No one is leaving in the middle of a global pandemic.” However, that retention impact appears to be over.

I’ve heard from a number of agency owners who have lost team members to other agencies which means you have to get back to paying extra attention to your crew.

We’ve started doubling down on our culture, and you should consider something similar. It’s easy to get caught up in the day to day and put team members and culture on autopilot, especially when you’re not going into the office.

We’ve identified celebration days, reestablished days to work, and play together, even if it's remotely. We do something special for birthdays, anniversaries, holidays, and special events creating a remarkable experience by shipping them something fun and making sure we celebrate as a team.

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Nothing has gotten easier from an agency pricing perspective. There is going to be downward pressure on pricing. This is going to continue if not accelerate through 2020 and into 2021. I think it's safe to say there is no way we’ll be able to raise prices until the number of agencies that do similar work drops dramatically.

Further complicating the situation is that many agencies are taking clients on at whatever pricing gets the deal done regardless of whether they’ll make money on the account or not.

Additionally, agencies are selling smaller projects like audits, blueprints, and training making it tougher to get long term strategic relationships and making it harder to explain why these short term solutions (while cheaper) will only get them so far towards their business goals.

At a time when the digital transformation of marketing, sales and customer service should be every companies’ top priority, many agencies are still skimming the surface to grab a few thousand dollars and a HubSpot MRR credit.

To position your agency against this, consider splitting out strategy and delivery. By thinking about these two services differently, you can staff and price the high-value strategy work at high rates and use experienced people while you price the low-value delivery work at lower rates and use more value-oriented contractors to deliver this type of work.

Then make sure you have a platform, approach, methodology, or a system that adds additional value.

There are major corporations who are looking for high value, high investment digital transformation that includes strategy, tactics, analytics, and technology. These projects are long-term, strategic and companies are desperate for agencies who can bring fast start, methodology and proven results at the party.

If you don’t have this yet, now is a good time to start crafting it, so you can continue to differentiate and position your agency against all the other posers and pretenders.

Growth Planning

Back during the financial crisis and recession, we used to say, “Flat is the new up.” We managed through 2008 and 2009 very strategically. But growth wasn’t a key business objective. It was survival mode and we did well.

This doesn’t feel like the same situation, at least right now. Later in the year and early 2021 might look more like the recession of 2008, but right now agencies can continue to be in growth mode.

However, growth might not look like it did at the end of last year.

Today growth might not include an increase in full-time team members. Instead, it might look like an increase in your contractor team.

Today growth might not include adding a slew of new clients. Instead, it might look like earning more and more business from your current clients.

Today growth might not include adding new marketing services. Instead, it might look like stretching out of marketing and into sales as companies rethink their entire sales execution.

Today growth might not include adding a new vertical. Instead, it might look like helping clients lean into their own customers, driving better marketing campaigns to customers, extending their share of wallet with current customers and helping them improve their own customer retention numbers.

Today growth might not include moving up the HubSpot partner tier. Instead, it might include adding new technology partners, gaining commissions from other partners, doing joint marketing with new partners and working with new partners to introduce you to an entirely new set of potential clients.

Yes, growth is still the plan. Growth can be part of your plan, even in the middle of a pandemic. We just have to think a little differently than we did at the end of last year.

New Cohort for 2020 - The "Next Normal" Agency Cohort

Start Today Tip – We’re all crazy busy but carve out time to focus on your agency. Focus on your hiring plan, on your team retention plan, on your technology plan, on your pricing, and on how you deliver engagements to clients. Cash flow might be more erratic than in past years. With businesses responding to outside influences, with long term retainers on a ventilator and with more project work in the shop, plan for a bumpier cash flow experience. If there is one thing that I am certain about, it's that things are going to change. We recommend creating a Plan A, Plan B and a Plan C. This will give you some confidence that regardless of what happens, you’re ready to go. Now you can focus on taking care of clients, team members, and cash. We’ll get through this together and the next normal will offer a few amazing opportunities. Those who see the signals will be there to act quickly.

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

Topics: agency growth strategies, 2020 planning, Response to Covid-19

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