You’ve heard this tale before, or perhaps you’re part of it—an aspiring digital agency launches with an ambitious client roster and robust projections. But where does it go wrong? The need for effective marketing through digital platforms and the World Wide Web, then why is it that at the same time most digital marketing agencies are still struggling to grow their business?
Generally, agencies fail due to one or more of the following reasons:
When there’s no clear, long-term vision, the agency has no idea of how to grow beyond today.
“Most of the time the agency doesn’t have a clear, long-term vision for what they’re doing, or they lose sight of the vision and their focus gets lost in the execution. They need to constantly keep asking themselves: What is their larger vision? Are they still passionate about it? How are they going to grow in the future?”
Agencies that do not have a long-term vision are bound to fail. Even with those digital marketing agencies that have a clear, long-term vision and business objective in mind, as they move forward, they tend to focus only on their revenue growth, and end up getting trapped in only execution, without really thinking about what will happen in the future when there is no more growth left. This is when agencies usually see a fall.
They need to constantly evaluate their value proposition, understand their strengths and weaknesses, and work on them while keeping their long-term vision in mind.
The tech industry is ever-evolving, and when agencies fail to adapt to those changes, they fail to grow and fall behind the competition.
“Tech is changing everyday. Are digital marketing agencies changing at the same pace? Who is leveraging the new tech? Only a few big agencies and risk-takers! Majority of the industry is still not open to new technologies.”
As the digital landscape changes, digital marketing agencies need to change, too. Agencies still think they need a bigger workforce to grow and deliver a great service. They don’t know how to leverage new technologies. Even today, most agencies are using decades old technologies, they do not know how to run a lean digital business, how to manage customer interactions, provide a better client service and a satisfactory customer experience that is in accordance with the changed needs. Thus, with no change in business strategies, they cannot provide customer satisfaction and lose their competitive advantage.
To be truly successful, digital marketing agencies need to pivot and change their approach, adopt latest technologies that allow for a more transparent business model. Such agencies are much more likely to succeed. Although the change is scary, in mindset and practicality, it is something that can be rewarding in the long term.
Not just the tech, but the market is changing too. But many agencies don’t even recognize this market shift, much less the resulting change in client needs, let alone being able to meet them!
“What’s important is that you become part of the change or be disrupted. Digital marketing agencies that are successful today are those that are willing to embrace change, innovate and adapt to meet the needs of their clients. Conventional marketing agencies don’t just lose out on new opportunities and potential customers, they also risk losing their existing client base!”
From artificial intelligence to the Internet of things, the tech industry has undergone a digital transformation and is growing at an alarming rate due to the pandemic. It’s the era of digital disruption. And as with the changing tech, the target market needs have changed too. With expectations of flexibility and speed higher than ever, patience is a premium that most clients are no longer willing to pay! As customer experience becomes the new success factor, it is imperative to keep clients at the centre of everything, and this can only be achieved by understanding the new customer needs and changing the digital approach to invest in agency business model innovation and leveraging the latest technology to fulfill those needs.
Agencies function as cheap labor factories instead of being creative labs and delivering real value.
When an agency has a business model such that it jumps from one project to another, they’re simply fulfilling its contract rather than doing quality work. They’re not delivering value. They’re not making an impact. With this business model, in the long run, these agencies lose clients and thus revenue.
“The secret is to stop thinking of digital marketing agencies as a “cheap labour factory” and start thinking of them as a “creative lab.”
When you constantly put yourself in the mindset of working as a creative growth lab, it changes how you interact with your clients. The focus shifts from just delivering a finished product to having a long-term relationship with your clients. You stop thinking of projects as something you do to fulfill a contract, and start thinking of projects as experiments that make their, as well as, your business better.
Agencies must constantly invest in experimental approaches, constantly test new marketing channels, and constantly optimize their performance so they can get more sales from existing clients, as well as, find new clients.
A lack of shared vision and ownership between the leadership and the team weakens the agency and leads to its downfall.
“It’s not that the founder has a vision and the team follows. If the values and the vision aren’t shared by the team, then it won’t materialise.”
Agencies who do not have a strong vision of where they want to go tend to be less productive. In the same way, agencies that lack a shared vision tend to be even less productive. However, when this is missing, it will affect how the agency operates and that will ultimately affect the bottom line. Most digital marketing agencies fail here. When an agency leadership fails to motivate employees and give them opportunities for business growth, it is just left with a bunch of disinterested, salary-drawing employees.
A team is bound together by a shared vision and sense of ownership and that allows them to align their efforts towards a common goal and play bigger than they could play alone. This will lead to stronger relationships with clients, higher retention rates within the company, and better overall results for the agency.
This marriage of shared value and continuous innovation is what helps digital marketing agencies to not only survive, but thrive and grow. What are you doing to ensure that your agency is fit for the future?