CEO of Agency Management Institute, serving 250+ marketing agencies to help their owners build profitable agencies that evolve and scale.
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Every new year feels like a complete refresh, but 2021 is one for the books.
As the world awakens from quarantine and social distancing restrictions, the energy in the marketing industry grows palpable. As an agency owner, you’re probably eager to define your new normal and achieve success in the post-pandemic era.
As an agency management consultant, I frequently ask agency owners what goals they’ve set for their businesses. Without exception, the first — and often only — goal they cite is more revenue. Unfortunately, revenue is a vanity metric. Bringing in more money might make you feel good, but it doesn’t always indicate meaningful growth. If you’re only monitoring and measuring revenue, you’re doing yourself a disservice.
Setting other growth goals is the key to moving forward and determining success. For example, evaluating your adjusted growth income (gross billings minus cost of goods) gives a complete picture of your company’s health. If you can manage to grow your AGI by 10% to 20%, that’s a healthy goal — especially when you consider that many agencies lose about 10% to 15% of their AGI each year to attrition (e.g., shrinking budgets, clients leaving, etc.).
However, there are other important metrics to measure separate from financial gains. Keeping an eye on these four growth goals will help you be strong, stable and sustainable, which is critical during a year as pivotal as 2021.
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1. Quality Clients
It’s important to maintain high-quality clients so you can set your agency up for future success. Seek out and aim to retain clients who appreciate you, pay you on time and give you big projects that suit your agency’s skill set.
If things aren’t working out with a particular account, it’s okay to let them go. Sometimes certain relationships just aren’t good fits, and it’s better to invest your time and efforts in clients that match your culture, wheelhouse and work ethic.
2. Reduced Client Concentration
It’s time to check whether you have any “gorilla clients.” Do any of your accounts make up more than 25% of your AGI? If so, that’s a high client concentration risk.
Losing a gorilla client can have a negative ripple effect on your agency. The best strategy is to even out your load by either adding more clients or securing another large client that reduces the percentage of your AGI that the gorilla client occupied.
3. Employee Retention and Satisfaction
Check in and evaluate your employees the same way you do with clients. What have they learned over the past few months? How do they handle crises? Are they going above and beyond, or are they just meeting expectations? Steady employees are dependable, but you need a few high achievers to propel your company’s growth.
Try taking Disney’s approach: Focus on your cast members (employees) to improve your visitors’ (clients’) experiences. Investing in your employees’ engagement will equip them to keep clients happy.
4. Agency Credibility and Authority
If you can establish yourself as a thought leader in the marketing industry, you’ll likely see tremendous business growth. Work to get published in media outlets, quoted in books or podcasts and invited to speak at conferences. Create a bio for yourself, and pitch your ideas to industry publications. Sign up for media queries that you can answer via email.
The more proactive you are, the more success you’ll have. Once you start building a name for yourself, the more likely it is for people to come to you for your expert insights and service.
While keeping an eye on your revenue is essential, it can only tell you so much about your growth. Instead, focus on these four meaningful metrics to measure and maintain the health of your agency. The post-pandemic era is the perfect time to reimagine success; don’t miss your chance to redefine your growth goals for 2021 and beyond.
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Author: Drew McLellan, Forbes Councils Member
