How Your Digital Agency Can Win With Growth Marketing
As a digital agency owner, you face a fundamental strategic issue: how to grow in the environment where client’s performance expectations are increasing, while fees are being squeezed? You need to find new ways to add value to your client relationships and new models of revenue generation, and growth marketing provides the answer.
Earlier, we laid out what’s driving the change, and now we’ll talk about how to move forward and what you need to do to succeed with growth marketing.
According to the 2016 report by the Society of Digital Agencies, the number one reason why clients end their agency relationship is the perceived discrepancy between pricing of agency services and value provided.
Marketers are becoming more demanding with their agencies, as they feel increasing pressure to prove the ROI of agency relationships and deliver growth on leaner budgets. They are scrutinizing costs and squeezing agencies to become more efficient, while proving the impact of their work on key business metrics, such as conversion rates and customer engagement.
The scope of work and relationship is expanding too. Instead of a vendor for campaign execution, clients are looking for a partner to reach and engage audiences across multiple touchpoints, launch new products, and enter new markets.
Digital agencies are struggling to catch up with client expectations. Continuing to do business as usual, they fail to see the root cause and blame client departures principally on new management. It is no wonder that client satisfaction levels with agencies remain low.
Existing agency model needs to evolve
In this new reality, where clients want more bang for the buck, agencies need to re-think the way they approach work or risk losing business in a hurry. This is how Paul Roetzer, the author of The Marketing Agency Blueprint, describes the new breed of marketing agencies:
These emerging leaders are tech-savvy, offer integrated services, hire and retain versatile talent, and profit from diversified revenue streams. They thrive on change, and continually apply shifts and advances in technology to strengthen their businesses, evolve their services, and deliver greater value to clients. These agencies are risk takers that fight to remain nimble, always thinking like startups and acting like underdogs.
To become growth marketing machines, agencies need to mobilize internal changes in a number of key areas.
Embrace growth mindset
If you look deeper into a growth marketer skillset, you’ll see that in many ways it’s the same old digital marketer. What really sets growth marketers apart is their mindset.
The mentality of trying and failing fast doesn’t exist in the agency world. But that’s what makes growth marketers successful and agencies need to learn to treat failure as part of the process.
When serving clients, agencies need to re-allocate time and focus from optimizing tactics in a few pre-defined channels to experimenting with diverse channels and tactics. They also need to get comfortable with being bold and pushing convention-breaking ideas to find disruptive growth that their clients are looking for.
Own the metrics
Digital has offered the opportunity to agencies to become data-driven and more accountable. Yet, many measure their effectiveness against unimportant, middle-of-the road metrics, like visitors or click-through rates. Judging by these, the agencies are often winning.
But businesses care about metrics that matter to their top and bottom line — engaged users, cost per acquisition, customer lifetime value. Owning these metrics has been risky because winning here is much harder and because agencies don’t control the product experience. Growth marketers are changing that by eliminating the disconnect that often exists between an agency and its client’s product team.
Think process, not campaign
Agencies must get out of the campaign mentality and think of growth as a continuous process. Sure, growth marketers also run campaigns, but by playing the long game, they improve their ability to deliver on growth objectives for their clients. And process thinking dovetails well with the agencies’ desire to transition from the less-profitable hourly or project-based billing to a recurring billing model.
Align agency structure
The classic agency model with bloated creative teams and layers of management is quickly becoming irrelevant as it blocks the agency’s ability to innovate and move quickly in line with client demands.
Successful digital agency of today must be built on flat structure, in which small, fluid teams comprised of T-shaped talent are being led by growth strategists — experienced growth marketers capable of identifying client problems, developing growth roadmaps, and managing teams to deliver solutions.
Digital agencies will also benefit from greater open-sourcing of talent and capability. It allows the core team to remain nimble and creative and control the strategy, while amplifying its execution through proven experts and partners.
Slow decision-making plagues most agencies. In today’s digital world, you just can’t afford taking too long planning, designing, building, and perfecting your strategies and deliverables. The channels and customer preferences change quickly, so, as an agency, you need to have a really agile team and process if you want to meet client expectations and drive growth.
Succeeding with growth marketing
Once you’ve got the right fundamentals in place, how do you win and succeed with clients?
Define your focus
If you are trying to be all things to all people, you are setting yourself up for failure. Focus and deep sector expertise is precisely what makes many growth marketing agencies successful. By having a repeatable growth playbook, they are able to discover growth drivers faster than someone with a broad sector focus.
Many clients mistakenly think that growth marketing is a quick route to massive success, so it’s important to manage client expectations from the get-go.
Results. Clients hire agencies to achieve growth. Agree on KPIs that lead to growth for the client — conversions, sales, leads, signups, engaged users. Guide client through the typical ROI that it can expect to generate based on your past experience.
Process. Be clear about the process. Explain how you prioritize, run, and analyze experiments. Growth marketing involves testing out a lot of hypotheses most of which will not succeed, and the client must understand that failures represent true learning opportunities.
Timeframe. Marketers on the client side want short-term results because that’s what they are judged by. But results with growth marketing won’t come fast. You need to make sure that clients give you a long enough runway to deliver the desired outcomes.
Start with a strategy
Growth marketing does not start with SEO, PPC, or other specific specialties that an agency may have. Always start with the client’s business goals in mind, develop a strategy, and then choose tactics to experiment.
Growth marketers have lots of channels and tools at their disposal, but they only use those that are right for the job at hand. And having a growth strategy will help you put together the right team for the client.
Establish trust with small wins
Growth marketing requires a buy-in from everyone on the client side — from the CEO down. You must demonstrate clear wins in order for the client to commit to giving you responsibility and budget. And you need to build a lot of trust. That’s because the process involves making changes to the company’s products, and the whole company will have to be on board to put those through.
The best way is to start small and focus on the low-hanging fruit. Taking an incremental approach allows you to gradually build trust within an established culture and help the client buy into the new approach.
Gunter Blanckaert, Global Head of Marketing Technology at Philips Lighting, describes the experience of adopting growth marketing at a global corporation with more than 35,000 employees:
When you start with small projects and you can quickly show results to colleagues and management, people are more easily convinced. Within the global digital Philips Lighting team we officially started using the growth hacking methodology in the beginning of 2016 and now you can already see that it is becoming the standard way of working around here.
Stay true to the brand
Brand equity takes years to build. With startups, there is no brand equity to erode, but as a growth marketer working for an established brand, you want to experiment and be bold only as long as you don’t put the brand in visible jeopardy. So, before you run an innovative campaign or pursue a novel tactic, think about how it will affect the perception of the client’s brand by its customers.
Growth marketing teams need to be able to make their ideas happen. A client expects you to run growth campaigns end-to-end without relying on its resources since everyone at the company already has a full-time job.
So, whether it is storytelling, creative, technical marketing, design, programming, or data analytics, you have to make sure that you’ve got all areas of expertise covered, whether in-house or outsourced. If not, your ability to deliver on growth KPIs for your client will fall short.
Become client’s growth partner
A digital agency needs to position itself as a growth partner working inside the client’s business. A relationship in which a client views the agency as an extension of its own team has the biggest chance of producing measurable results and being sustainable.
In practical terms, it means a much deeper immersion into the business to understand the product, value proposition, customer segmentation, and competition and a closer integration with the client’s product team to help shape the product experience in order to drive growth.
Hire proven growth talent
As a digital agency hiring for a growth strategist or another critical role, you cannot take chances and hire for potential. You need someone who can start delivering value to the client from day one.
With all the information online, courses, and bootcamps out there, it is easy for many to claim the title of a growth marketer. But make no mistake — there is no substitute for experience.
Growth marketers that have deep expertise and proven track record of scaling businesses in a specific space are able to quickly inform a growth playbook for a client in the same industry. They rely on experience to identify and prioritize growth opportunities and are able to get to growth wins faster.
The shift from campaign to process mentality is changing the scope of the agency offering and the kind of skills required from junior agency talent. On the marketing side, look for strong generalists with complementary strengths, a growth mindset, passion, work ethic, and desire to learn.
If you are a small agency, you don’t have the time or money to develop the breadth of expertise in-house. So, when it comes to bringing proven growth talent to your client engagements, do not limit yourself to your internal capabilities. You can source proven growth experts for your agency on a project or contract basis through your own network or a growth talent marketplace.
Growth marketing is the future for digital agencies. With clients expecting a new approach and a growth partner, you need to decide whether you will lead the way or fade into irrelevance.
Originally published at growthengineers.com.