Agency owners want to have a thriving business that focuses on creating tasteful projects for happy clients. However, they often find themselves staring at spreadsheets, fretting about finances, fighting fires, and wondering how to make things work. Here are five common challenges that agencies face and how you can overcome them and come out on top.
1. Resource Shortage
Agency economics can be a nightmare. Although clients typically pay a deposit and may make several installment payments throughout the project, the profit of an agency generally lies in the final payment. In addition, many clients tend to drag projects out with constant changes. Meanwhile, you have a range of outgoing bills to shoulder. Not having enough financial resources can lead to a resource shortage on all fronts—from employees to marketing budgets—that limits your ability to focus on growth.
Sometimes, resource shortage can improve with increased lead generation and more clients. However, unless you take steps to better manage your resources, the problem will continue to occur, albeit on a larger scale. Use online tools and platforms to keep deadlines and deliverables transparent. This ensures that you can stick to the agreed briefs and prevents clients from bloating the project. Only accept feedback through these platforms so you can focus on doing the job well and getting paid.
2. Inefficient Processes
When managing projects, agencies often fail to spend time developing a streamlined process that will help all parties be comfortable and productive. Outdated or inefficient processes can lead to resource shortages and end up turning a lucrative project into one that barely turns a profit. Agency operators have to put in hours of work to try and keep on top of fulfillment, operations, client and employee management, and reporting.
It can be hard for leaders embedded in the agency environment to see what is wrong with their processes. Aside from utilizing tools, agencies can hire third-party trainers to review and streamline their processes. Agency training helps leaders to improve operating procedures and empowers them to make more astute strategy choices. The result is increased cash flow predictability and better profit margins. This means that the company will finally be in a position to seek growth and scale.
3. Lead Generation
According to a survey of business decision-makers, 58% of leaders are challenged by lead generation. Lead generation is critical to success because referrals and networking are not enough to drive growth. When your business lacks a consistent stream of leads, your profitability will decrease and it will become stuck in a rut. Sadly, many companies are still using outdated sales and marketing efforts to find leads.
Identifying your target audience is the first step to creating leads. Conduct in-depth interviews with your current top clients to get a feel for who they are and what they hope to achieve from working with you. This will help you to home in on the ideal demographic that will provide you with quality leads. Instead of concentrating solely on the bottom of the sales funnel, look into how you can improve the entire outreach process to drive conversions.
4. Not Standing Out
Trying to be everything to everyone not only decreases your ability to generate qualified leads but also stops you from standing out in the crowd. With so many agencies battling for the attention of audiences, it is easy to become part of the noise. When you are just like all the other agencies, there is no point of difference that will justify you being able to charge more for your service and potential clients will not find any reason to choose you.
In order to stand out, you must strengthen your unique brand identity. Refine your core areas of expertise and work on improving them. You can offer a wide range of services but you should leverage your core strengths. Take a distinct position and build a company culture that defines your agency. For instance, you can specialize in non-profit clients or businesses that work with animals. Then, pare down your target audience to find the market segment that will benefit most from your skills.
5. Finding and Retaining Talent
Agencies depend on the quality of their talent to succeed. Great talent means smooth customer relations, clever strategy, experienced planning, compelling copywriting, and appealing design. When your talent is creating winning content, your agency will be able to charge a premium for their time. On the other hand, having subpar talent will lead to low client satisfaction and retention, and leave your company in the slumps.
With so much talent moving to freelance and contract work, it can be difficult for an agency to find and retain talent. Therefore, you should review your hiring practices. Be sure to offer a salary that befits the value that the talent brings to the organization. Consider flexible work arrangements that provide a sought-after work-life balance. Look into creating a team of remote employees and use the appropriate tools and platforms to manage them.
Ultimately, what separates an excellent agency from an average one is its identity and processes. As Sun Tzu said, you have to know yourself to win a battle. To overcome these common challenges, invest time in creating a conducive company culture. Review and revise your processes and free your agency to pursue success.