Last week’s post talked about Revenue Planning, one of the most critical business activities you can do in your agency.
In today’s post, which is our final post in our The Truth About the Agency Business series, I share with you what I believe are Four Core Principles of Agency Greatness.
- Invest in your employees
- Grow your revenues and profits
- Standardize your processes
- Make your clients great
From my experience, successful agencies focus on each principle to build not just a good agency business, but a great one.
At Three Deep, the agency where I’m a partner, we have executed on each of the Principles of Agency Greatness over time with great success. The result?
Our agency is a 5-time Inc. 5000 award-winning agency, and we were inducted into the Inc. 5000 Hall of Fame!
So, let’s talk about how to make YOUR agency great.
Watch the video below or read the expanded video transcription.
Expanded Video Transcription
Let’s talk about how to make your agency great.
Principle of Agency Greatness #1 – Invest In Your Employees
If you want to have a great agency you need to invest in your employees as much as you can. Investing in employees is not a suggestion, but a requirement if you want to build a great agency business.
Employees are your #1 investment (and expense). They are the primary drivers of scaling your agency business, so you need to provide them with intellectually exciting work, career growth opportunities, and a fun social environment.
To retain the best employees, you need to assign them projects that will stretch their knowledge and skills. Don’t just give them busywork to keep them occupied. Give them the opportunity to explore exciting internal projects that could potentially drive revenue and growth.
Sometimes your best ideas come from your employees since they’re on the front-lines of business every day.
Now, how do you make your agency a fun place to work?
You buy one of these!
Joking. You need more than just a kegerator or another gimmick to make your agency great.
At Three Deep, we made it a point to develop a fun and intellectually stimulating social environment. We have a foosball table, pool table, and a ping-pong table. Oh, and yes we have a kegerator with beer on tap too…
But why do we have that stuff?
Because it develops relationships among team members within the agency. It gives everyone an excuse to come together and wind down (except maybe when I beat them in ping pong).
From my experience, young professionals love the idea of working at agencies. That means that the labor market is filling junior level roles with employees from the Millennial Generation. Millennials want a fun, fresh, and intellectually stimulating workplace.
Look at Facebook and Google; they’ve modeled their offices around a university environment. Employees seek the opportunity to work with others who are smart, outgoing, and fun. This environment was purposefully created. To retain the best employees, it’s not just about hiring someone to do work. It’s also about hiring for culture fit.
One thing that makes your agency great is the ability to attract, invest, and retain talented employees. The way this happens is by treating employees well and giving them opportunities to grow within your agency organization. As you grow your revenues, they grow their careers, and everyone is happy.
Principle of Agency Greatness #2 – Grow your revenues and profits.
The second Principle of Agency Greatness is growing revenues and net profit. The more profitable you get, the more good you can do with the money. One example is investing in your employees – the first principle of Agency Greatness.
The best agencies decide to reinvest their profits back into the business, or they give a piece of the profits to their employees. They don’t only treat employees as a resource, but as a contributor to company profits. This level of commitment makes growing agencies one of the most desirable places to work.
One of the most common methods of growing your revenue is by providing incentives for key employees to grow your revenues. This can come from both employees contributing to business development and having dedicated business development teams. Generally speaking, the more you give your team incentive to grow revenue and to reduce expenses, the more they’re going to do it.
The more that happens, the more you have at the end of the day to reinvest into making your agency great and your team well compensated for their efforts.
Here are some ideas on how to reinvest your agency profits:
- Organize opportunities for your team to volunteer, instead of just focusing on having them work every single day.
- Spend your most productive time making improvements to your operational processes.
- Upgrade your employee’s skills by paying for some of their continuing education.
- Upgrade computers, laptops, and other hardware/software to improve employee effectiveness.
The more net profit you have in your business, the more you can reinvest those profits back into your agency. Do this enough times and with enough consistency, and you have built the hallmark of a great agency.
You can win all the accolades in your industry, but having a great business always comes down to the bottom line; how much net profit are you generating?
Principle of Agency Greatness #3 – Standardize your processes
The third Principle of Agency Greatness is standardizing your processes. The key to growing and scaling your agency business is 1) hiring great employees to deliver great work, and 2) standardizing operating procedures (SOPs) to execute efficiently.
When you select your client niche and service niche, 80% of the work you’ll be doing can be streamlined across your clients. That makes having a process in place that everyone on your team can execute is crucial.
If you don’t have a standardized process, you know what happens? Chaos. Because everyone is doing things their own way, and you can’t maintain a high level of quality in delivery. When you can’t perform quality assurance, you will begin to have unhappy clients.
Unhappy clients lead to lost contracts.
Lost contracts lead to bankruptcy.
Instead of delivering things as a one-off or reinventing the wheel each time, think about how you can put a process in place to make sure that you do things consistently and efficiently.
Beyond that, how do you develop project plans and standard operating procedures to make sure that everybody does the work the right way in the future?
Going back to the second Principle of Agency greatness, a healthy net profit, I recommend reinvesting your profits into creating operations and project management roles to build out your SOPs and operations manual. Great agencies have their reliable processes nailed down to a T.
A rock-solid battle-tested process leads to happy clients, which brings me to the final Principle of Agency Success.
Principle of Agency Greatness #4 – Make your clients great
Happy clients are the final Principle of Agency Greatness.
Without happy clients, you don’t have contracts, revenue, profits to reinvest, or money to hire employees.
The agency business starts and ends with getting clients, doing good work, and keeping them happy. You need happy clients to pay the bills, or else you won’t make it very far.
Remember this: The reason why agencies exist is that clients don’t have enough time to get the things they need to be done to achieve the outcome they want.
Clients are buying our time, resources, and expertise to help them accomplish their goals and outcomes. To have and keep happy clients, agencies need to deliver the goods, be honest with clients, and clearly communicate the results clients will get.
Communication is key to a happy client relationship. You need to be explicit with clients and tell them what they’re going to get, and when.
The only reason why agencies exist is happy clients.
The only reason why clients keep on paying us money over and over again? They are satisfied with the results and see a sense of progress toward their goals. Keep your clients on track, and your business will be on track as well.
The agency-client relationship is symbiotic. We let clients know that we value their relationship, to the point where we couldn’t imagine living without them. If your client doesn’t feel that same way without your relationship, you will have a hard time staying profitable over time.
The final thing that makes your agency great is making your clients great. If you can make your clients great, then your agency will do very well.
You’ll have the foundation in place to build a great agency business.
That’s what it takes to make your agency great.
- Invest in your employees. Give them the opportunity to grow their knowledge, skills, abilities at your agency by giving them challenging projects. Foster a sense of teamwork by creating a fun and intellectually stimulating environment. Maybe even buy a kegerator :).
- Grow your revenues and profits and then reinvest those profits into your agency. Do you share profits with your top performing employees? Can you start an educational stipend program to upgrade your employees’ skills? Think about ways to invest your profits into your agency.
- Standardize your core processes. About 80% of the business activities in your agency will be the same, codify it into a Standard Operating Procedure and execute it flawlessly to maintain quality control. It will help you grow and scale faster when your team is on the same page.
- Make Your Clients Great. Clients are the financiers of the agency business without clients there is no agency, no profits, and…no kegerator. Do great work for your clients, and they will be happy with you for decades to come. You’ll have healthy profits and a great agency.
Do you have Principles of Agency Greatness that you would like to share? If so, leave a comment on the blog and share.
This post and video was episode 90 in our 90 Day Challenge digital marketing series.
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