How to Grow Your Agency
“All models are wrong, but some are useful.” - George Box
George is right, and I think he would chuckle at the fact that every agency grows by word of mouth and referrals. It’s a fact - and one of the most misleading truths in the industry.
The idea that agencies grow off the backs of their current clients and connections is correct but has the unfortunate effect of relieving firms from the responsibilities of lead generation. Everyone relies on word of mouth and referrals but the difference between growth and a plateau is an approach and process to create those opportunities.
What typically happens is that agencies wait for their network (people they know and people those people know - 2nd degree connections) to reach out to them. Then they spend lots of time and money trying to sell to people outside of their network.
The green ring is your available network. The red ring is the volume of people you need to talk to generate enough business to sustain yourself. Your close rate within the green ring is much higher than outside of it. You run into trouble when you’re forced to sell outside of that circle, typically when the sales need has exceeded the size of your network. Both rings are almost always expanding but the rate of expansion can change.
A plateaued firm is selling outside of their network. That means they’re approaching people and companies that have never heard of them, trying to identify a need and talk to these people, then asking them to pay them hundreds of thousands of dollars to try and solve the problem. It’s no surprise that booking a meeting here is so challenging and closing a deal is nearly impossible.
A growing firm is selling inside of their network. They’re talking specifically to people who have a connection to them, a partner, or a client. They still need to identify a need but their ability to get meetings and identify problems is much higher than working outside of the network.
Your network needs to grow faster than your sales efforts.
The main difference between the plateaued firm and the growing firm isn’t their sales tactics. It’s who they’re targeting and how they’re thinking about growing their network. Marketing is typically about expanding your available network. Sales is typically about turning your network into customers. Sustainable growth often happens when your network can grow faster than your sales needs.
How that network grows really depends on the firm, but you need a reliable way to either drop people into your orbit, or reliably identify new people in your orbit. Here are a few examples:
Speaking at, sponsoring, or networking at events and tradeshows
Publishing thought leadership and engaging with the audience online
Targeting ex-employees from client organizations with outbound messages
Partnering with complementary service organizations to co-market or co-sell
Researching client connections on Linkedin and asking to name drop your contact in your outreach
Obviously none of these are revolutionary, and I’m sure you’ve done or thought of them before but the ability to do it consistently and watch your network expand is something else entirely. So is your willingness to smartly connect with these people once they’re in your network.
With the increase in AI-powered outreach and general BS online, I’ve seen this mindset and approach generating even more results in recent months. Two clients with a thoughtful approach to network expansion and an accompanying sales plan booked 19 calls last month with qualified prospects. They won’t all close, but each of those conversations expands the network even more.
This approach is also a decent way to check on your own role as the principal of your firm. I’ve spoken with many founders over the past few years that haven’t felt the same passion and drive for their business since the pandemic. They weren’t doing the little things they used to that made their business grow - attending events, publishing thought leadership, networking calls. Those things stack up and the downstream impact on the bottom line is real. So consider this, if your network isn’t expanding like it once was, it may be time to think about handing the reins of your business off to someone else
One last, really important thing - you need to define who you want in your network. If your network of marketing people is growing but you sell to IT, none of this works. And to make you more uncomfortable, if your network of marketing people is growing but you really only sell to automotive marketers, that may not be effective either.
If your network is growing but your sales aren’t following, it may be a positioning problem. In addition to all the marketing and sales work, we can help dial in that positioning and make sure it’s backed by messaging that helps you turn the corner.
