Here’s the reality: Most marketing agencies go nowhere. Even fewer achieve scale.

So should you be leveraging growth hacks for your digital agency?

The answer should be: Why wouldn’t you be trying to grow your digital agency?

The number one excuse that holds Donkey agencies back from the wonderful world of Unicorn Agency Land is that they “don’t want to be a big agency.” Some marketing agencies will claim that they are a boutique agency. This typically translates to: “My marketing agency is stuck, and I don’t know how to scale it.”

I gave this presentation at Mention Agency Optimization Day 2020. Watch the replay above and read on to see the hacks I used to scale my first company to a +300 employee PPC and SEO agency with tens of thousands of customers, managing over a billion dollars of ad spend. And get the slides here.

So why grow your digital agency at all?

Three reasons to grow your digital agency:

1. For money. You can make millions. You can speak at all the cool conferences. You can become an internet sensation.
2. For a challenge. Some people do things because, “why not?”
3. For a purpose. Create a valuable service that truly helps people. Participate in job creation that also helps people.

And thus, we present my top 5 growth hacks for your digital agency.

Agency Growth Hack #1: Be a little bit delusional!

Doesn’t the old saying go, “Dream as if you’ll live forever, live as if you’ll die today?”

Sure, the quote might be about living life to the fullest rather than scaling a digital agency, but it can be applied the same way. If you can dream as if you’ll live forever, why can’t you dream as if you’ll develop the greatest digital agency in the world?

In order to grow a digital agency to the top, you need to project a bold vision of that agency. Take a look at my business plan for my first company, before I started Customers.ai, from 2008:

The scale depicted by this plan shows the company’s total revenue increasing over one hundred times the starting amount in just three years. Talk about a lofty goal!

But, it worked.

The reason that having bold, bordering delusional, aspirations for your agency is the first step in scaling it is because of what these bold ideas attract (or rather, who).

A lot of people want to simply go to work, do the bare minimum to achieve their base goals, and go home. An agency with goals that show projection of over 100 times the starting revenue won’t attract these types of people. It’ll attract people that share those visions.

Having lofty goals for scaling your agency will attract the employees, partners, and investors needed to make those goals a reality.

Agency Growth Hack #2: Deploy the customer churn detectors and churn busters!

In order to successfully grow your digital agency, you need to have customers. But not just any customers – you need customers with a long customer lifetime – meaning they stay customers for a while!

The longer the customer lifetime, the more profitable the customer is. If you are churning customers after just a couple months, your agency business is not going to grow.

You want to retain customers for at least a year; better yet, keep them for over a year! The best you can do is to keep a customer for 18 or more months. This means they are likely to stick with you for the long haul, and will be the most profitable.

The average customer lifetime for marketing services is around 13 months.

How can you predict customer churn?

There are several ways that you can predict customer churn, and, using those predictions, you can take action to eliminate the possibility beforehand!

4 Ways to Predict Customer Churn

The biggest predictor of customer churn is the type of client option that your customers choose. Customers that choose the month-to-month client option tend to churn at a rate two times higher than the rest, because it’s the path of least commitment.

So what’s the churn buster in this situation? Eliminate the path of least commitment!

If you eliminate the month-to-month client option, you’ll sell less customers, but the customers you do sell will stay on for longer and be more profitable in the end, thus helping you grow your agency.

The second biggest predictor of churn is the customer’s pre-existing monthly advertising budget. This can also be viewed as the customer’s pre-existing commitment to the marketing channel.

Usually, the higher the monthly advertising budget, the more the customer has bought into whatever form of marketing your agency provides. This makes the customers more committed and thus, better customers. The most committed quartile of customers will churn at half the rate of the bottom quartile.

So what’s the answer here? How do you bust this churn?

Go up market! If you focus on finding bigger customers (much bigger customers), you’ll likely have fewer customers, but the customers you do have will have much bigger budgets and be far more committed to the marketing channel. These will be better customers overall and result in a higher profit for your agency.

The third biggest predictor for customer churn is mis-set customer expectations, or when you can’t live up to sales promises.

The way to defeat this problem is to look at the average customer value based on the sales representative who sold it. This way, you’ll be able to see if one particular sales rep is causing customers to churn; then you can take action accordingly.

Another way to deal with this problem is to disincentivize selling bad clients. For example, if you don’t pay your commission checks until 30-60 days into a client engagement, your sales representatives will be less likely to promise things that can’t be provided in order to gain more customers.

The fourth biggest predictor of customer churn is the 90-day Net Promoter Scores.

Net promoter scores (NPS) come from those surveys that often get sent out with questions like “How likely are you to recommend us to your friends or colleagues?” The answer is usually a number chosen by the customer from 0-10.

As you can see from this chart, a customer is only a promoter if they rank your agency with a 9 or 10. If they rank you with a 7 or 8, they are simply passive. And if they rank you from 0-6, they are actually detractors.

The NPS is calculated by subtracting the percent of detractors from the percent of promoters.

A good NPS is anywhere from 20-30%. If it is any less than that, you’re in trouble.

There are ways to manage and manipulate your score. If your agency has a lot of detractors and a bad NPS, do interventions! This can mean anything from a discount on a product to upgrading a client account to a more senior sales representative.

In addition, if someone says they are likely to refer your agency, ask them for that referral. Referrals can go very far in helping your agency grow. If you have a good customer give you a good referral, you will likely get more good customers.

Some churn-busting tips…

You can benchmark customer churn by using client service representatives.

Customer satisfaction and retention metrics should be reviewed monthly. You can incentivize great service by tying around 15% of a client service representative’s compensation to tangible performance numbers in terms of customer service rankings.

Believe it or not, a client’s happiness and satisfaction with their service representative is slightly more tied to client retention than account performance. To ensure a lot of happy customers, and thus a scaling agency, focus on training your client service representatives!

Another churn-busting tip is to hire more salespeople.

Obviously, the more people working to sell, the more customers are gained. This accelerates your agency’s rate of growth and decreases the customer churn rate. Both of these things result in accelerating the rate of revenue growth for your agency!

Here’s another churn busting tip: up-sell adjacent marketing services to established customers.

If you have established customers, it’s easier to up-sell them additional services than it is to find new business.

This also makes it harder for them to churn, because your agency is taking over so many parts of their business!

And a last churn-busting tip for you: use Facebook Messenger marketing tactics.

Messaging apps have surpassed social networks in terms of monthly active users.

So why not utilize this technology for your marketing?

In fact, Facebook Messenger marketing gets 10-80 times better engagement than email marketing or Facebook Newsfeed ads.

You can even use Messenger in your Facebook Newsfeed ads. Instead of clicking a link that takes them to a website, a potential customer will click a link that takes them to Facebook Messenger. This also captures their contact info. You can send these potential customers into Facebook Messenger chatbots that you host, and bring them to surveys, registrations or reminders, or segmentation and drip campaigns.

Chatbots are very influential in marketing. They also provide a differentiated value to your agency over others. Talk about scaling!

You can use Facebook Messenger marketing to put together an easy pricing proposal, charting a monthly retainer fee for your services. Here’s an example:

Now…let’s get back to growth hacks for your digital agency!

Agency Growth Hack #3: Growth Marketing!

Your agency’s purpose might be to do the marketing for your customers, but you can’t forget to market yourself!

Put time and energy into marketing your own agency to help it grow.

You can do this in a number of ways. Use popular marketing methods to catch attention. This can mean content marketing, or something completely different! Perhaps you can offer some of your services for free for a select number of people. This gets your product out there and shows potential customers what you’re made of!

It’s like sales events at car dealerships – draw attention to your agency!

Agency Growth Hack #4: Recruiting to grow your agency!

A good agency becomes a good agency when it has good people working for it and supporting it. A major growth hack for digital agencies is to focus on how and who you are recruiting.

It is a good idea to determine how you will spend your agency’s money. A good financial ratio splits the money three ways. One third will go to general administrative costs and cost of customer acquisition, including marketing and sales. Another third will go towards the costs of goods sold, meaning the cost of the software, and the hiring of employees. And the final third will be the net profit; money that you can drop to the bottom line to cover taxes, etc.

Here’s three agency scaling hacks that will help you recruit the best candidates for your agency:

Have an internal training department for client service representatives. This will allow you to hire your service reps at a lower cost and train them to do the work.

Have employee non-compete agreements in employment documents and client contracts. This way, you can take action against employees that move to work for competitor agencies.

Have an amazing work culture. Having a beautiful office is a perk in its own right. But making sure people don’t want to leave your agency will mean your employees aren’t only there to do a job; they actually like where they work. This will lead to better performance. In addition, employees who genuinely love where they work will refer more good people to work for you.

And finally, the last marketing agency growth hack…

Agency Growth Hack #5: Cold Emailing!

Now, this doesn’t necessarily mean spamming your customers and potential customers with email after email. It’s more about supplementing traditional inbound marketing with outbound prospecting.

It’s important to note that you should do your outbound prospecting from a different email domain.

So how do you go about cold emailing as a digital marketing agency growth hack?

First, get a list of emails. You can do this by manually searching for emails  using tools like Hunter, if you happen to know the name of a person or company that you want to email. You can also buy lists from tools like ZoomInfo or LinkedIn Sales Navigator. Or, you can use a Scraper like the Phantom Buster Facebook Group Extractor to collect information.

And then…bombs away!

Here’s a couple tips about cold emailing:

Use an email list verfier service. This will ensure that you have minimal deliverability issues and the majority of your emails actually get sent.

Increase email deliverability by sending emails to friends and family. Tell them to open and reply to the emails!

Fly under the radar. Instead of going crazy and sending hundreds of emails a week, go slowly. Send around 10 or so emails a day. This makes engagement rates higher because people are less likely to feel spammed. There is software that will do this for you automatically.

Make emails more engaging. Low intent means low engagement rates (around 3 to 5 times lower, in fact!).

Use intent signals. Obviously you have to find ways to make your emails more engaging, and one easy way is by using intent signals. These include changes in management, a company moving, and similar things. This means you’ll send out fewer, but more targeted, emails that are more likely to be clicked on.

And…

There’s 5 great growth hacks for digital agencies. Let’s recap this journey from Donkey Agency Land to Unicorn Agency Land:

1. PROJECT a bold vision for scaling your company.
2. DEPLOY the churn detectors and churn busters.
3. HACK your growth. Use the latest marketing strategies and outbound marketing.
4. EXPAND. Offer adjacent marketing services and charge more.
5. HIRE great employees. Train people yourself.

And finally…

6. ACCELERATE. Grow your agency as fast as possible to maximize exit valuation.

With those steps, you’ll be in Unicorn Agency Land. Your agency will be scaling faster than you can even keep track of, and you’ll achieve whatever it was that led you to leverage digital agency growth hacks in the first place.

Important Next Steps