A common pattern for agencies:

Agency founder puts out shingle to signal that they're in business.

They get some warm leads from their network – former colleagues, friends, family, alumni, community, etc.

Their early clients come from these connections. Sometimes, these clients are enough to sustain and grow the agency for years.

And as they do work for these clients, they get referrals to other opportunities, yielding more clients.

This cycle can continue indefinitely, leading to steady organic growth.

But in many cases, the agency founder at some point feels that they don't have enough opportunities and revenue growth is too flat.

A common response is: "I think I've tapped my network. I need to invest in marketing. Maybe outbound email campaigns will help drive leads."

They might talk to a number of outbound specialist firms and decide to give one a try.

After 3 months and a mix of too few leads or too many unqualified leads, the agency founder decides to pull the plug. "Outbound doesn't work."

Discouraged, the agency founder goes back to their network and asks a bit more explicitly for referrals.

Just when things are looking bleak, a few opportunities come through, breathing life into the agency again.

Ironically, the new business that's come through lulls the agency founder into thinking that all is good again. No further investments are made into marketing. Nothing changes.

In a few months, the agency founder will be right back to wondering how the firm can land more clients.

Changing the Path

What could the agency founder do differently in such a situation?

A few different questions can help reframe the situation and spark ideas for improvement.

The first place to start is: why does the agency need more clients?

• Is it to drive revenue growth?

• Is it to replace clients that churn?

• Is it to cover high fixed costs?

Secondly: how's the agency servicing existing clients?

• Is it one-off projects or long-term retainers?

• What is the average tenure and lifetime value of a client? Can it be increased?

• What's the overall satisfaction level of existing clients? Is there room for improvement?

• How often is the agency checking in and exploring new opportunities with existing clients?

Third: is it clear how the agency creates value for clients?

• Are the agency's services offering in line with what clients really need?

• Is there more that the agency could be doing for their clients?

• Does the agency know who their target clients are and how they drive impact for these clients?

• Does the agency have concrete case studies and examples to show their impact?

And finally: what gaps in marketing can the agency fill?

• Is the agency's website up-to-date reflecting the latest services offering and case studies?

• Is the agency founder consistently sending outreach emails to their network to stay top of mind?

• Does the agency or agency founder consistently publish their POV or work examples on social?

• Does the agency send a newsletter to a list on a regular basis (e.g. monthly, weekly)?

• Does the agency have lead-sharing partnerships with other firms?

• Does the agency have an annual marketing budget to invest in various activities (e.g. private dinners, conferences, gifting, outbound, sponsorships, etc.) and a way to track impact?

Note: See these three related posts, "This Little Game-Changing Habit", "Revenue Generation Habits" and "Two Types of Agency Partnerships To Explore"

The last set of questions is about building a system that can help drive new opportunities. However, before jumping into marketing, the more important work is about understanding the agency's need for growth and its value proposition.

Sometimes, the agency founder's desire for growth comes as a reaction to seeing an increased cost structure. The team is no longer just a couple of full-time people and a bunch of freelancers. Maybe it's a dozen or two dozen full-time salaried employees with benefits. The payroll has grown quite a bit. In some months, the existing base of clients isn't quite enough to cover all the costs and yield a profit. This creates pressure and a feeling that more opportunities are necessary.

In such situations, the agency founder does have the option to downsize the business. Very few people do this because it's an unsavory option. Nobody wants to be the boss that cuts jobs. It usually only happens when the agency's financial situation makes it untenable to keep the same team.

The few agency founders that do a great job in navigating growth are likely to hone in on two high leverage areas: the agency's value proposition and existing clients.

A clear agency value proposition forms the foundation for articulating what the agency does, who it's targeting, and how the agency is different. It's not something you make up on the spot. It's the culmination of understanding what your target clients need and want and being confident about what you can deliver as a firm. It'll lead you to evaluate whether or not you have the right team in place and how you need to level up the agency's skills and talent.

Taking care of your existing clients, to the degree that there are systems in place to consistently deliver impactful work and a delightful client experience, sets the stage for growing long-term relationships (higher lifetime value) and seeds future warm referrals. It's possible for an agency to discover that they already have all the clients they need – they just need to do a better job of engaging more deeply.

Getting these two right and then layering on a robust marketing system on top is where you want to be.