New restaurants have a ridiculously high failure rate, with 60 percent not lasting past the first year and a staggering 80 percent out of business in five years, according to Business Insider – and that’s nothing when compared to the 90 percent failure rate tech startups face! So why do you think your social media shop/marketing agency will fare any better?
The odds are not in your favor. Here’s why and how to increase your chances.
That pie sure smells good
Much like any new venture, marketing agencies suffer from pie in sky thinking and attempt to be everything to everyone seeking assistance with anything “marketing.” Straight out of the gate, they offer social media marketing, content marketing, graphic design, media relations, advertising copy, SEO and side of hash browns thrown in for good measure. And this is a sure way to fail.
Smart agencies, like smart businesses are very niche in their offerings – or at least they start out that way. Why? If you’re a small shop, you can’t possibly be capable of switching gears from one thing to everything, even for a small number of clients.
Developing best practices for your business takes time (even if you’re “borrowing” those of a past employer to use as a foundation for your own) – and if you charge ahead before you have a particular offering systematized, you’ll regret it. And it’s not just your service offerings that need to be mapped out, it’s your business basics too, for example:
Proposals & service agreements
Always offer a proposal in writing – even if it’s just in an email. And then follow up with a service agreement that lays out precisely what will be delivered, when – and how success will look. Define payment terms (requesting payment before work is performed), along with a 30-day cancellation clause that applies both ways. And be sure it’s signed. Oh, the horrors that happen when a simple agreement lacks a signature. Adobe’s Echosign lets you sign and send then for free, so there’s no excuse not to.
And you need to very clearly spell out what success will look like. Leaving things fuzzy leads to misunderstandings, overwork and a bad Yelp/Google+ review (if you’re lucky).
Time tracking, task management & invoicing
This is not a trust thing, it’s a matter of practicality – you need to understand the time it takes staff to complete projects or you can’t appropriately price them out (“them” applying to both the services and the staff!). You need time tracking to accomplish this. And then you need a way to track tasks with your team, so nothing slips through the cracks and to help you identify trends that can result in better management/pricing. And viewing it all as a quick snapshot, preferably with invoicing wrapped up in there too, is essential. Due.com offers a free version to get all of that organized:
Here’s how to use it: If writer No. 1 spends 30 minutes on a particular kind of writing and nails it, whereas writer #2 takes two hours and it’s not so fantastic – but s/he excels in something else, you can help everyone feel better about what they’re doing (and increase your overall profit margin) by reassigning that work.
Also, if you’re billing a client a set rate that doesn’t come close to compensating the time you’re spending on something, you know to re-evaluate that service offering. A visualization of these stats makes both abundantly clear with an immediacy you’ll require to keep pace online.
It’s not just the little guys
And this applies equally to larger agencies as well – more so, in fact because beyond creating solid processes for your businesses and services, you need to onboard staff and see that they’re properly “systematized” too!
For each service offering, you need templates up the wazoo – from how to kick off an engagement, to weekly reporting protocols and a very clear chain of command – to what tasks must be performed specifically at each stage and how and what to document. I guarantee that if you do not spell this out clearly to your staff, you’ll be scrambling at the end of the month to recreate what was done and you’ll not only be a frazzled mess, you’ll realize some key deliverable was missed and have to explain your lack of oversight to the client. (They don’t like that.)
Know what they also don’t like?
Bait and switch
You may have started out strong with a few high ticket clients to justify your “go big or go home” dive into your own business, and brought on more than a few employees to accommodate, but don’t get ahead of yourself and employ a common (and pretty unscrupulous) tactic: the bait and switch.
Agencies completely piss clients off when they win their business and hand them off to less experienced (and less costly) “account managers” or whatever one calls them. It’s fine to have different teammates work with different clients, but pitch them as account leads in your proposal – not after an agreement is made. And be sure they’re up to the task, or don’t do it. Because if you do, your reputation will precede you when you pitch that next client.
But beyond your own reputation to worry about, you need to carefully evaluate prospective clients as well.
There are some clients you don’t want to work with
You need to have a ready template for evaluating clients and you should have an initial phone conversation where you uncover/are on the look-out for the following before you devote any time to writing a proposal (which, if you’re doing them correctly, should take at least a few hours):
- How realistic are their goals? If they’re looking for a viral YouTube video, tell them it’s not happening without a huge and extensively researched campaign – and even then, it’s not guaranteed. If they adjust expectations realistically in response, great. If they don’t, say goodbye.
- Badmouthing previous vendors – and the vendors don’t sound half bad. Trust your gut, or you’ll likely be badmouthed next.
- If their budget is in an entirely different place than yours, you might be tempted to “work with them” just to build a client base. Bad idea. They’ll work you the hardest, have exceedingly high expectations and nothing you do will please them. Trust me.
Bad clients can suck the life out of your business – and quickly. So don’t let them in!
Sum of the parts
When you put it all together effectively, you have a shot at lasting longer than that all you can eat sushi place down the street – but if you miss any be prepared to schlep that laptop back to an office environment and dream a new dream!
Image courtesy of Shutterstock.