Breaking The Feast Or Famine Cycle: Strategies For Sustainable Growth In Your Marketing Agency

Welcome to the Agency Accelerator, the podcast for small to mid sized marketing agencies, helping them grow in a profitable, sustainable and enjoyable way. In this week's episode we're discussing the all too common challenge that so many agencies face, that of being stuck and lurching from feast to famine in the Feast to Famine cycle. Now, when you are in a place of famine, it becomes super stressful and it's not a great place to be. So in today's episode I want to share with you five strategies to help you avoid it. But first I want to explain exactly what I mean by feast or famine. So let's get started. I'm Rob Da Costa and this is the Agency Accelerator Podcast. As someone who has stood in your shoes, having started, grown and sold my own agency, I know just how it feels in the ups and downs of agency life. So this podcast aims to ease your journey just a little by sharing mine and my guests experiences and advice as you navigate your way to growing a profitable, sustainable and enjoyable business. Have you ever been in that situation where you have got so busy with lots of great client work that you've got no time to breathe, let alone think about marketing and business development and planning for the future of your agency? You'll often find yourself stuck on the client service hamster wheel of doom. Now in the short term, this feels really good because you've got cash coming into the company, you're feeling confident about investing in hiring people and putting new systems and processes in place. But. But ultimately in the end, some of those projects will come to an end, either because that's a natural conclusion for the project, or often through no fault of your own, that the client changes strategy or runs out of money so they terminate the contract with you. And now you've made investments in your agency and you've been super focused on client delivery that you're suddenly staring at a gap in your order book and you lurch from a place of feast to to a place of famine. And when we get into a place of famine, as I said in the instruction, it can be super stressful. You've got cash flow issues, you've got team members that you need to pay, which means you're at the back of the queue, morale in your team can go down and you end up making bad decisions. Now, I see two bad decisions typically being made. One is that you discount work to win new clients because at the end of the day you've got these gaps that you need to fill, so you discount work to win them, but that in itself generates stress in the agency because now you're doing work that you're being underpaid for, so you have the potential of becoming a busy fool. And of course you're half thinking, well, I wish I had the clients that were paying me at the right fee instead of this client I'm having to discount. You sort of resent it in the end. That's the first issue. And the second issue is that you often take on the wrong kind of client, the less than ideal client, because again, you just need business. So you get an opportunity, you take it on without going through the same qualification process. And we all know that when we take on a less than ideal target client, they become problem children, if you like. They're harder to service because you don't quite understand them and they don't quite understand you. It's hard to meet their goals because they might be unrealistic, which might be why they're the less than ideal target client. And again, this leads to stress and resentment in the agency. So being in a place of famine is not a great place to be. Now, this whole scenario can often be exacerbated because you have an over reliance on just a few clients. It's that old 8020 rule that 20% of your clients give you 80% of your revenue. And of course if you lose that client, you can be in serious trouble. And of course it immediately lurches you into a place of famine. When I ran my agency, we had two big clients that were both paying us around about £10,000amonth. Bear in mind, this is back in the 90s and we lost both of them within the course of about three months because they both got acquired, one by IBM and one by Adobe. And, and of course we were just a little old agency and they had their preferred agency and therefore we had no chance. So as I said in the introduction, often you lose clients through no fault of your own, such as in our situation. But those two clients probably accounted for about 40% of our revenue. So we were immediately stuck in this place of famine with the staff of 25 people, you know, 25 mouths to feed. And I can tell you that felt really stressful. So that's one of the common causes that you rely on just a few clients and. And another one, as I said earlier, is because you're stuck on the client service hamster wheel of doom. So you have no time to implement your sales and marketing strategies, you have no time to focus on the future. And that probably means that you have a lack of consistent lead generation coming in. And of course these strategies are all mid to long term deliverables. So if you're in a place of famine, you can't just switch it on and suddenly get a load of new leads. You have to have been investing in that over the medium term to get those results. Now, when I started my coaching business, this happened to me twice. I went through this feast and famine cycle twice where I ended up in a place of famine. And trust me, it was painful, especially right back in the beginning when I wasn't making that much money to start with. And of course it sows doubts in your head, can I do this? Should I go and get a job? And in the end I just had a good chat with myself and said, rob, why are you letting this happen? You know what you need to do. And I set about making sure that it never happened again, which is why I want to share with you in my five strategies. So trust me, this has happened to me and two times was two times too many. So I really want to help ensure that it never happens to you. And if it has happened to you, I want to ensure that it never happens to you again. So let's jump into strategy number one, and this is an overarching strategy for your whole business, which is making sure that you have a really strong foundation so you have all of the systems and processes and the pieces in place to ensure that you don't jump into feast or famine. And I think, I think it all starts by having a clear plan and also having a clear niche for your agency. Because when you have a clear niche, you can identify who your ideal target customer is. And when you understand them, you understand the pains and challenges that they have. You also know where they hang out, so you can build marketing and sales campaigns around those ideal target customers. Now, when you've got a clear value proposition, you want to make sure you're articulating it across all of your value various platforms, including your website, your LinkedIn profile, other social media and anywhere else where your ideal target customer might find you. You'd be amazed at the number of people who tell me they have a clear niche and the clear value proposition. They show up more as a generalist than the niched business that they believe they are. Now, I'm not going to jump into too much detail on this episode because I've spoken about niching before and I will put links to relevant episodes and also a free guide on niching and. But that's part of having a strong foundation, as is having a plan for your business. And again, I've spoken about that before. So you want to make sure that you can clearly articulate who you are and who you serve and why they should pick you. And you also want to have a clear plan that shows you when you will make investments in your agency, such as when you will hire additional staff and when you'll make other investments, such as in sales and marketing and systems and processes. Okay, so that's strategy number one, which is really building a solid foundation, understanding who you are, communicating that clearly to your target market, and having a clear plan that shows when you're going to make various investments. The second thing is sort of around mitigating your risk by building a diverse client portfolio. As I shared when I ran my agency, we over relied on two big clients and then we lost them in quick succession. So you want to make sure that you have a range of clients and that you are not just relying on one or two clients to generate 80% of your revenue. So make sure that you are. So make sure you're super clear about your ideal target customer and that will include the size and the kind of thing they buy from you. And then work really hard to have multiple clients that fit in that box so that you are winning multiple projects rather than one or two very large ones. Now strategy three and strategy four kind of go hand in hand. So strategy three is to develop an effective sales and marketing strategy and plan and make sure by hook or by crook that you implement it. So you want to understand. So because you understand. So because you have a clear niche and therefore you define exactly who your ideal target customer is, you'll be able to create really compelling content that hits home and resonates with your audience. You want them to be thinking, blimey, he's reading my mind or she's reading my mind. With your marketing. So that's something to think about in terms of planning. But then you want to think about your sales funnel. So at the top of the funnel you've got new cold leads. These are people that are just discovering your business and they fit your ideal target customer profile and how you are going to nurture them through the sales funnel so they drop out the bottom as customers. So think about the various lead generation strategies, what content marketing you need to put in place, social media, SEO and of course email marketing. And if you're going to do any paid work, it might be ppc. And whatever you do, my advice is always to pick a few things and do them well. And remember to meet your audience where they are. So what are the things that are going to work really well with them with the one non negotiable being? Build your email list. Because you then need to use your email list to nurture your audience. Remember, they're ready to buy from you when they're in enough pain and they're clear that you can solve that pain for them. So unfortunately, clients are never ready to buy when we want them to buy. They're ready to buy when they're in enough pain. And you're right front and center saying, hey, I can help you. And that's why we need to be consistently marketing. So that is super important if you want to make sure that you are never lurching into famine. And it ties into strategy number four, which is protecting your time. So no matter how busy you get servicing clients, you need to protect some of your time to focus on strategy three, which is implementing your sales and marketing strategy. The way I look at it is I often say to clients, do you work 10 o' clock at night or do you work at weekends? And hopefully the answer is no. So they've already got examples of how they protect their time. Now you need to apply exactly that same thinking to protecting some of your time in your working week to focus on the future of your agency, that is sales and marketing. So rather than thinking that I've got five days from 9 to 5:30 available to my team or to my clients, you now need to think, well, actually I've only got four days available because I'm using a day of my time or half day of my time or whatever it is to focus on sales and marketing, which my future self is going to be really thankful of because it's going to help us avoid lurching from feast to famine. And even when we're in a place of feast, we are still focused on sales and marketing. We're still focused on the future. And as I often say to myself, your future self will thank you because you won't be in that awful place of famine where you're having to make those bad decisions. So make sure you're protecting your time and changing your mindset around how much time is available and also changing your mindset around what is important. Of course clients and team come high up the agenda or the priority list, but so does working on the future of your agency. So that is number three, which is develop an effective sales and marketing strategy. And number four, which is protect your time no matter how busy you get in client service mode. And the final thing I want to say is strategy number five, which is focus on client retention and growth. Because you might have a great sales and marketing strategy, which is generating leads and they're turning into clients, but you also don't want to have a revolving door of those clients going in one door and then exiting out the exit after six months. So you want to really focus on building really strong client partnership relationships and also looking at how you can grow those existing clients to get additional revenue, which will again protect you from feast or famine, rather than just totally focused on sales and marketing. So we kind of got these three strains here. We've got client service, so doing a great job for your current clients, making sure that they really know, like and trust you and that you provide a great level of service commensurate with the fee that they're paying. But you also want to focus on the future of those clients. So how do I retain and grow them and get additional revenue? And you also want to focus on bringing new clients into your world as well. So we've, you know, running an agency, we have to be great jugglers, which I've spoken about many times before. And that juggling skill definitely comes in place when we're talking about avoiding feast or famine. So those are the five strategies that I wanted to share in this episode. So number one is all about building a really strong foundation, having really good clarity on who you are, who you serve, and then having a vision that shows when you're going to make various decisions. Strategy two is mitigating risk by putting all your eggs in one basket, by building a diverse client portfolio so that you are not falling foul of having 20% of your clients delivering 80% of the revenue, which will definitely lurch you into feast or famine. Strategy three was all about building an effective sales and marketing plan so that you are constantly bringing new leads into your world and nurturing them until they become customers. And in order to do that, we have to implement strategy four, which is protecting some of your time, no matter how busy you get with client delivery. And then number five is focus on retaining those clients and getting additional revenue from them so that we are protecting them and we're not having a revolving door. So I hope that helps. That's just five quick snapshots of how you can break the feast or famine cycle and instead create sustainable growth in your agency. Now, I want to do a plug here for my agency accelerator moderator live workshops, which run on a Wednesday morning every two weeks at 9 o' clock in the morning, because the next session we have is digging into avoiding feast or famine in a lot more detail than I have given you in this podcast episode. So I'll put a link in the show notes to register. It's free to attend. They're all value, no sales sessions and I want to provide value. And in the series of workshops we're tackling the 13 big challenges that I see most agencies having. And avoiding feast or famine is one of those 13 challenges. So I really hope you can join us for the 45 minute session, which is about 25 minutes of me providing training and value and then 20 minutes of Q and A. And as I say, they happen every two weeks and the next one is happening next week. If you're listening to this when it's just been released and we are focusing on avoiding feast or famine, so hope you found that useful, please do share it with your colleagues. Please do make sure you've hit the subscribe button and please, please, please consider leaving a review on Apple Podcasts. I've even put a link with a little video on how to do that because that helps the algorithm. Share this episode to more people just like you. Which as you know, means I can help more people just like you. But other than that, hope you have a great week. If you're in a place of famine, do reach out to me and let's have a chat. But hopefully you can implement the strategies that I've outlined and that will help you take steps to avoiding that. But other than that, have a great week, rest of your week and I will see you next Thursday for the next episode of the Agency Accelerator podcast.